Managerial Accountants – Multiple Choice Questions
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MULTIPLE CHOICE QUESTIONS
Managerial accountants:
rarely become involved in an organizations decision-making activities.
make decisions that focus solely on an organizations accounting matters.
collect data and provide information so that decisions can be made.
often serve as a cross-functional team member, making a wide range of decisions.
become involved in activities “C” and “D.”
Answer: E LO: 1 Type: RC
Factors in a decision problem that cannot be expressed in numerical terms are:
qualitative in nature.
quantitative in nature.
predictive in nature.
sensitive in nature.
uncertain in nature.
Answer: A LO: 2 Type: RC
At which step or steps in the decision-making process do qualitative considerations generally have the greatest impact?
Specifying the criterion and identifying the alternatives.
Developing a decision model.
Collecting the data.
Making a decision.
Identifying the alternatives.
Answer: D LO: 2 Type: RC
An accounting information system should be designed to provide information that is useful. To be useful the information must be:
qualitative rather than quantitative.
unique and unavailable through other sources.
historical in nature and not purport to predict the future.
marginal between two alternatives.
relevant, accurate, and timely.
Answer: E LO: 2 Type: RC
To be useful in decision making, information should possess which of the following characteristics?
Relevance
Accuracy
Timeliness
Answer: C LO: 2 Type: RC
A trade-off in a decision situation sometimes occurs between information:
accuracy and relevance.
relevance and uniqueness.
accuracy and timeliness.
sensitivity and accuracy.
sensitivity and relevance.
Answer: C LO: 2 Type: RC
Which of the following best defines the concept of a relevant cost?
A past cost that is the same among alternatives.
A past cost that differs among alternatives.
A future cost that is the same among alternatives.
A future cost that differs among alternatives.
A cost that is based on past experience.
Answer: D LO: 3 Type: RC
Consider the following costs and decision-making situations:
The cost of existing inventory, in a keep vs. disposal decision.
The cost of special electrical wiring, in an equipment acquisition decision.
The salary of a supervisor who will be transferred elsewhere in the organization, in a department-closure decision.
Which of the above costs is (are) relevant to the decision situation noted?
I only.
II only.
III only.
I and II.
II and III.
Answer: B LO: 3 Type: N
The following costs are relevant to the decision situation cited except:
the cost of hiring a full-time staff attorney, in a decision to establish an in-house legal department or retain the services of a prominent law firm.
the remodeling cost of existing office space, in a firms decision to stay at its current location or move to a new building.
the long-term salary costs demanded by Joe Torrez (a superstar) and Rip Moran (an average player) in baseball contract negotiations, in a decision that determines the amounts by which ticket prices must be raised.
the cost to enhance an airlines Web site, in a decision to expand existing service to either Salt Lake City or Phoenix.
the commissions that could be earned by a salesperson, in a decision that involves salesperson compensation methods (i.e., commissions or flat monthly salaries).
Answer: D LO: 3 Type: N
Which of the following costs can be ignored when making a decision?
Opportunity costs.
Differential costs.
Sunk costs.
Relevant costs.
All future costs.
Answer: C LO: 4 Type: RC