Executives of a Company Deal Less with Details of the Operational

question 122

Multiple Choice

Executives of a company deal less with details of the operational activities and deal more with the higher meaningful aggregations of information or "coarser" information. What refers to the level of detail in the model?

• A) Drill-down
• B) Visualization
• C) Granularity
• D) Consolidation

Analyze the variance reports for better management decisions and its importance for internal reporting.

Recognize the components of the balanced scorecard approach and its perspective exclusion.

Determine the correct treatment of variance accounts within financial reporting.

Understand the implications of reporting costs at standard versus actual costs for external financial statements.

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Definitions:

Inspection Cost

Expenses incurred to ensure products meet quality standards, including costs of labor, equipment, and facilities used in inspection.

Overhead Cost

Expenses related to the day-to-day running of a business that cannot be directly tied to a specific product or service, such as rent, utilities, and administrative salaries.

Machine Hours

This is a measure of the amount of time a machine is operated and is often used in the allocation of manufacturing overhead to products based on usage.

High-low Method

A method employed in managerial accounting that estimates variable and fixed costs by analyzing the most and least active periods.