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Copyright © 2015 Nelson Education Limited. 2-1
Chapter 2 - Basic Managerial Accounting Concepts
- What are expired costs?
- assets
- expenses
- revenues
- profit
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
REFERENCES: p. 32
LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1
NATIONAL STANDARDS: United States - AACSB Analytic
United States - IMA-Business Economies
KEYWORDS: Bloom's Higher order; classifying
- In terms of managerial accounting, which of the following is the best definition of cost?
- the cash sacrificed for goods expected to bring future benefit to the organization
- a dollar measure of the cash used to achieve a given benefit
- the asset incurred to produce future benefits
- the equivalent of the cost of goods sold
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
REFERENCES: p. 32
LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1
NATIONAL STANDARDS: United States - AACSB Analytic
United States - IMA-Business Economics
KEYWORDS: Bloom's Higher order; differentiating
- Which of the following is a characteristic of price per unit?
- It is equal to the revenue.
- It must be less than cost for the firm to earn income.
- It is the same as total cost.
- It is the same as cost per unit plus income per unit.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
REFERENCES: p. 32
LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1
NATIONAL STANDARDS: United States - AACSB Analytic
United States - IMA-Business Economics
KEYWORDS: Bloom's Higher order; inferring
- What is the definition of assigning costs?
Cornerstones of Managerial Accounting Canadian 2nd Edition Mowen Test Bank Visit TestBankDeal.com to get complete for all chapters
Chapter 2 - Basic Managerial Accounting Concepts
Copyright © 2015 Nelson Education Limited. 2-2
- the way costs are measured and recorded
- the way companies can tell what money was spent
- the allocation applied to a cost object using a reasonable method
- the benefit given up when one choice is made over another
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
REFERENCES: p. 33
LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1
NATIONAL STANDARDS: United States - AACSB Analytic
United States - IMA-Business Economics
KEYWORDS: Bloom's Higher order; classifying
- Which of the following is included in nonmanufacturing costs?
- marketing
- direct materials
- indirect materials
- overhead
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
REFERENCES: p. 33
LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1
NATIONAL STANDARDS: United States - AACSB Analytic
United States - IMA-Business Economics
KEYWORDS: Bloom's Higher order; exemplifying
- What is one of the main purposes of assigning costs to cost objects?
- It provides information on why money was spent.
- It records the historical events of the organization.
- It allows management to incorporate products in marketing.
- It facilitates service businesses in following financial regulations.
ANSWER: a
POINTS: 1
DIFFICULTY: Medium
REFERENCES: p. 33
LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1
NATIONAL STANDARDS: United States - AACSB Analytic
United States - IMA-Business Economics
KEYWORDS: Bloom's Higher order; classifying
- Which of the following is characteristic of indirect costs?
- Indirect costs can be easily and accurately traced to a cost object.
Chapter 2 - Basic Managerial Accounting Concepts
Copyright © 2015 Nelson Education Limited. 2-3
- Indirect costs are shared between or among more than one cost object.
- Indirect costs should always be assigned to a cost object.
- Indirect costs include all labour.
ANSWER: b
POINTS: 1
DIFFICULTY: Medium
REFERENCES: p. 35
LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1
NATIONAL STANDARDS: United States - AACSB Analytic
United States - IMA-Business Economics
KEYWORDS: Bloom's Higher order; classifying
- What is the behaviour pattern of a variable cost?
- It increases in total as output increases.
- It remains constant in total at all levels of output.
- It increases per unit as output increases.
- It decreases per unit as output increases.
ANSWER: a
POINTS: 1
DIFFICULTY: Medium
REFERENCES: p. 36
LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1
NATIONAL STANDARDS: United States - AACSB Analytic
United States - IMA-Business Economics
KEYWORDS: Bloom's Higher order; exemplifying
- What is the definition of opportunity cost?
- a cost that increases as output increases and decreases as output decreases
- a cost that does not increase as output increases and does not decrease as output decreases
- a benefit given up or sacrificed when one alternative is chosen over another
- a benefit that cannot be easily and accurately traced to a cost object
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
REFERENCES: p.33
LEARNING OBJECTIVES: MACC.MOWE.15.2.1 - 2.1
NATIONAL STANDARDS: United States - AACSB Analytic
United States - IMA-Business Economics
KEYWORDS: Bloom's Higher order; exemplifying
- Which of the following is an example of an intangible product?
- hamburgers
- computers
Chapter 2 - Basic Managerial Accounting Concepts
Copyright © 2015 Nelson Education Limited. 2-4
- automobiles
- dental care
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
REFERENCES: p. 37
LEARNING OBJECTIVES: MACC.MOWE.15.2.2 - 2.2
NATIONAL STANDARDS: United States - AACSB Analytic
United States - IMA-Business Economics
KEYWORDS: Bloom's Higher order; exemplifying
- Which of the following is an example of a tangible product?
- funeral care
- legal services
- furniture
- video rental
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
REFERENCES: p. 37
LEARNING OBJECTIVES: MACC.MOWE.15.2.2 - 2.2
NATIONAL STANDARDS: United States - AACSB Analytic
United States - IMA-Business Economics
KEYWORDS: Bloom's Higher order; exemplifying
- What type of organization is the Hudson Bay Company?
- production organization
- service organization
- manufacturing organization
- merchandising organization
ANSWER: d
POINTS: 1
DIFFICULTY: Medium
REFERENCES: p.37
LEARNING OBJECTIVES: MACC.MOWE.15.2.2 - 2.2
NATIONAL STANDARDS: United States - AACSB Analytic
United States - IMA-Reporting
KEYWORDS: Bloom's Higher order; differentiating
- Which of the following statements best describes product costs?
- Product costs are direct materials and direct labour costs only.
- Product costs are manufacturing costs.
- Product costs do not include overhead.
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