Accounting for Managers Exam Bank
Course Introduction
Accounting for Managers introduces the fundamental principles and techniques of accounting relevant to managerial decision-making. The course covers key topics such as financial statement analysis, budgeting, cost-volume-profit relationships, and performance evaluation. Emphasis is placed on understanding how accounting information can be used to plan, control, and evaluate business operations, as well as support strategic management. Through practical examples and case studies, students develop the skills necessary to interpret accounting data and apply it effectively in real-world business scenarios, enabling informed decisions that contribute to organizational success.
Recommended Textbook
Horngren's Accounting The Managerial Chapters 10th Edition by Tracie L. Miller Nobles
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9 Chapters
1348 Verified Questions
1348 Flashcards
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Chapter 1: Introduction to Managerial Accounting
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179 Verified Questions
179 Flashcards
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Sample Questions
Q1) The cost of goods sold for Frye Manufacturing in 2015 was $233,000. The January 1, 2015, finished goods inventory balance was $31,600, and the December 31, 2015, finished goods inventory balance was $24,200. Calculate the cost of goods manufactured during 2015.
A) $288,800
B) $233,000
C) $225,600
D) $240,400
Answer: C
Q2) The cost of goods manufactured includes selling expenses, administrative expenses, and manufacturing overhead.
A)True
B)False
Answer: False
Q3) Unlike merchandising companies, income statements of service companies include cost of goods sold as a line item.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Job Order Costing
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152 Verified Questions
152 Flashcards
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Sample Questions
Q1) The journal entry for adjustment of underallocated manufacturing overhead includes a:
A) credit to Finished Goods Inventory.
B) credit to Manufacturing Overhead.
C) debit to Work-in-Process Inventory.
D) credit to Cost of Goods Sold.
Answer: B
Q2) During 2015, a company incurred $500,000 of manufacturing overhead costs and allocated $506,000 of manufacturing overhead costs. At the year-end, the adjustment entry needed to clear the overhead balance to zero will include a debit to Cost of Goods Sold.
A)True
B)False
Answer: False
Q3) Manufacturing Overhead is a temporary account used to accumulate indirect production costs.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Process Costing
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144 Verified Questions
144 Flashcards
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Sample Questions
Q1) A production cost report helps managers identify the unnecessary costs that can be reduced in the production process.
A)True
B)False
Answer: True
Q2) Companies that manufacture identical items through a series of uniform production steps use ________ to determine cost per unit sold.
A) a process costing system
B) a job order costing system
C) the weighted-average method
D) the first-in, first-out method
Answer: A
Q3) The cost of units sold is recorded by debiting Cost of Goods Sold and crediting:
A) Finished Goods Inventory.
B) Sales Revenue.
C) Work-in-Process Inventory.
D) Wages Payable.
Answer: A
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Chapter 4: Cost-Volume-Profit Analysis
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172 Verified Questions
172 Flashcards
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Sample Questions
Q1) Pluto Company sells a product for $80 per unit. Variable costs are $25 per unit and fixed costs are $4,000 per month. Pluto sold 2,000 units in October, 2014. Prepare an income statement for October using the contribution margin format.
Q2) The type of information provided by managerial accounting differs from the information provided by financial accounting.
A)True
B)False
Q3) Variable costing cannot be used for preparing financial reports for external users, such as investors and creditors.
A)True
B)False
Q4) If the volume of activity doubles in the relevant range, total variable costs will also double.
A)True
B)False
Q5) Variable cost per unit is constant throughout various relevant ranges.
A)True
B)False
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Page 6
Chapter 5: Master Budgets
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114 Verified Questions
114 Flashcards
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Sample Questions
Q1) A company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet. While doing so, the cash balance can be taken from:
A) the operational budget.
B) the budgeted income statement.
C) the cash budget.
D) the sales budget.
Q2) A company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet. The balance of Inventory can be taken from:
A) production budget and cost of goods sold budget.
B) the financial budget.
C) the cash budget.
D) the selling and administrative expenses budget.
Q3) Which of the following describes the cash budget?
A) It aids in planning to ensure the company has adequate inventory and cash on hand.
B) It captures the variable and fixed expenses of the business.
C) It depicts the breakdown of sales based on terms of collection.
D) It helps in planning to ensure the business has adequate cash.
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Chapter 6: Flexible Budgets and Standard Cost Systems
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174 Flashcards
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Sample Questions
Q1) Kevin Company prepared the following static budget for the year 2015:
\[\begin{array} { | l | c | r | }
\hline \text { Static Budget } & & \\
\hline \text { Units/volume } & & 5,000 \\
\hline& \text { Per Unit } \\
\hline \text { Sales revenue } & \$ 3.00 & \$ 15,000\\
\hline \text { Variable expenses } & \$ 1.50 & 7,500\\
\hline \text { Contribution margin } && 7,500 \\
\hline \text { Fixed expenses } & & \underline { 4,000 }\\
\hline \text { Operating income/(loss) } & &\underline {\$3,500} \\
\hline
\end{array}\] If a flexible budget was prepared at a volume of 6,000, calculate the amount of operating income.
A) $5,000
B) $3,500
C) $9,000
D) $4,000
Q2) A static budget presents financial data at multiple levels of sales volume.
A)True
B)False
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Page 8
Chapter 7: Cost Allocation and Responsibility Accounting
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130 Flashcards
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Sample Questions
Q1) Which of the following is the most appropriate cost driver for allocating the cost of warranty services?
A) number of employees
B) number of materials purchased
C) number of machine hours
D) number of service calls
Q2) An activity-based costing system is developed in four steps.
a. Compute the allocation rate for each activity
b. Identify activities and estimate their total costs
c. Identify the cost driver for each activity and then estimate the quantity of each driver's allocation base
d. Allocate the indirect costs to the cost object
Which of the following is the correct order of performing these steps?
A) a, b, c, d
B) c, a, b, d
C) b, c, a, d
D) b, a, c, d
Q3) A lag indicator is a performance measure that forecasts future performance.
A)True
B)False
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Chapter 8: Short-Term Business Decisions
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161 Flashcards
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Sample Questions
Q1) A company is planning to replace an old machine with a new one. Which of the following is a sunk cost in this decision?
A) cost of the new machine
B) selling price of the old machine
C) future maintenance costs of the old machine
D) original cost of the old machine
Q2) A company produces 100 microwave ovens per month, each of which includes one electrical circuit. The company currently manufactures the circuit in-house but is considering outsourcing the circuits at a contract price of $28 each. Currently, the cost of producing circuits in-house includes variable costs of $26 per circuit and fixed costs of $5,000 per month.
The controller says that they could outsource production of the circuit, if it reduces fixed cost greater than $200 per month. Is this statement true or false?
A)True
B)False
Q3) Price-setters emphasize a cost-plus pricing approach.
A)True
B)False
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Chapter 9: Capital Investment Decisions
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Sample Questions
Q1) Compound interest assumes that all interest earned will be reinvested at the same rate of interest at which the investment was originally made.
A)True
B)False
Q2) The residual value is discounted as a single lump sum because it will be received only once at the end of life of the asset.
A)True
B)False
Q3) All else being equal, the shorter the investment period, the higher the total amount of interest earned.
A)True
B)False
Q4) The last step in the capital budgeting process is control which compares the actual results with the projected results. These comparisons are known as:
A) cash inflows.
B) post-audits.
C) ranks.
D) cash outflows
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