Which of the Following Statements Is True of Management Accounting

question 35

Multiple Choice

Which of the following statements is true of management accounting?

• A)The primary users of management accounting are the external stakeholders of a company.
• B)Management accounting information is used to help managers plan and control their operations.
• C)Management accounting information requires an external audit by an independent CPA.
• D)Management accounting information must comply with Generally Accepted Accounting Principles.

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Definitions:

Fixed Overhead Volume Variance

The difference between the budgeted fixed overhead and the actual fixed overhead incurred, due to changes in production volume.

Standard Cost

A predetermined cost of manufacturing an item, including direct materials, labor, and overheads, used for budgeting and performance evaluation.

Overhead Cost Performance Report

A document that compares the actual overhead costs incurred to the budgeted or standard overhead costs, for the purpose of monitoring and controlling these costs.

Efficiency Variances

Variances that occur when the actual performance deviates from the expected standards, often analyzed in terms of time, cost, and materials.