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Test your basic knowledge |
Managerial Accounting And Cost Concepts
Start Test
Study First
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. A cost which varies - in total - in direct proportion to changes in level of activity.
Dependent Variable
Activity Base
Cost behavior is considered linear when...
Variable Cost
2. A cost that is incurred to support a number of cost objects - but cannot be traced to them individually.
Period Costs
Prime Cost
Raw Materials
Common Cost
3. All the costs that are not product costs.
Direct Cost
Quality of Conformance
Period Costs
Fixed Cost
4. All costs involved in acquiring or making a product.
Direct Materials
Indirect Cost
Product Costs
Committed Fixed Costs
5. (Also known as the 'X' variable); Refers to activity because it causes variations in the cost.
Independent Variable
Discretionary Fixed Costs
Cost Behavior
Common Cost
6. Small groups of employees that meet on a regular basis to discuss ways of improving quality.
Product Costs
Opportunity Cost
Quality Circles
Common Cost
7. (Also known as the 'Y' variable); The amount of cost incurred during a period depends on the level of activity for the period.
Contribution Margin
Dependent Variable
High-Low Method Formula
Contribution Approach
8. An approach to cost analysis that involves a detailed analysis of what cost behavior should be - based on an industrial engineer's evaluation of the production methods to be used - the materials specifications - labor requirements - equipment usage -
External Failure Costs
Opportunity Cost
Cost of Goods Sold Equation
Engineering Approach
9. (Y2-Y1)/(X2-X1)
Indirect Cost
High-Low Method Formula
Indirect Labor
Inventoriable Costs
10. Whenever a straight line is a reasonable approximation for the relation between cost and activity.
Direct Materials
Independent Variable
ISO 9000 Standards
Cost behavior is considered linear when...
11. The range of activity within which the assumption that cost behavior is strictly linear is reasonably valid.
Appraisal Costs
Relevant Range
Inventoriable Costs
Quality Circles
12. Contains both variable and fixed cost elements. (Also known as semi-variable costs)
Mixed Cost
Independent Variable
Direct Materials
Sunk Cost
13. Anything for which cost data are desired-including products - customers - jobs - and organizational sub-units.
Prevention Costs
Cost Object
Raw Materials
Indirect Materials
14. The materials that go into the final product.
Administrative Costs
Quality of Conformance
Raw Materials
Variable Cost
15. Represent organizational investments with a multiyear planning horizon that can't be significantly reduced even for short period of time without making fundamental changes.
Selling Costs
Committed Fixed Costs
Contribution Margin
Manufacturing Overhead
16. A cost that remains constant - in total - regardless of changes in the level of activity.
Opportunity Cost
Product Costs
Fixed Cost
Quality Cost Report
17. The sum of direct labor cost and manufacturing overhead cost. (Refers to converting the materials into the finished product.)
Conversion Cost
Activity Base
Incremental Cost
Differential Revenue
18. The potential benefit that is given up when one alternative is selected over another.
Cost Behavior
Opportunity Cost
Direct Cost
Differential Revenue
19. A measure of whatever causes the incurrence of a variable cost.
Activity Base
Prevention Costs
Variable Cost =
Independent Variable
20. A method that uses all of the date to separate a mixed cost into its fixed and variable cost components.
Independent Variable
High-Low Method Formula
Opportunity Cost
Least-Squares Regression Method
21. A cost that can be easily and conveniently traced to a specified cost object.
Fixed Cost
Direct Cost
Discretionary Fixed Costs
Indirect Labor
22. Quality control requirements issued by the International Organization for Standardization that relate to products sold in European Countries.
Administrative Costs
ISO 9000 Standards
Internal Failure Costs
Cost of Goods Sold Equation
23. Consists of labor costs that can be easily (i.e. physically and conveniently) traced to individual units of product.
Indirect Labor
Direct Materials
Prevention Costs
Direct Labor
24. Costs that are incurred as a result of identifying defective products before they are shipped to the customers.
Internal Failure Costs
Direct Cost
2 Categories of Non-manufacturing Costs
High-Low Method
25. Include all costs associated with the general management of an organization rather than with manufacturing or selling.
Dependent Variable
Direct Labor
Indirect Cost
Administrative Costs
26. Include all costs that are incurred to secure customer orders and get the finished product to the customer.
Variable Cost
Product Costs
Direct Labor
Selling Costs
27. A charting technique used to monitor the quality of work being done in a workstation for the purpose of immediately correcting any problems.
Variable Cost =
Statistical Process Control
Common Cost
Administrative Costs
28. A difference in costs between any two alternatives.
Differential Cost
Cost Structure
Relevant Range
Conversion Cost
29. An account is classified as either variable of fixed based on the analyst's prior knowledge of how the cost in the account behaves.
Product Costs
Cost Structure
Account Analysis
ISO 9000 Standards
30. Change in cost/ change in activity.
Direct Materials
Manufacturing Overhead
Variable Cost =
Relevant Range
31. A cost that has already been incurred and that cannot be changed by any decision made now or in the future.
Sunk Cost
2 Categories of Non-manufacturing Costs
Statistical Process Control
Inventoriable Costs
32. Costs that usually arise from annual decisions by management to spend on certain fixed cost items. (Also known as 'managed fixed costs').
Fixed Cost
Cost of Goods Sold Equation
Cost Behavior
Discretionary Fixed Costs
33. Materials that are included as part of manufacturing overhead.
Least-Squares Regression Method
Quality Cost
Indirect Materials
Cost of Goods Sold Equation
34. Labor costs that cannot be physically traced to particular products or that can be traced only at great cost and inconvenience.
Raw Materials
Cost Behavior
Sunk Cost
Indirect Labor
35. Provides managers with an income statement that clearly distinguishes between fixed and variable costs and therefore aids in planning - controlling - and decision making.
Indirect Materials
Contribution Approach
Selling Costs
Least-Squares Regression Method
36. The sum of direct materials cost and direct labor cost -
Fixed Cost
High-Low Method
Prime Cost
Cost of Goods Sold Equation
37. Costs that are incurred to identify defective products before the products are shipped to customers.
High-Low Method Formula
Selling Costs
Administrative Costs
Appraisal Costs
38. A difference in revenues between any two alternatives.
2 Categories of Non-manufacturing Costs
Dependent Variable
Engineering Approach
Differential Revenue
39. Cost that are incurred when a product or service that is defective is delivered to a customer.
Indirect Materials
Direct Cost
External Failure Costs
Direct Materials
40. The third element of manufacturing cost - includes all manufacturing costs except direct materials and direct labor.
Common Cost
Indirect Materials
Cost Structure
Manufacturing Overhead
41. (1.)Selling costs (2.)Administrative costs
Sunk Cost
2 Categories of Non-manufacturing Costs
Differential Revenue
External Failure Costs
42. Method based on the rise-over-run formula for the slope of a straight line.
Raw Materials
Inventoriable Costs
High-Low Method
Cost Object
43. Refers to how a cost reacts to changes in the level of activity.
Cost Behavior
Quality of Conformance
Period Costs
Committed Fixed Costs
44. 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.
Quality of Conformance
Indirect Labor
Indirect Materials
Indirect Cost
45. 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.
High-Low Method Formula
Sunk Cost
Differential Cost
Quality Cost
46. 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.)
Administrative Costs
Differential Revenue
Manufacturing Overhead
Contribution Margin
47. Beginning merchandise inventory + Purchase - Ending merchandise inventory
Cost of Goods Sold Equation
Common Cost
Fixed Cost
Product Costs
48. A report that details prevention costs - appraisal costs - and the costs of internal and external failures.
Indirect Materials
Quality Cost Report
Cost of Goods Sold Equation
Prevention Costs
49. Product costs that were initially assigned to inventories.
Inventoriable Costs
Cost Structure
Dependent Variable
Internal Failure Costs
50. The relative proportion of each type of cost in an organization.
Internal Failure Costs
Indirect Cost
Raw Materials
Cost Structure