I-Rev1 - LESSON 1 Review material Review questions Question...

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LESSON 1 Review material Review questions Question 1 — Multiple choice a. Management accounting is concerned primarily with which of the following activities? 1) External reporting to investors, suppliers, creditors, authorities, and others 2) Historical information 3) Cost planning, control, and profitability analysis 4) All of the above Use the following information to answer questions (b) and (c): Gamma Co.’s manufacturing operations recorded the following information for March 20X7: Inventories March 1, 20X7 March 31, 20X7 Direct materials € 36,000 € 30,000 Work in progress 18,000 12,000 Finished goods 54,000 72,000 Additional information for the month of March 20X5: Direct materials purchased € 84,000 Direct labour costs incurred 60,000 Direct labour rate per hour 7.50 Factory overhead rate per direct labour-hour 10.00 b. What was the prime cost for the month of March 20X7? 1) €90,000 2) €120,000 3) €144,000 4) €150,000 c. What was the conversion cost for the month of March 20X7? 1) €90,000 2) €140,000 3) €144,000 4) €170,000 Management Accounting Fundamentals Review material 1 1
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d. What are some of the challenges of the changing business environment? 1) Diversification and mass production. 2) Consumer satisfaction, quality, delivery, communication, and shortening product life cycles. 3) Providing Internet connection to all employees. 4) All the above e. Which of the following costs should be classified as a product cost? 1) Direct material used in a manufacturing company. 2) Indirect material used in a manufacturing company. 3) Indirect labour used to manufacture inventory. 4) All the above f. Elena Head was reviewing SuperCom’s financial statements and noticed that the company has no inventory accounts. She then concluded that the company was a service company. If Elena’s conclusion was wrong, which of the following may explain this situation? 1) SuperCom may be a merchandising company. 2) SuperCom may have all its inventories in other countries. 3) SuperCom may have implemented a 100% effective just-in-time inventory system. 4) SuperCom may work in a job-order system. g. Focusing on the value chain of business activities is an effective way to do what? 1) Increase customer satisfaction and manage costs more effectively. 2) Know exactly the strategic orientation of the company. 3) Build confidence amongst managers. 4) Divide the work equally among departments. h. Peter Drucker (Reading 1-2) argues that “information literate” managers will be able to ask and answer questions about their business, competition, markets, customers, and environment. This would result in which of the following? 1) “Information literate” managers will be more intelligent than before. 2)
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This note was uploaded on 06/07/2011 for the course ACCT 101 taught by Professor None during the Spring '11 term at University of Illinois, Urbana Champaign.

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I-Rev1 - LESSON 1 Review material Review questions Question...

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