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Answer The Following Questions: Question One:: Managerial Accounting

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Mohammed Qatari

This document contains a series of questions related to managerial accounting concepts. It tests understanding of: [1] classification of costs as product vs. period costs; [2] components of prime and conversion costs; [3] calculation of total manufacturing costs; [4] identification of differential, sunk and opportunity costs; [5] identification of true/false statements regarding managerial accounting concepts like fixed vs. variable costs; and [6] calculation of variable cost per unit, total fixed costs, total variable costs, and total costs using the high-low method on tables of activity levels and indirect manufacturing elements.

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Answer The Following Questions: Question One:: Managerial Accounting

Uploaded by

Mohammed Qatari
40 views3 pages
This document contains a series of questions related to managerial accounting concepts. It tests understanding of: [1] classification of costs as product vs. period costs; [2] components of prime and conversion costs; [3] calculation of total manufacturing costs; [4] identification of differential, sunk and opportunity costs; [5] identification of true/false statements regarding managerial accounting concepts like fixed vs. variable costs; and [6] calculation of variable cost per unit, total fixed costs, total variable costs, and total costs using the high-low method on tables of activity levels and indirect manufacturing elements.

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This document contains a series of questions related to managerial accounting concepts. It tests understanding of: [1] classification of costs as product vs. period costs; [2] components of prime and conversion costs; [3] calculation of total manufacturing costs; [4] identification of differential, sunk and opportunity costs; [5] identification of true/false statements regarding managerial accounting concepts like fixed vs. variable costs; and [6] calculation of variable cost per unit, total fixed costs, total variable costs, and total costs using the high-low method on tables of activity levels and indirect manufacturing elements.

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40 views3 pages

Answer The Following Questions: Question One:: Managerial Accounting

Uploaded by

Mohammed Qatari
This document contains a series of questions related to managerial accounting concepts. It tests understanding of: [1] classification of costs as product vs. period costs; [2] components of prime and conversion costs; [3] calculation of total manufacturing costs; [4] identification of differential, sunk and opportunity costs; [5] identification of true/false statements regarding managerial accounting concepts like fixed vs. variable costs; and [6] calculation of variable cost per unit, total fixed costs, total variable costs, and total costs using the high-low method on tables of activity levels and indirect manufacturing elements.

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Managerial Accounting

Answer the following questions:

Question One:
1- Which of the following is NOT a period cost ?
A. marketing costs
B. general and administrative costs
C. research and development costs
D. manufacturing costs

2- Prime costs include:


A. direct materials and direct manufacturing labor costs
B. direct manufacturing labor and manufacturing overhead costs
C. direct materials and manufacturing overhead costs
D. only direct materials

3- Conversion costs include:


A. direct materials and direct manufacturing labor costs
B. direct manufacturing labor and manufacturing overhead costs
C. direct materials and manufacturing overhead costs
D. only direct materials

4- Total manufacturing costs equal :


A. direct materials + prime costs
B. direct materials + conversion costs
C. direct manufacturing labor costs + prime costs
D. direct manufacturing labor costs + conversion costs

5- a cost that has already incurred and that cannot be changed by any decision
made now or in future
A. Differential cost
B. Sunk cost
C. Opportunity cost
D. Product costs

6- It is the potential benefit that is given up when one alternative is selected over
another.
A. Differential cost
B. Sunk cost
C. Opportunity cost
D. Product costs

7- A difference in cost between any two alternatives


A. Differential cost
B. Sunk cost
C. Opportunity cost
D. Product costs
Question Two:
Identify each of the following statements as true or false and correct the false:

1. Total variable cost changes as activity level changes. T


2. Total Fixed Cost remains the same even when the activity level changes. T
3. Difference in revenues between any alternatives is known a differential
revenue. T
4. Sunk cost represents relevant cost for decision. F(irrelevant)
5. Conversation cost equals the sum of direct labor cost and direct manufacturing
cost. F( indirect manf. Cost)
6. Prime cost equals the sum of direct material, direct labor and direct other
expenses. T
7. A direct cost is a cost that can be easily traced to a specified cost object. T
8. An indirect cost is a cost that cannot be easily traced to a specified cost object.
T
9. Managerial Accounting must follow GAAP/IFRS. F( NOT FOLLOW)
10. Financial Accounting emphasizes decisions affecting the future. F(managerial
acc.)
11. Managerial accounting is concerned with providing information to managers
for use within the organization. T
12. The main objectives of managerial accounting is to provide information
needed for planning, evaluating and controlling operations, safeguarding the
organization's assets, and communicating with interested outside parties. T

Question Three:

Activity Indirect manufacturing


Level element
8,500 11,400
10,600 11,600
12,700 11,700
15,000 12,000
20,000 12,500
8,000 11,000
Required :
Using high - low method

Determine :
1 Variable cost per unit
2 Total Fixed Cost
3 Total Variable Cost
4 Total cost at 10,000 units
Question Four:

Activity Indirect manufacturing


Level element
800 93,000
1,100 114,000
1,200 119,000
1,300 126,000
900 100,000

Required :
Using high - low method

Determine :
1 Variable cost per unit
2 Total Fixed Cost
3 Total Variable Cost
4 Total cost at 950 units

Question Five:

Activity Indirect manufacturing


Level element
100 1,500
150 1,750
120 1,600
200 2,000
190 1,950
Required :
Using high - low method

Determine :
1 Variable cost per unit
2 Total Fixed Cost
3 Total Variable Cost
4 Total cost at 195 units

GOOD LUCK …

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