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ACC 406 Chapter 2: Chapter 2

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pearsquirrel474

6 Feb 2012

School

Ryerson University

Department

Course

Professor

Vincent Cappelli

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Document Summary

Acc 406 chapter 2 -- basic managerial accounting concepts. Cost: is the amount of cash or cash equivalent sacrificed for goods/services tha t are expected to bring a current or future benefit. Expenses: costs that are used up in the production of revenues, ie, that are exp ired costs. Price: is the revenue per unit; for the company, revenue and price are the same; cost is different. Accumulating costs: is the way that costs are measured and recorded (bill arrive s, bookkeeper records and addition to the telephone expense and account payable) Assigning costs: is the way a cost is linked to an object (why the money was spe nt) Cost objects: is any item such as a product, customer, department, project, geog raphic region, plant, etc. for which costs are measured and assigned. Ex, taking a summer course = course is cost object; cost would also inc lude, tuition, books, fees, transportation and opportunit cost (foregone wages)

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Related Questions

Multiple Choice Questions

1. A cost center is a unit of a business that incurs costs butdoes not directly generate revenues. Which of the following woulddefinitely not be considered a cost center?
A. Accounting department.
B. Purchasing department.
C. Research department
D. Advertising department.
E. All of these could be considered cost centers.

2. A unit of a business that not only incurs costs, but alsogenerates revenues, is called a:
A. Performance center.
B. Profit center.
C. Cost center.
D. Responsibility center.
E. Expense center.

3. Regardless of the system used in departmental costanalysis:
A. Direct costs are allocated, indirect costs are not.
B. Indirect costs are allocated, direct costs are not.
C. Both direct and indirect costs are allocated.
D. Neither direct nor indirect costs are allocated.
E. Total departmental costs will always be the same.

4. An accounting system that provides information thatmanagement can use to evaluate the profitability and/or costeffectiveness of a department's activities is a:
A. Departmental accounting system.
B. Cost accounting system.
C. Service accounting system.
D. Revenue accounting system.
E. Standard accounting system.

5. Expenses that are easily traced and assigned to a specificdepartment because they are incurred for the sole benefit of thatdepartment are called:
A. Direct expenses.
B. Indirect expenses.
C. Controllable expenses.
D. Uncontrollable expenses.
E. Fixed expenses.

6. Costs that the manager has the power to determine or at leaststrongly influence are called:
A. Uncontrollable costs.
B. Controllable costs.
C. Joint costs.
D. Direct costs.
E. Indirect costs.

7. Responsibility account performance reports:
A. Become more detailed at higher levels of management.
B. Become less detailed at higher levels of management.
C. Are equally detailed at all levels of management.
D. Are useful in any format.
E. Are irrelevant.

8. Which of the following is an example of a performance measureof internal business processes which would be found in a balancedscorecard?
A. Product defect rates
B. Number of new customers
C. Employee satisfaction
D. Return on Investment
E. Sales growth

9. Which of the following is an example of a performance measureof the customer perspective which would be found in a balancedscorecard?
A. Product defect rates
B. Number of new customers
C. Employee satisfaction
D. Return on Investment
E. Sales growth

burgundybadger233

Multiple Choice Questions

1. A cost center is a unit of a business that incurs costs butdoes not directly generate revenues. Which of the following woulddefinitely not be considered a cost center?
A. Accounting department.
B. Purchasing department.
C. Research department
D. Advertising department.
E. All of these could be considered cost centers.

2. A unit of a business that not only incurs costs, but alsogenerates revenues, is called a:
A. Performance center.
B. Profit center.
C. Cost center.
D. Responsibility center.
E. Expense center.

3. Regardless of the system used in departmental costanalysis:
A. Direct costs are allocated, indirect costs are not.
B. Indirect costs are allocated, direct costs are not.
C. Both direct and indirect costs are allocated.
D. Neither direct nor indirect costs are allocated.
E. Total departmental costs will always be the same.

4. An accounting system that provides information thatmanagement can use to evaluate the profitability and/or costeffectiveness of a department's activities is a:
A. Departmental accounting system.
B. Cost accounting system.
C. Service accounting system.
D. Revenue accounting system.
E. Standard accounting system.

5. Expenses that are easily traced and assigned to a specificdepartment because they are incurred for the sole benefit of thatdepartment are called:
A. Direct expenses.
B. Indirect expenses.
C. Controllable expenses.
D. Uncontrollable expenses.
E. Fixed expenses.

6. Costs that the manager has the power to determine or at leaststrongly influence are called:
A. Uncontrollable costs.
B. Controllable costs.
C. Joint costs.
D. Direct costs.
E. Indirect costs.

7. Responsibility account performance reports:
A. Become more detailed at higher levels of management.
B. Become less detailed at higher levels of management.
C. Are equally detailed at all levels of management.
D. Are useful in any format.
E. Are irrelevant.

8. Which of the following is an example of a performance measureof internal business processes which would be found in a balancedscorecard?
A. Product defect rates
B. Number of new customers
C. Employee satisfaction
D. Return on Investment
E. Sales growth

9. Which of the following is an example of a performance measureof the customer perspective which would be found in a balancedscorecard?
A. Product defect rates
B. Number of new customers
C. Employee satisfaction
D. Return on Investment
E. Sales growth

lemonrhinoceros823

Match each of the six following terms with the phrase that mostclosely describes it. Each answer may be used only once. _____ 1.Direct costs _____ 2. Fixed costs _____ 3. Incremental costs _____4. Enterprise resource planning system _____ 5. Noncontrollablecosts _____ 6. Opportunity costs (A) Costs that increase ordecrease in total in response to increases or decreases in thelevel of business activity (B) Costs that are directly traceable toa product, activity, or department (C) Costs that a manager caninfluence (D) The difference in costs between decision alternatives(E) Costs incurred in the past that are not relevant to presentdecisions (F) Costs that cannot be influenced by a manager (G)Financial plans prepared by management accountants (H) Value of thebenefits foregone when one decision alternative is selected overanother (I) Costs that cannot be directly traced to a product,activity, or department or are not worth tracing (J) Costs that donot change in total with changes in the level of business activity(K) Systems that prepare a master production system and all of thesupport across the company