Question

a. As organizations adapt to the changing environment, all of the following influence the role of management accounting except:

a)external reporting requirements

b)global competition

c)investment opportunities

d)technological change

b. Bey Co reported the following data for the year just ended: sales revenue, $890,000; cost of goods sold, $400,000; costs of good manufactured, $330,000; and selling and administrative expenses, $120,000. Bey Co's operating income would be:

a)770,000

b)40,000

c)160,000

d)490,000

e)370,000

c. Which of the following costs is a direct cost to a manufactured product?

a)Accountants who accumulate the costs of the product

b)Wages of an assembly worker who works specifically on the product

c)Depreciation expense on factory equipment used for the product

d)Factory supervisor who oversees the production of several different types of products

Answer 1

Answer 1:

Option a: External reporting requirements

Explanation:

Management accounting considers those factors which are relevant in decision making between two or more alternatives.

Global competition, investment opportunities, and technological changes relate to management accounting.

Change in reporting requirements does not influence management accounting as management accounting does not cover reporting requirements.

Hence, option 'a' is correct and rest all are incorrect.

Answer 2:

Optin e: $ 370,000

Explanation:

Sales (-) Cost of goods sold (-) Selling and administration expenses

= 890,000 (-) 400,000 (-) 120,000

= $ 370,000

Hence, option 'e' is correct and rest all are incorrect.

Answer 3:

Option b: Wages of an assembly worker who works specifically on the product

Explanation:

Direct expense is an expense that can be measured on a per-unit basis.

Wages of a worker who works on a particular product are paid on the basis of the number of units the worker produces, so it is a direct cost.

Accountants' salary, depreciation and factory supervisor salary are paid irrespective of production. So, these are indirect costs.

Hence, option 'b' is correct and rest all are incorrect.

In case of any doubt, please feel free to comment.