1. The organizational objectives of a company typically focus on its long range intentions for operating and its overall business philosophy that can provide useful guidance for employees seeking to please their managers.

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True

False

2.Management is the process of planning, organizing, and controlling a certain task to realize the objectives of the organization.

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True

False

3.A controller, also known as a comptroller, is the chief accounting officer of a company or an organization.

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True

False

4.Decision-making is an inherent function of management.

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True

False

5.Financial accounting focuses on relevance (timeliness of data) in the emphasis of its reports.

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True

False

6.The controller is responsible for reports to management on the marketing aspect or operations of the company.

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True

False

7.Management accounting is exclusively for the use of internal users.

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True

False

8.There exists no unifying model or equation for management accounting.

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True

False

9.Cost is anything of value foregone or sacrificed to attain an objective.

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True

False

10.Financial accounting must adhere at all times with the generally accepted accounting principles.

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True

False

11.Cost allocation is the collection of cost data in some organized way via an accounting system.

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True

False

12.Management accounting's time orientation is mainly historical or past data.

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True

False

13.The product report of management accounting is discretionary or only optional.

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True

False

14.Cost accumulation is the assignment and re-assignment of a cost or group of costs to one or more cost objectives.

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True

False

15.Periodic preparation of financial accounting reports (financial statements) are necessary.

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True

False

16.Product cost refers to the cost allocated for sold and unsold units of production.

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True

False

17.The controller primarily exercises a staff function as the controller's office gives advice and service to other departments and to the entire organization as a whole.

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True

False

18.Period cost refers to costs charged against current revenues.

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True

False

19.Fixed costs are costs which vary in direct proportion to changes in volume of production.

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True

False

20.Capital expenditures refer to outlays that benefit future periods and are classified as assets.

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True

False

21.Variable costs are costs not affected by changes in volume within a relevant range.

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True

False

22.Budgeted cost refers to cost estimated to be incurred in undertaking an activity or in the completion of a project.

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True

False

23.Standard costs refer to predetermined costs per unit of finished product for materials, labor, and factory overhead.

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True

False

24.Imputed costs are the benefits or advantages foregone in rejecting an alternative.

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True

False

25.Differential costs are cost items which can be regulated depending on the level of management one occupies.

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True

False

26.Marginal cost refers to the increase in total cost brought about by the production of an additional unit.

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True

False

27.Sunk costs are historical costs irrelevant in decision-making.

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True

False

28.Relevant costs are future differential costs. They differ in two or more alternatives or are affected by decision to be made.

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True

False

29.Discretionary costs are costs incurred depending on the discretion of a manager.

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True

False

30.Costs are frequently measured by the monetary unit that must be paid for goods and services.

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True

False

31.Under variable costing, no overhead costs are charged to the product.

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True

False

32.Product costs under variable costing include purely direct costs, which is why this method is oftentimes direct costing.

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True

False

33.A period cost is a non-inventoriable cost.

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True

False

34.Inventory cost under absorption costing is always higher than inventory cost under variable costing.

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True

False

35.Contribution margin equals sales minus all the fixed costs.

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True

False

36.Variable costing income statement highlights the contribution margin figure.

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True

False

37.The basic difference between absorption and variable costing is on the treatment of fixed overhead.

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True

False

38.One of the features of absorption costing income statement is that the data needed for cost-volume-profit and break-even analyses are readily available.

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True

False

39.Under variable costing, all variable costs are treated as product costs.

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True

False

40.Reporting under the variable costing concept is accomplished by matching variable costs against revenues and treating fixed costs as period costs.

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True

False

41.Standards serve as a measure of performance established by management as a guide in making economic decisions.

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True

False

42.Standard costs refer to the amount incurred for actual production.

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True

False

43.Management should conduct investigations only when the variance is unfavorable.

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True

False

44.All variances whether favorable or unfavorable should be investigated.

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True

False

45.The standard should be established by the authority so that it may be acceptable as a basis for measuring performance.

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True

False

46.Cost is computed by multiplying two factors- the physical factor and the quantity or time factor.

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True

False

47.Variance means the difference between the standard cost and the cost that should have been incurred for actual production.

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True

False

48.Variances can be computed for all the three cost elements of production, namely materials, labor and factory overhead.

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True

False

49.One of the purposes of standard costs is to simplify costing procedures and expedite cost reports.

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True

False

50.A basic standard is also called theoretical standard.

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True

False