,1. Which cost classification is used for decision-making purposes
in managerial accounting?
a) Fixed costs
b) Variable costs
c) Sunk costs
d) Opportunity costs
Correct Answer: d) Opportunity costs
Rationale: Opportunity costs are the potential benefits lost
when choosing one alternative over another, making them critical
for decision-making.
2. What is the main purpose of a flexible budget?
a) To predict cash flow
b) To analyze performance based on actual revenues and
expenses
c) To determine cost behavior
d) To allocate costs to products
Correct Answer: b) To analyze performance based on actual
revenues and expenses
, Rationale: Flexible budgets adjust for changes in activity levels,
allowing for meaningful variance analysis.
3. Which of the following costing methods assigns costs based on
the volume of production?
a) Job order costing
b) Process costing
c) Activity-based costing
d) Direct costing
Correct Answer: b) Process costing
Rationale: Process costing is used for homogenous products in
large quantities, assigning costs based on the total production
volume.
4. In managerial accounting, the term "relevant costs" primarily
refers to costs that:
a) Will not affect the decision-making process
b) Will only change with specific decisions
c) Are already incurred and cannot be changed
d) Are fixed over the range of production
Correct Answer: b) Will only change with specific decisions
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller emiliophd. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $13.49. You're not tied to anything after your purchase.