SPRING 20 A200 EXAM 2 managerial accounting roly on accepted principles that are

Question

SPRING 20 A200 EXAM 2 managerial accounting roly on accepted principles that are enforced through an extensive set of rules and guidelines True Faise 2. Prime costs consist of direct labor and factory overhead. True Faise 3. Total quaity management and just-in-ime manufacturng focus on qualty improvement as well as on time customer deliveries True False 4 The cost to heat a manufacturing facility can be directly linked to the number of units produced. True False As the volume increases, foxed cost per unit of output remains constant. True False 5. 6. Cost-volume-profit analysis requires management to classify all costs as either fxed or variable with respect to production or sales volume within the relevant range of operations True False 7. A fixed cost: A. Requires the future outlay of cash and is relevant for future decision making B. Does not change with changes in the volume of activity within the relevant range. C. Is directly traceable to a cost object D. Changes with changes in the volume of activity within the relevant range. E. Is irrelevant for cost-volume-profit and short-term decision making 8. A direct cost is a cost that is: A. Identifiable as controllable B. Traceable to the company as a whole. C. Does not change with the volume of activity. D. Traceable to a single cost object E. Traceable to multiple cost objects

Explanation / Answer

Q1. Answer is True Q2. Answer is False. Prime cost is sum of direct material and direct labour cost. Q3. Ansswer is false. JIT concentrate on making the pproduct as and when required i.e. on receiving the order from customer. Q4. Answer is False. Cost of heating the manufacturing plant is not directlt linked to units produced , it is a indirect factory cost. Q5. Answer is False. Fixed cost per unit falls with the increase in output. Q6. Answer is True. CVP analysis needs to classify the cost under variable and fixed cost only. Q7. Answer is B. Does not change with the change in volume of activity within relevant range. Q8. Answer is D. Traceable to single cost object.

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