Accounting for Managers
Exam Answer Key
Course Introduction
Accounting for Managers is designed to provide future business leaders with a comprehensive understanding of accounting principles and their application in managerial decision-making. The course covers the fundamentals of financial and management accounting, emphasizing the interpretation and analysis of financial statements, cost behavior, budgeting, and performance evaluation. Through case studies and practical exercises, students learn how to use accounting information to plan, control, and evaluate business operations, make informed financial decisions, and communicate effectively with stakeholders.
Recommended Textbook
Managerial Accounting 2nd Edition by Karen W. Braun
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14 Chapters
2698 Verified Questions
2698 Flashcards
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Chapter 1: Introduction to Managerial Accounting
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171 Verified Questions
171 Flashcards
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Sample Questions
Q1) Performing duties in accordance with relevant laws,regulations,and technical standards make up which IMA professional ethics standard?
A)Competence
B)Confidentiality
C)Credibility
D)Integrity
Answer: A
Q2) An example of the IMA's integrity standard is to:
A)abstain from engaging in or supporting any activity that might discredit the profession.
B)communicate information fairly and objectively.
C)keep information confidential except when disclosure is legally required.
D)provide decision support that is accurate,clear,concise and timely .
Answer: A
Q3) The American Institute of Certified Public Accountants was the first professional membership organization in the United States to earn the ISO 9001 certification.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Building Blocks of Managerial Accounting
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Sample Questions
Q1) What is the total cost for the research and development category of the value chain?
A)$92,000
B)$57,000
C)$89,000
D)$191,000
Answer: C
Q2) Wal-Mart classifies its clothing held for sale as:
A)finished goods inventory.
B)raw materials inventory.
C)work in process inventory.
D)merchandise inventory.
Answer: D
Q3) What was operating income?
A)$1,690
B)$2,430
C)$3,300
D)$4,000
Answer: A
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4
Chapter 3: Job Costing
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260 Flashcards
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Sample Questions
Q1) Which comes third in the flow of costs?
A)Cost of goods sold
B)Finished goods inventory
C)Raw materials inventory
D)Work in process inventory
Answer: B
Q2) What are the two basic types of costing systems?
A)Job costing and process costing
B)Periodic costing and perpetual costing
C)Product costing and materials inventory costing
D)Periodic costing and process costing
Answer: A
Q3) The entry to record the purchase of raw materials on account using a job costing system would include a:
A)credit to work in process inventory.
B)debit to accounts payable.
C)debit to raw materials inventory.
D)debit to work in process inventory.
Answer: C
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Page 5
Chapter 4: Activity-Based Costing, lean Production, and the Costs of Quality
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201 Flashcards
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Sample Questions
Q1) Waste activities is another name for value-added activities.
A)True
B)False
Q2) What is the total manufacturing cost per pillow?
A)$13.10
B)$ 5.10
C)$15.10
D)$ 7.10
Q3) The __________________system focuses on activities as the fundamental cost objects.It uses the costs of those activities as building blocks for compiling the indirect costs of products and other cost objects.
A)activities-based costing
B)job costing
C)process costing
D)product costing
Q4) Lean production systems typically focus on strengthening supply-chain management.
A)True
B)False
Page 6
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Chapter 5: Process Costing
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Sample Questions
Q1) The journal entry to record the ultimate completion of the units would include a debit to Finished Goods Inventory.
A)True
B)False
Q2) The first step of the 5-step process costing procedure is to summarize the flow of physical units.
A)True B)False
Q3) Assigning costs to units completed and to units in ending WIP inventory in a second department is a three-step process.
A)True
B)False
Q4) The journal entry to record the ultimate completion of the units would include a debit to the WIP inventory account of the last sequential production department.
A)True B)False
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Chapter 6: Cost Behavior
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Sample Questions
Q1) Mixed costs per unit decrease as volume increases because of the fixed cost component.
A)True
B)False
Q2) What would its operating income (loss)be for a month if Fresno Home Oil Services prepared a traditional income statement for a month?
A)$ 9,000
B)$ 900
C)$ 8,100
D)($1,175)
Q3) The Clauson Company has total fixed costs of $400,000.They also have $120,000 in total variable costs.These costs exist at a production level of 80,000 units.The fixed cost per unit is:
A)$6.50.
B)$1.50.
C)$5.00.
D)$3.50.
Q4) What are three methods used to estimate cost behavior? What are the advantages and disadvantages of each method?
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Chapter 7: Cost-Volume-Profit Analysis
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Sample Questions
Q1) On a CVP graph,the vertical distance between the total expense line and the total fixed cost line equals the operating income or operating loss.
A)True
B)False
Q2) The operating leverage factor indicates the percentage change in operating income that will occur from a 1% change in volume.
A)True
B)False
Q3) All else being equal,a company earns more income by selling high-contribution margin products than by selling an equal number of low-contribution margin products.
A)True
B)False
Q4) The weighted average contribution margin will always be the same as the contribution margin of the highest-volume product.
A)True
B)False
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Chapter 8: Short Term Business Decisions
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Sample Questions
Q1) The benefit foregone by not choosing an alternative course of action is referred to as a(n):
A)opportunity cost.
B)sunk cost.
C)variable cost.
D)incremental cost.
Q2) Assuming Spahr Company can purchase 5,000 units of the part from Sexton Company for $13 each,and the facilities currently used to make the part could be rented out to another manufacturer for $24,000 a year,what should Spahr Company do?
A)Make the part and save $4.20 per unit.
B)Make the part and save $2.20 per unit.
C)Buy the part and save $0.80 per unit.
D)Buy the part and save $1.80 per unit.
Q3) Which would NOT be considered in evaluating product or sales mix allocations?
A)Deciding whether fixed costs would change as a result of the product sales mix
B)Deciding which product offers the lowest contribution margin per unit
C)Deciding upon any and all constraints associated with the product/sale mix
D)Deciding which products will contribute the highest contribution margin per unit
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Chapter 9: The Master Budget and Responsibility Accounting
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Sample Questions
Q1) What are the cash disbursements in August for June purchases?
A)$ 7,120
B)$27,480
C)$21,360
Q2) What are the cash collections budgeted for June?
A)$172,000
B)$194,400
C)$206,000
D)$114,000
Q3) Which of the following type(s)of companies use a "cost of goods sold,inventory,and purchases" budget?
A)Manufacturing
B)Merchandising
C)Service
D)All of the above
Q4) Responsibility accounting is a system for evaluating the performance of each responsibility center and its manager.
A)True
B)False
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Chapter 10: Flexible Budgets and Standard Costs
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Sample Questions
Q1) A flexible budget variance is the difference between:
A)actual results and amounts in the static budget.
B)amounts in the flexible budget and the actual results.
C)amounts in the flexible budget and the static budget.
D)the budgeted amounts for each level of sales in the flexible budget.
Q2) The Violet Company established a master budget volume of 30,000 units for September.Actual overhead costs incurred amounted to $84,500.Actual production for the month was 32,000 units.The standard variable overhead rate was $2 per direct labor hour.The standard fixed overhead rate was $1 per direct labor hour.One direct labor hour is the standard quantity per finished unit.Assume the allocation base for fixed overhead costs is the number of direct labor hours.
A.Compute the total manufacturing overhead cost variance.
B.Compute the overhead flexible budget variance.
C.Compute the production volume variance.
Q3) The standard for the direct labor rate per hour includes fringe benefits such as health care insurance and vacations.
A)True
B)False
Q4) Identify five benefits of standard costs.
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Chapter 11: Performance Evaluation and the Balanced Scorecard
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Sample Questions
Q1) Small companies tend to use centralized decision making.
A)True
B)False
Q2) What is The Plastic Lumber Company's Outdoor Furniture Division capital turnover?
A)2.0
B)2.5
C)5.0
D)10.5
Q3) Which of the following is the name given to the approach that recognizes that both financial and operational performance measures should be considered when evaluating company performance?
A)The financial and operational approach
B)The total approach
C)The balanced scorecard approach
D)The complete approach
Q4) The sales margin is operating income divided by sales.
A)True
B)False
Page 13
Q5) List and describe reasons why a company might choose to decentralize.
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Chapter 12: Capital Investment Decisions and the Time
Value of Money
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149 Flashcards
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Sample Questions
Q1) Richol Corporation is considering an investment in new equipment costing $180,000.The equipment will be depreciated on a straight-line basis over a five-year life and is expected to generate net cash inflows of $45,000 the first year,$65,000 the second year,and $90,000 every year thereafter until the fifth year.What is the payback period for this investment? The equipment has no residual value.
A)2.00 years
B)2.37 years
C)2.78 years
D)4.00 years
Q2) When evaluating the cash flows from an investment,a reduction in cash outflows is treated as the same as an increase in cash inflows.
A)True
B)False
Q3) When computing the time value of money,the interest rate must always be expressed as an annual rate.
A)True
B)False
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Page 14
Chapter 13: Statement of Cash Flows
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Sample Questions
Q1) The overall total of the uses of cash for Maleenah Corporation for the year was:
A)$13,500.
B)$32,300.
C)$45,800.
D)$38,800.
Q2) Which of the following sections from the statement of cash flows would include the payment of a note payable by issuing common stock?
A)Investing section
B)Financing section
C)Operating section
D)None of the above
Q3) A company uses the indirect method to prepare the statement of cash flows.Which of the following items would be added to net income in determining the net cash flow from operating activities?
A)A decrease in accounts receivable would be added to net income.
B)An increase in inventory would be added to net income.
C)A decrease in accounts payable would be added to net income.
D)An increase in preferred dividends payable would be added to net income.
Q4) List three ways that owners and investors use the statement of cash flows.
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Chapter 14: Financial Statement Analysis
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Sample Questions
Q1) Which company has the better relationship between gross profit and net sales revenue?
A)Impossible to determine
B)Both have the same relationship
C)Johnston
D)Haley
Q2) What would a vertical analysis report with respect to current year selling and general expenses?
A)An increase of $52,8000
B)A decrease of .81.46%
C)18% of net sales revenue
D)440.00% of net sales revenue
Q3) Which of the following is the formula for computing the rate of return on total assets?
A)(Net income + interest expense)/ average total assets
B)Net income / net sales
C)(Net income - preferred dividends)/ number of shares of outstanding common stock
D)(Net income - preferred dividends)/ average common stockholders' equity
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