Test your basic knowledge |

Managerial Accounting And Cost Concepts

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. An account is classified as either variable of fixed based on the analyst's prior knowledge of how the cost in the account behaves.






2. Contains both variable and fixed cost elements. (Also known as semi-variable costs)






3. A method that uses all of the date to separate a mixed cost into its fixed and variable cost components.






4. A cost that can be easily and conveniently traced to a specified cost object.






5. The degree to which a product or service meets or exceeds its design specifications and is free of defects or other problems that mar its appearance or degrade its performance.






6. The potential benefit that is given up when one alternative is selected over another.






7. Anything for which cost data are desired-including products - customers - jobs - and organizational sub-units.






8. The materials that go into the final product.






9. Costs that are incurred to prevent defective products from falling into the hands of customers or that are incurred as a result of defective units.






10. The third element of manufacturing cost - includes all manufacturing costs except direct materials and direct labor.






11. Cost that are incurred to keep defects from occurring.






12. A difference in revenues between any two alternatives.






13. Product costs that were initially assigned to inventories.






14. (Also known as the 'X' variable); Refers to activity because it causes variations in the cost.






15. A charting technique used to monitor the quality of work being done in a workstation for the purpose of immediately correcting any problems.






16. All the costs that are not product costs.






17. (Y2-Y1)/(X2-X1)






18. Materials that are included as part of manufacturing overhead.






19. Cost that are incurred when a product or service that is defective is delivered to a customer.






20. A cost that remains constant - in total - regardless of changes in the level of activity.






21. Refers to how a cost reacts to changes in the level of activity.






22. Small groups of employees that meet on a regular basis to discuss ways of improving quality.






23. Refers to an increase in cost from one alternative to another.






24. Costs that are incurred as a result of identifying defective products before they are shipped to the customers.






25. A cost that cannot be easily and conveniently traced to a specified cost object.






26. A cost that has already been incurred and that cannot be changed by any decision made now or in the future.






27. Labor costs that cannot be physically traced to particular products or that can be traced only at great cost and inconvenience.






28. (1.)Selling costs (2.)Administrative costs






29. Whenever a straight line is a reasonable approximation for the relation between cost and activity.






30. The relative proportion of each type of cost in an organization.






31. A cost that is incurred to support a number of cost objects - but cannot be traced to them individually.






32. Method based on the rise-over-run formula for the slope of a straight line.






33. A difference in costs between any two alternatives.






34. Represent organizational investments with a multiyear planning horizon that can't be significantly reduced even for short period of time without making fundamental changes.






35. The sum of direct materials cost and direct labor cost -






36. The amount remaining from sales revenues after variable expenses have been deducted. (This amount contributes toward covering fixed expenses and then towards profits for the period.)






37. (Also known as the 'Y' variable); The amount of cost incurred during a period depends on the level of activity for the period.






38. A cost which varies - in total - in direct proportion to changes in level of activity.






39. A measure of whatever causes the incurrence of a variable cost.






40. Consists of labor costs that can be easily (i.e. physically and conveniently) traced to individual units of product.






41. Beginning merchandise inventory + Purchase - Ending merchandise inventory






42. Costs that are incurred to identify defective products before the products are shipped to customers.






43. A report that details prevention costs - appraisal costs - and the costs of internal and external failures.






44. The range of activity within which the assumption that cost behavior is strictly linear is reasonably valid.






45. Change in cost/ change in activity.






46. Quality control requirements issued by the International Organization for Standardization that relate to products sold in European Countries.






47. Include all costs that are incurred to secure customer orders and get the finished product to the customer.






48. Costs that usually arise from annual decisions by management to spend on certain fixed cost items. (Also known as 'managed fixed costs').






49. Materials that become an integral part of the finished product and whose costs can be conveniently traced to the finished product.






50. Include all costs associated with the general management of an organization rather than with manufacturing or selling.