2 4 6 1 A cost is considered fixed if it does not change in total and a cost is considered variable if it does not change per unit includes factory costs such as cleaning supplies taxes insurance and janitor wages a Indirect labor b Period costs c Manufacturing overhead d Direct materials 3 Which of the following parties would be more interested in managerial Investors accounting data than in financial accounting data a Creditors b Employees c Business owners d costs vary in total in direct proportion to changes in activity level a Differential b Variable c Opportunity d Fixed 5 Which of the following are most likely fixed costs a Property taxes b Administrative salaries c Rent d Electricity used to operate machinery In an automobile manufacturing plant assembly line workers wages are direct labor costs 7 Direct materials become an important component of the finished product and their cost can be easily and conveniently traced to the finished product 8 Which of the following statements are true a Advertising and sales commissions are period costs b Direct labor and indirect labor are product costs c Factory cleaning and maintenance are period costs These are manufacturing overhead which are product costs d Sales commissions and shipping costs are product costs All selling and administrative costs are period costs 9 Which type of cost is never relevant and should be disregarded when making decisions a Differential b Sunk c Opportunity 10 True or false Monitoring metrics that are important to various areas of operations is part of the directing leading function 11 The Sarbanes Oxley Act allows a maximum of 20 years of jail time for fraudulent reporting 12 The difference in costs between two alternatives is called a n cost a Differential b Sunk c Common d Opportunity costs a Service b Manufacturing c Merchandising 13 The Sarbanes Oxley SOX Act is focused on the managerial accounting system a b was primarily aimed at renewing investor confidence c puts more responsibility on accountants and less on managers d has many implications for managers 14 Direct materials direct labor and manufacturing overhead are all product 15 firms convert materials into finished products 16 Determining the key factors that are important to a company s success is a major component of the planning function 17 A relevant cost a must pertain to the future b must differ between alternatives c d will not influence a decision is a differential cost 18 Which of the following statements are true a The wages of assembly line workers are period costs b Nonmanufacturing costs are period costs c Period costs are expenses in the same period in which they are incurred d Period costs are also called inventoriable costs 19 Controlling includes monitoring results to ensure that expectations are being 20 Salaries of managers and maintenance personnel are examples of labor met costs a direct b indirect 21 Direct materials and direct labor are both a Selling and administrative costs b Period costs c Nonmanufacturing costs d Manufacturing costs are engaging in the function a Directing b Controlling c Organizing 22 When classifying costs product costs relate to making a product and period costs relate to delivering and selling a product 23 When managers put the plan into action with detailed decision making they 24 Ethics refers to standards of conduct for judging right from wrong 25 The Sarbanes Oxley Act is all it takes to create an ethical culture in an organization imposes penalties for whistleblowers includes rules that should help employees make ethical decisions a b c d recommends that all public companies adopt a code of ethics for senior financial officers 26 A cost that can be easily and conveniently traced to a specific cost object is a n direct cost whereas costs that cannot be easily and conveniently traced are indirect costs 27 In an attempt to reduce the opportunities for error and fraud SOX places 28 Budgeting is an important part of the process additional responsibilities on a boards of directors b all managers c all investors d external auditors a Planning and organizing b Controlling c Directing and leading 29 Indirect materials include a Supervisor salaries b Laptop computer keyboards c Factory rent and insurance d Nails glue and thread 30 True or False Taking actions that implement the company s plan is a key part of the control process 31 Companies with strong ethical cultures a have higher levels of customer satisfaction b do not need to create tip lines to protect whistleblowers c have higher productivity than those without such cultures d have adopted a code of ethics that ensures managers will act ethically 32 Managers must conduct a review of the company s internal control system and issue a report of their effectiveness This was enacted as part of SOX in an attempt to a emphasize the importance of the character of managers and employees b reduce the opportunity for error and fraud c counteract the incentives to commit fraud 33 Planning organizing involves a measuring the company s actual results b monitoring the company s actual results c motivating employees to achieve results d setting goals and tactics 34 Which of the following are considered nonmanufacturing costs a Company president s salary b Sales commissions c Assembly line worker wages Insurance on plant equipment d 35 Inventoriable costs is another term for product costs 36 Costs that have already been incurred and can not be changed by decisions made in the current period or I the future periods are called sunk costs 37 Which of the following are marketing or selling expenses a Sales commissions b Administrative salaries c Sales salaries d Advertising another object 38 True or False A given cost can be relevant to one scenario and irrelevant to 39 A specific item that managers are trying to find the cost of is called a n cost 41 Materials are treated as indirect costs when it is not worth the cost or effort 40 What are the three basic management functions a Recording analysis and reporting b Planning reporting and analysis c Planning recording and summarizing d Planning directing and controlling to trace them to specific product 42 Opportunity costs a are out of pockets costs b should be considered in decision making c are the costs of not doing something d are uncommon in decision making 43 Which of the following statements are true a There are many different ways to categorize costs b Out of pocket costs do not always represent an