1. A small business producing kitchen cabinets or doing housing construction would likely leave out which of the following costs in their normal analysis for managerial accounting?

Select one:

a. Direct Labour: Contracts specify a labour allowance so you don't have to track the actual cost.

b. All of these. Small businesses usually don't track anything.

c. Manufacturing overhead: It's too hard to understand all that predetermined rates and ABC stuff.

2. Breakeven

Select one:

a. Contribution Margin equals fixed costs.

b. Total Revenue equals total contribution margin.

c. Breakeven analysis is used mainly for non-profit businesses which do not pursue profits. They just want to cover their costs - hence breakeven analysis is performed on their business activities.

d. Total Revenue equals fixed costs.

3. GAAP and managerial accounting?

Select one:

a. GAAP is the underlying foundation of managerial accounting. Ever since Sir Francis Gaap developed double entry accounting we stand by the principles of ethics and good reporting.

b. all of these.

c. Some would suggest that GAAP rules are the foundations of all managerial accounting analysis - and therefore the two are inextricably linked.

d. GAAP is about rules. We don't need rules! We need information to help managers make good decisions.

4. What is normal costing all about?

Select one:

a. None of these

b. We have to set up cost systems for normal operations of a business so that exceptions can be hilited in exception reporting.

c. Only include costs of normal operations. Other items are considered extraordinary and should not be included in the analysis for normal costing.

d. It only takes into consideration normal volume of operations.

5. Which of the following would be included in cost of goods manufactured for a cabinet company?

Select one:

a. Sales commissions paid out at 3% of selling price of cabinets.

b. Audit fees paid at the end of the year totalling $32,000 in accordance with GAAP.

c. All of these should be included.

d. Wages paid to shop maintenance workers.