Which definition best describes indirect costs?

Costs can`t be directly associated with a product or service

Contribution per unit = £25; the break-even point = 80,000 units. Which statement is false?

To make a profit of £500,000, 95,000 units have to be sold

Manufacturing costs typically consist of...

direct labour, direct material, factory overheads

Which phrase best describes the role of the management accountant?

Management accountants facilitate the decision-making.

With respect to VARIABLE COSTS,

as production increases, the total costs increase

In absorption costing, what are the allocated costs?

Costs that can be directly associated with a department

Costs: Variable: £2.50; Fixed: £10,000 New machine change fixed costs + 15%, variable costs -5%

change to the new machine: 12,000 photos

Which of the following is a definition for variable costs?

Costs that vary directly with the number of units produced

The accounting rate of return is measured as follows:

Expressed as a % of the average funds invested in a project

Which of the following is a definition for direct costs

Costs are directly related to a cost object.

Which of the following is a definition of break-even point?

The situation where neither a profit or a loss is made

Which methods of costing are most appropriate for setting long-term prices?

Absorption and activity-based costing

Which of the following statements concerning the payback period, is not true?

It takes account of the time value of money

With respect to FIXED COSTS,

as production increases, the cost per unit decreases

What is a cost driver?

The event or activity that causes a cost to be incurred

Which of the following statements concerning the NPV is not true?

The project with lowest NPV should be selected.

Which of the following is a definition for fixed costs

Costs that remain the same whatever the level of output

studbud

Management Accouting

24 termsStudBud Administration209 plays

Test about #management accouting.

Flashcards24 cardsFPractice quizPHost liveL

Questions 24

Answers

1
Which definition best describes indirect costs?
Indirect costs are always manufacturing overhead costs.
Indirect costs are always fixed.
Costs which are not controlled directly by a manager.
Costs can`t be directly associated with a product or service
2
Contribution per unit = £25; the break-even point = 80,000 units. Which statement is false?
Selling price per unit = £55; variable cost per unit = £30
To make a profit of £300,000, 92,000 units have to be sold
The fixed costs are £2,000,000
To make a profit of £500,000, 95,000 units have to be sold
3
Manufacturing costs typically consist of...
direct labour, direct material, administration costs
direct labour, direct material, factory overheads
production and marketing costs
production and shipping costs
4
Which phrase best describes the role of the management accountant?
Management accountants prepare the financial statements.
Management accountants facilitate the decision-making.
Management accountants are primarily information collectors.
Management accountants process manufacturing transactions.
5
With respect to VARIABLE COSTS,
as production increases, the total costs increase
as production increases, the costs per unit decrease
as production increases, the costs per unit increase
as production increases, the total costs decrease
6
In absorption costing, what are the allocated costs?
Costs, which need to be spread over production departments
Costs that can be directly related with a service department
Costs that can be directly associated with a department
Costs, which need to be spread over products or services
7
If cost of production is $400, and the mark up is 33%, what is the GROSS PROFIT RATE?
33%
75,19%
24,81%
133%
8
Costs: Variable: £2.50; Fixed: £10,000 New machine change fixed costs + 15%, variable costs -5%
change to the new machine: 4,842 photos
change to the new machine: 4,000 photos
change to the new machine: 1,333 photos
change to the new machine: 12,000 photos
9
Which of the following is a definition for variable costs?
Costs that remain the same whatever the level of output
Costs that contain a fixed and variable element
Costs are directly related to a cost object
Costs that vary directly with the number of units produced
10
What is the break-even number: fixed costs = £3.250; Ticket price = £15. Variable costs = £1
233
167
217
179
11
The accounting rate of return is measured as follows:
Total profits expressed as a % of the average funds invested
Total profits expressed as a % of the total funds invested
Expressed as a % of the average funds invested in a project
Expressed as a % of the total funds invested in the project.
12
Which of the following is a definition for direct costs
Costs that remain the same whatever the level of output
Costs that contain a fixed and variable element
Costs are directly related to a cost object.
Costs that vary directly with the number of units produced
13
Which of the following is a definition of break-even point?
The situation where a profit is made
The situation where neither a profit or a loss is made
The fixed plus variable costs of the business
Difference between selling price and variable costs
14
Budgeted: 2,500 labour hours + overheads = £56,500. Actual: 2,350 hours + overheads = £54,050.
£1,000 under recovery
£940 under recovery
£940 over recovery
£1,000 over recovery
15
If bookkeeping services cost $40 per hour, and the mark up is 150%, what is the selling price?
$ 190
$ 100
$ 150
$ 60
16
Which methods of costing are most appropriate for setting long-term prices?
Absorption and marginal costing
Activity-based costing and marginal costing
Absorption and activity-based costing
Marginal costing, absorption, and activity-based costing
17
Which of the following statements concerning the payback period, is not true?
It takes account of the time value of money
It ignores cash flows after payback time has been reached
It measures the time to cover the initial investment.
The payback period is simple to calculate and understand
18
With respect to FIXED COSTS,
as production increases, the costs increases
as production increases, the cost per unit decreases
as production increases, the total costs decrease
as production increases, the total costs increases
19
The manufacturing cost of a product is $300 and the mark up is 75%, what is the selling price?
$ 225
$ 375
$ 525
$ 400
20
What is a cost driver?
All indirect costs
The event or activity that causes a cost to be incurred
A general ledger account
The manufacturing cost of a product.
21
Use either a 4% sales margin or a 7.5% cost mark-up. If cost of sales = £600. Selling price ?
£645 margin or £625 mark-up
£624 margin or £645 mark-up
£625 margin or £645 mark-up
£645 margin or £624 mark-up
22
Which of the following statements concerning the NPV is not true?
NPV is the sum of all the discounted cash flows.
The project with lowest NPV should be selected.
NPV technique takes account of all cash flows.
The NPV technique takes account of the time value of money
23
If production was 22,000 units, fixed costs $70,000 and var costs $90,000, cost per unit is?
$ 8,26
$ 8,60
$ 7,27
$ 6,25
24
Which of the following is a definition for fixed costs
Costs are directly related to a cost object
Costs that vary directly with the number of units produced
Costs that contain a fixed and variable element
Costs that remain the same whatever the level of output

Management Accouting Flashcards | StudBud