TUTORS COPY

ACCT2112 Management Accounting

Tutorial Questions with Suggested Answers
Chapter 1: The Manager and Management Accounting
Section A: Multiple Choice Questions
Instruction: Select the best answers for the following questions.
1.

Management accounting
a.
b.
c.
d.
e.

2.

Management accounting differs from financial accounting in that financial accounting

is
a.
b.
c.
d.
e.

3.

focuses on estimating future revenues, costs, and other measures to forecast

activities and their results.
provides information about the company as a whole.
reports information that has occurred in the past that is verifiable and reliable.
provides information that is generally available only on a quarterly or annual
basis.
none of the above.

more oriented toward the future.

primarily concerned with external financial reporting.
concerned with non-quantitative information.
heavily involved with decision analysis and implementation of decisions
none of the above.

The person MOST likely to use management accounting information is a(n)

a.
b.
c.
d.
e.

banker evaluating a credit application.

shareholder evaluating a stock investment.
governmental taxing authority.
assembly department supervisor.
none of the above.

Page 1

4.

Planning decisions focus on

a.
b.
c.
d.
e.
f.

5.

Control includes
a.
b.
c.
d.
e.

6.

selecting organization goals.

predicting result under various alternative ways of achieving those goals.
deciding how to attain the desired goals
communicating the goals and how to attain them to the entire organization..
all of the above.
none of the above.

implementing planning decisions.

evaluating performance.
providing feedback to help with future decision making.
all of the above.
none of the above.

Place the five-step in the decision-making process in the correct order:

A = Obtain information
B = Make decisions by choosing among alternatives
C = Identify the problem and uncertainties
D = Implement the decision
E = Make predictions about the future
a.
b.
c.
d.
e.

7.

D, B, E, A, C.
E, D, A, B, C.
C, A, E, B, D.
A, E, B, D, C.
none of the above.

Place the four business functions in the order they appear along the value chain:
A = Customer service
B = Design
C = Distribution
D = Production
a.
b.
c.
d.

ABDC
ACDB
BDCA
BADC

Page 2

8.

The value chain is the sequence of business functions in which

a.
b.
c.
d.
e.

value is deducted from the products or services of an organization.

value is proportionately added to the products or services of an organization.
products and services are evaluated with respect to their value to the supply chain.
usefulness is added to the products or services of an organization.
none of the above.

THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 9 THROUGH 16.

Burger King is a hamburger fast food restaurant. Classify each of the following cost item
into one of the business functions of the value chain shown in Exhibit 1-2 (see Horngren et al
2015, p. 28)

9.

Cost of oil for the deep fryer.

a.
b.
c.
d.
e.
f.

10.

Wages of the counter help who give customers the food they order.
a.
b.
c.
d.
e.
f.

11.

Research and development (R&D).

Design of products, services or processes.
Production.
Marketing.
Distribution.
Customer service.

Research and development (R&D).

Design of products, services or processes.
Production.
Marketing.
Distribution.
Customer service.

Cost of the costume for the King on the Burger King television commercials.
a.
b.
c.
d.
e.
f.

Research and development (R&D).

Design of products, services or processes.
Production.
Marketing.
Distribution.
Customer service.

Page 3

12.

Cost of childrens toys given away free with kids meals.

a.
b.
c.
d.
e.
f.

13.

Cost of posters indicating the special two cheeseburgers for $2.

a.
b.
c.
d.
e.
f.

14.

Research and development (R&D).

Design of products, services or processes.
Production.
Marketing.
Distribution.
Customer service.

Salaries of the food specialists who create new sandwiches for the restaurant chain.
a.
b.
c.
d.
e.
f.

16.

Research and development (R&D).

Design of products, services or processes.
Production.
Marketing.
Distribution.
Customer service.

Costs of frozen onion rings and French fries.

a.
b.
c.
d.
e.
f.

15.

Research and development (R&D).

Design of products, services or processes.
Production.
Marketing.
Distribution.
Customer service.

Research and development (R&D).

Design of products, services or processes.
Production.
Marketing.
Distribution.
Customer service.

Cost of to-go bags requested by customers who could not finish their meals in the
restaurant.
a.
b.
c.
d.
e.
f.

Research and development (R&D).

Design of products, services or processes.
Production.
Marketing.
Distribution.
Customer service.
Page 4

Section B: Questions/Problems
Note to students: The assigned questions/problems are based on Horngren, CT, Datar, SM
& Rajan, M. (2015). Cost Accounting: A Managerial Emphasis. Global Edition, 15th Edition.
Prentice Hall: Upper Saddle River.
Chapter

Topic

The manager and

management accounting

Assigned Questions /
Problems
1-9; 1-21

1-9
Planning decisions focus on selecting organization goals and strategies, predicting
results under various alternative ways of achieving those goals, deciding how to attain the
desired goals, and communicating the goals and how to attain them to the entire organization.
Control decisions focus on taking actions that implement the planning decisions,
deciding how to evaluate performance, and providing feedback and learning to help future
decision making.

1-21
Action
a.
b.
c.
d.
e.

Decision
Planning
Control
Control
Planning
Planning

Page 5