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Exam 10: An Introduction to Management Accounting

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Question 51

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The benefits of a just-in-time system would include all of the following except:

A) increased warehousing costs.
B) reduced inventory holding costs.
C) improved customer satisfaction.
D) decrease in the number of suppliers.

E) B) and D)
F) B) and C)

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Question 52

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As a Certified Management Accountant, Derek is bound by the standards of ethical conduct issued by the Institute of Management Accountants. According to the standards, Derek has a responsibility to:

A) inform subordinates that they should protect confidential information.
B) ensure that financial accounting records are maintained as per the governing guidelines.
C) monitor the activities of subordinates to assure that confidentiality is maintained.
D) inform subordinates that they should protect confidential information and monitor the activities of subordinates to assure that confidentiality is maintained.

E) A) and C)
F) B) and D)

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Question 53

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Managerial accounting information is limited or restricted by which of the following authorities or principles?

For a manufacturing company, both direct labor costs and indirect labor costs are classified as product costs.

A systematic problem-solving philosophy that encourages front line workers to achieve zero defects is known as:

Unlike manufacturers, service companies do not have an inventory of products.

Average costs are used for internal decision-making, but actual costs are required for calculating cost of goods sold.

Transportation costs incurred to transfer products to customers are downstream costs.

Which of the following transactions would cause net income for the period to decrease?

Randall Company manufactures chocolate bars. The following were among Randall's manufacturing costs during the current year: Randall's direct materials amounted to:

Kirsten believes her company's overhead costs are driven (affected) by the number of direct labor hours because the production process is very labor intensive. During the period, the company produced 5,000 units of Product A requiring a total of 1,600 labor hours and 2,500 units of Product B requiring a total of 400 labor hours. What allocation rate should be used if the company incurs overhead costs of $20,000?

What is the effect on the balance sheet of making cash sales of inventory to customers on profit?

The objective of a just-in-time inventory system is to totally eliminate all inventories.

Product costs flow from the balance sheet to the income statement.

Which of the following items would be reported directly on the income statement as a period cost?

As a Certified Management Accountant, Grace is bound by the standards of ethical conduct issued by the Institute of Management Accountants. If she accepts an expensive gift from a vendor trying to win a contract with her firm, which of the following standards will she violate?

Depreciation on manufacturing equipment is an indirect product cost, while depreciation on office equipment is a period cost.

Senior executives focus on financial data when comparing the performance of their companies to that of competitors.

Just in time systems can be used by both manufacturing and merchandising companies.

Which of the following is not one of the four Standards of Ethical Conduct for Management Accountants?