Managerial Accounting - Cost Orientation

The video tutorial covers the concept of cost orientation as a strategy to improve company performance by reducing per unit costs. It highlights the role of managerial accounting, which is internally focused and aids in decision-making and strategy development. The tutorial explains the two main cost categories: fixed and variable costs, and discusses various cost accounting methods such as standard costing and activity-based costing. Managerial accounting is presented as a tool to support cost-oriented strategies.

What is the primary focus of managerial accounting?

• External reporting to stakeholders

• Internal decision-making and strategy development

• Compliance with financial regulations

• Maximizing shareholder value

Which type of cost changes with the level of production?

• Opportunity cost

• Sunk cost

• Variable cost

• Fixed cost

What is a characteristic of fixed costs?

• They remain constant regardless of output

• They are directly tied to sales volume

• They decrease as production increases

• They vary with production levels

Which cost accounting method focuses on individual activities?

• Activity-based costing

• Standard costing

• Marginal costing

• Lean accounting

How does activity-based costing support cost orientation?

• By increasing fixed costs

• By focusing on external financial reporting

• By breaking down costs by individual activity

• By reducing overall production costs