1) "Cost management" describes

A) the actions by managers to increase value for customers while continuously reducing and controlling costs.

B) the identification of excessive costs in the production process.

C) the satisfaction of customers' needs.

D) actions by managers to satisfy customers while maintaining current cost levels.

E) ensuring all costs remains constant.

3) Management accounting

A) helps creditors evaluate the company's performance.

B) helps managers make decisions.

C) is useful for external and internal users.

D) creates technical reports that require external audit for verification.

E) is the same as cost accounting.

4) Management accounting

A) measures, analyzes, and reports financial and nonfinancial information to internal managers.

B) provides information about the company as a whole.

C) reports information that has occurred in the past that is verifiable and reliable.

D) provides information that is generally available only on a quarterly or annual basis.

E) must follow generally accepted accounting principles.

5) Financial accounting

A) focuses on the future and includes activities such as preparing next year's operating budget.

B) must comply with IFRS/ASPE.

C) reports include detailed information on the various operating segments of the business such as product lines or departments.

D) is prepared for the use of department heads and other employees.

E) is primarily concerned with profitability analysis.

6) "Cost" is defined by accountants as a resource sacrificed or foregone to achieve a specific objective.

TRUE FALSE

7) Costs of Sales is another way of phrasing Cost of Goods Sold.

TRUE FALSE

8) An actual cost is a predicted cost.

TRUE FALSE

Chapter 3 Cost-Volume-Profit Analysis

9) Cost-volume-profit analysis is useful for

A) helping managers to answer "what-if" questions.

B) implementing a differentiation strategy.

C) eliminating uncertainty about external factors, such as interest rates.

D) for long-range planning.

E) assigning costs to products.

11) Which of the following are necessary assumptions when using the contribution margin method of determining the break-even point?

A) Average unit costs must be known.

B) There must be an input-related cost driver.

C) Fixed costs are irrelevant.

D) Total variable cost must be known.

E) Unit selling price and unit variable cost must be known.

Chapter 4 Job Costing

12) Cost assignment includes cost allocation for indirect costs and direct costs.

TRUE FALSE