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1. Which feature of managerial accounting improves a company's ability to plan and control operations?
A. It provides earnings per share data
B. It allows comparability across business
C. It requires strict adherence to GAAP
D. It generates detailed information on product cost - ANSWER D. It generates detailed information on product cost
2. Which statement describes period costs?
A. They flow directly to the current income statement as expenses
B. They include direct materials, direct labor, and manufacturing overhead costs.
C. They flow directly to the balance sheet as expenses.
D. They pertain to costs necessary to manufacture the product - ANSWER A. They flow directly to the current income statement as expenses
3. A company has the following costs associated with a job:
Direct materials: $400
Direct Labor: $450
Work in process: $950
Revenue from job: $1,450
What is the amount of overhead applied to this job?
A. $600
B. $100
C. $1000
D. $500 - ANSWER B. $100 (400+450=850 950-850=100)
4. Management wants to assess how many units must be sold to earn a profit. The most useful analysis will separate costs into which categories?
A. Fixed and variable
B. Product and period
C. Controllable and not controllable
D. Direct and indirect - ANSWER A. Fixed and variable
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