Accounting for Decision Making Final Exam
Course Introduction
Accounting for Decision Making provides students with a comprehensive understanding of how accounting information is used by managers to support strategic planning, control, and decision-making within organizations. The course covers fundamental concepts such as cost behaviors, budgeting, variance analysis, performance evaluation, and relevant costing. Emphasis is placed on the interpretation and application of financial and non-financial information to make informed business decisions, allocate resources effectively, and improve organizational efficiency. Through case studies and practical exercises, students develop skills to analyze accounting data and translate it into actionable insights for management.
Recommended Textbook
MANAGERIAL ACCOUNTING Version 1.0 by Kurt Heisinger and Joe Hoyle
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13 Chapters
878 Verified Questions
878 Flashcards
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Chapter 1: What Is Managerial Accounting
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Sample Questions
Q1) Which of the following is a product cost?
A)Supplies used in the Marketing Department.
B)Commissions paid to sales personnel.
C)Maintenance of manufacturing equipment.
D)Clerical support salaries in the Human Resource Department.
E)None of the above.
Answer: C
Q2) The term "product costs" refers exclusively to the direct labor used in the production process.
A)True
B)False
Answer: False
Q3) An example of selling costs would be salaries for marketing personnel.
A)True
B)False
Answer: True
Q4) Insurance costs for a production facility are best classified as selling costs.
A)True
B)False
Answer: False
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Chapter 2: How Is Job Costing Used to Track Production Costs
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Sample Questions
Q1) The entry to record depreciation on the factory building should include a:
A)debit to Work in Process Inventory.
B)debit to Manufacturing Overhead.
C)debit to Cost of Goods Sold.
D)credit to Work in Process Inventory.
E)None of the answer choices is correct.
Answer: B
Q2) Normal costing is preferred by most companies because it assigns actual overhead costs to jobs.
A)True
B)False
Answer: False
Q3) If the Manufacturing Overhead account has a credit balance after overhead has been applied to products,manufacturing overhead:
A)has been closed.
B)has been applied incorrectly.
C)is underapplied.
D)is overapplied.
E)None of the answer choices is correct.
Answer: D
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Chapter 3: How Does an Organization Use Activity-Based
Costing to Allocate Overhead Costs
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Sample Questions
Q1) As costing systems become more complex,they become more expensive to implement.
A)True
B)False
Answer: True
Q2) Step one of an activity-based costing (ABC)system is to:
A)identify costly production activities.
B)calculate a predetermined overhead rate.
C)identify activity cost pools.
D)identify cost drivers.
E)allocate overhead costs to products.
Answer: A
Q3) Refer to Exhibit 3-3.Using the direct method of allocating service department costs to production departments,how much of the Technology Support service department costs should be allocated to the Lamination Department?
A)$40,000
B)$160,000
C)$80,000
D)$320,000
E)None of the answer choices is correct.
Answer: C
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Chapter 4: How Is Process Costing Used to Track
Production Costs
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Sample Questions
Q1) When using a process costing system,product costs are tracked by department rather than by job.
A)True
B)False
Q2) For a manufacturing company using process costing,cost per equivalent unit is only calculated for direct labor and direct materials.
A)True
B)False
Q3) The production cost report does all the following except:
A)calculates production for the next period.
B)shows the equivalent units of production.
C)helps in controlling costs.
D)shows the costs to transfer out.
E)None of the answer choices is correct.
Q4) Because direct materials,direct labor,and overhead may enter a process at varying stages,equivalent units in Work-in-Process Inventory may be different for each of these components of production.
A)True
B)False
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Chapter 5: How Do Organizations Identify Cost Behavior
Patterns
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69 Flashcards
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Sample Questions
Q1) Refer to Exhibit 5-2.What was the variable cost per unit for the company's most recent fiscal year?
A)$120 per unit
B)$180 per unit
C)$145 per unit
D)$150 per unit
E)None of the answer choices is correct.
Q2) Factory maintenance costs are estimated for Bing Company based on the level of machine hours used.If total monthly fixed costs are $150,000,variable costs per machine hour are $8,and 15,000 machine hours are expected to be used in June,which of the following would be the best estimate of total maintenance costs?
A)$150,000
B)$120,000
C)$30,000
D)$270,000
E)None of the answer choices is correct.
Q3) Total mixed costs do not change in proportion to changes in activity.
A)True
B)False
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Chapter 6: How Is Cost-Volume-Profit Analysis Used for Decision Making
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Sample Questions
Q1) Contribution margin per unit is calculated by subtracting variable costs per unit and fixed costs per unit from the selling price per unit.
A)True
B)False
Q2) Refer to Exhibit 6-1.What is the break-even point in units?
A)3,600
B)6,000
C)4,500
D)18,000
E)None of the answer choices is correct.
Q3) Refer to Exhibit 6-6.Which of the following is the correct contribution margin per machine hour?
A)$12.50
B)$6.25
C)$0.08
D)$0.10
E)None of the answer choices is correct.
Q4) A change in the sales mix will always decrease the break-even point.
A)True
B)False
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Chapter 7: How Are Relevant Revenues and Costs Used to
Make Decisions
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Sample Questions
Q1) Sunk costs are costs incurred in the past that cannot be changed by future decisions.
A)True
B)False
Q2) Refer to Exhibit 7-9.If the sales value method is used to allocate the $12 in joint costs,what is the total amount that will be allocated to both products?
A)$12
B)$3
C)$10
D)$9
E)None of the answer choices is correct.
Q3) Refer to Exhibit 7-8.What amount of joint costs is allocated to product A using the physical quantities method (pounds)?
A)$360,000
B)$240,000
C)$80,000
D)$60,000
E)None of the answer choices is correct.
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Chapter 8: How Is Capital Budgeting Used to Make Decisions
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Sample Questions
Q1) If a project's net present value is positive,the internal rate of return is:
A)less than the discount rate.
B)equal to the discount rate.
C)greater than the discount rate.
D)cannot be determined without more information.
E)None of the answer choices is correct.
Q2) Roske Company is considering a project with an initial investment of $40,000 and annual cash inflows of $8,000 per year for seven years.The company's cost of capital is 12 percent.Factors for a 12 percent interest rate for seven years are shown below:
Future Value of $1 2.211
Present Value of $1 0.452
Future Value of an Annuity 10.089
Present Value of an Annuity 4.564
Using the net present value (NPV)to evaluate this proposal,the company should:
A)invest in the proposal since the NPV is 36,512
B)reject the proposal since the NPV is ($3,488).
C)reject the proposal since the NPV is ($36,512).
D)invest in the proposal since the NPV is $3,488.
E)None of the answer choices is correct.
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Chapter 9: How Are Operating Budgets Created
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Sample Questions
Q1) In a production budget,if the units to be produced is equal to the expected sales in units,then desired units of ending inventory is equal to the units in beginning inventory.
A)True
B)False
Q2) To determine how many units to produce in a period for the production budget,you would use all of the following except:
A)the number of units in beginning finished goods inventory.
B)the number of units in beginning raw materials inventory.
C)the expected sales in units.
D)the desired number of units in ending finished goods inventory.
E)None of the answer choices is correct.
Q3) All of the following items can appear on the cash collections and cash payments budget except:
A)direct labor.
B)depreciation expense.
C)selling and administrative.
D)direct materials.
E)None of the answer choices is correct.
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Chapter 10: How Do Managers Evaluate Performance Using Cost Variance Analysis
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Sample Questions
Q1) Companies using standard costing systems wait for actual product cost data before recording transactions related to production.
A)True
B)False
Q2) If a company has a favorable materials quantity variance of $3,300,the journal entry to record the use of direct materials in production along with this related quantity variance would include:
A)a credit to Materials Quantity Variance.
B)a credit to Materials Price Variance.
C)a debit to Materials Quantity Variance.
D)a debit to Materials Price Variance.
E)None of the answer choices is correct.
Q3) Refer to Exhibit 10-4.Based on this information,what is the variable overhead spending variance?
A)$45,000 unfavorable
B)$45,000 favorable
C)$54,000 unfavorable
D)$54,000 favorable
E)None of the answer choices is correct.
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Chapter 11: How Do Managers Evaluate Performance in
Decentralized Organizations
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Sample Questions
Q1) Refer to Exhibit 11-3.If Dillon's cost of capital is 25%,what is the division's residual income?
A)$ 200,000
B)$800,000
C)$440,000
D)$1,200,000
E)None of the answer choices is correct.
Q2) Segments of an organization are often referred to as divisions. A)True B)False
Q3) Which of the following statements is true regarding the use of the operating profit margin as a performance measure?
A)It includes the assets that produced the income.
B)It ignores the assets that produced the income.
C)It is calculated as net income divided by sales.
D)It is calculated as sales divided by operating income.
E)None of the answer choices is correct.
Q4) Return on investment (ROI)can be improved by decreasing operating profit margin. A)True B)False
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Chapter 12: How Is the Statement of Cash Flows Prepared and Used
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Sample Questions
Q1) The bottom of the statement of cash flows shows a net increase in cash of $350,000.What is this increase linked to elsewhere in the financial statements?
A)The income statement.
B)The statement of owners' equity.
C)The balance sheet.
D)The income statement,the balance sheet,and the statement of owners' equity.
E)None of the answer choices is correct.
Q2) Refer to Exhibit 12-3.Which of these would be added to net income as part of the operating activities
A)1,4,& 6
B)3,5,& 7
C)2,3,5,7,8,& 9
D)2,3,5,& 7
E)None of the answer choices is correct.
Q3) The end goal of preparing the statement of cash flows is to show what caused the change in cash from the beginning of the period to the end of the period.
A)True
B)False
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Chapter 13: How Do Managers Use Financial and
Nonfinancial Performance Measures
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Sample Questions
Q1) On a common-size income statement,net income should be stated as a percentage of:
A)gross margin.
B)total assets.
C)net sales.
D)current assets.
E)None of the answer choices is correct.
Q2) Companies with higher inventory turnover ratios tend to have lower inventory costs,including lower inventory storage and insurance costs,than companies with lower inventory turnover ratios.
A)True
B)False
Q3) All of the following are nonfinancial measures that might be used by transportation companies such as FedEx except:
A)percentage of damage-free goods.
B)percentage of on-time deliveries.
C)average collection period.
D)hours of employee training.
E)None of the answer choices is correct.
Page 15
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