Accounting for Managers Exam Practice Tests
Course Introduction
Accounting for Managers is designed to equip future business leaders with a comprehensive understanding of financial and managerial accounting principles as they apply to organizational decision-making. The course focuses on interpreting financial statements, analyzing costs, budgeting, and using accounting information for planning, controlling, and evaluating business operations. Emphasis is placed on practical tools and techniques that managers use to assess financial performance, allocate resources efficiently, and develop strategies for long-term success. By building proficiency in key accounting concepts, students gain the skills necessary to make informed decisions that support effective management and organizational objectives.
Recommended Textbook
Managerial Accounting 3rd Canadian Edition by Karen W. Braun
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3096 Verified Questions
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Chapter 1: Introduction to Managerial Accounting
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Sample Questions
Q1) Which reflects a philosophy of providing customers with superior products and services?
A) ERP
B) XBRL
C) TQM
D) IFRS
Answer: C
Q2) Owners of a company are its
A) creditors.
B) customers.
C) managers.
D) shareholders.
Answer: D
Q3) Lean production systems keep large inventories.
A)True
B)False
Answer: False
Q4) Discuss at least four differences between financial accounting and managerial accounting.
Answer: 11ea895a_9460_6ae2_861b_d9f5afb1f84f_TB1238_00
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Chapter 2: Building Blocks of Managerial Accounting
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Sample Questions
Q1) Which of the following statements is correct concerning product costs?
A) Product costs are expensed in the period incurred.
B) Product costs are expensed in the period the related product is sold.
C) Product costs are shown with operating expenses on the income statement.
D) Product costs are shown with current liabilities on the balance sheet.
Answer: B
Q2) What is Montreal's cost of goods manufactured during the year?
A) $268,000
B) $248,000
C) $240,000
D) $238,000
Answer: C
Q3) A company which is in the business of reselling tangible products purchased from suppliers to final users is what type of company?
A) Manufacturing
B) Service company
C) Retailer
D) Wholesaler
Answer: C
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Page 4
Chapter 3: Cost Behaviour
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Sample Questions
Q1) What are three methods used to estimate cost behaviour? What are the advantages and disadvantages of each method?
Answer: 11ea895a_940c_2fdf_861b_89d27bd0efa7_TB1238_00
Q2) Under variable costing, all nonmanufacturing costs are treated as inventoriable product costs.
A)True
B)False Answer: False
Q3) YouCall offers a calling plan that charges $2.00 per month plus $0.05 per minute of call time. Under this plan, what is your monthly cost if you talk for a total of 100 minutes?
A) $7.00
B) $5.00
C) $3.00
D) $2.00
Answer: A
Q4) The equation for a straight line is y = vx + f.
A)True
B)False Answer: True
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Chapter 4: Cost-Volume-Profit Analysis
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Sample Questions
Q1) All else being equal, a company with a high operating leverage will have
A) relatively low fixed costs.
B) relatively high variable costs.
C) a relatively low risk.
D) a relatively high contribution margin ratio.
Q2) The higher the operating leverage factor, the A) greater the impact of volume on operating income.
B) less the impact of volume on operating income.
C) more likely operating income is to stay constant.
D) greater the chance that none of the above occur.
Q3) The contribution margin ratio for Duncan Enterprises is
A) 51.00%.
B) 49.00%.
C) 151.00%.
D) 69.00%.
Q4) Contribution margin less fixed costs yields
A) operating income.
B) sales.
C) variable costs.
D) None of the above
Page 6
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Chapter 5: Job Costing
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Sample Questions
Q1) Which product costing system would better account for a unique product?
A) Job costing system
B) Overhead costing system
C) Process costing system
D) Product costing system
Q2) At Sierra Ceramics what is the total amount of direct materials, direct labour, and manufacturing overhead that should be shown on Job #231's job cost record?
A) $5,470
B) $4,670
C) $800
D) $24,000
Q3) Assigning manufacturing overhead costs and other indirect costs is called
A) cost allocation.
B) cost driver.
C) materials requisition.
D) predetermined manufacturing overhead rate.
Q4) The main driver of indirect costs for service firms is usually labour hours.
A)True
B)False
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Chapter 6: Process Costing
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Sample Questions
Q1) ABC produces ping-pong balls using a three-step sequential process that includes molding, colouring and finishing. When the balls and associated costs are transferred from the molding process to the colouring process, which account is credited?
A) WIP inventory-colouring
B) WIP inventory-molding
C) Raw materials inventory
D) WIP inventory-finishing
Q2) At Adametz Company, what are the equivalent units for conversion costs?
A) 3,750
B) 3,300
C) 5,400
D) 2,100
Q3) In a process system, direct labour and manufacturing overhead are normally
A) incurred at the end of the process.
B) incurred in full at the beginning of the process.
C) incurred evenly throughout the process.
D) not recorded.
Q4) Compare and contrast process costing and job order costing.
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Chapter 7: Activity Based Costing
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Sample Questions
Q1) The movement of parts is considered a value-added activity.
A)True
B)False
Q2) The allocation rate for packaging is
A) $5.28.
B) $6.40.
C) $9.60.
D) $3.00.
Q3) The departmental manufacturing overhead rate for the Small Bag line would be closest to
A) $203.00 per machine hour.
B) $150.00 per machine hour.
C) $193.00 per machine hour.
D) $225.00 per machine hour.
Q4) In ABC it is assumed that it is activities that drive costs, rather than cost objects such as inventory.
A)True
B)False
Q5) What is activity-based management and how can it be used to improve the profitability of a company?
9
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Chapter 8: Short-Term Business Decisions
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Sample Questions
Q1) When a company is a price-setter, it emphasizes a cost-plus approach to pricing.
A)True
B)False
Q2) An example of a constraint for expansion would be the size of the available labour pool.
A)True
B)False
Q3) If Accessibility Products Company drops model F and rents the space formerly used to produce product F for $12,000 per year, what effect will this have on operating income, as compared to the total operating income (loss) if they keep Model F?
A) Increase $3,000
B) Increase $13,000
C) Decrease $13,000
D) Decrease $3,000
Q4) An opportunity cost is a past cost that is given up because an alternative course of action is taken.
A)True
B)False
Q5) What the reasons a firm would adopt target costing?
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Chapter 9: The Master Budget and Responsibility Accounting
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Sample Questions
Q1) Manufacturing, merchandising, and service companies prepare operating expense budgets.
A)True
B)False
Q2) The local McDonald's restaurant which reports revenues and expenses would be a(n)
A) cost centre.
B) investment centre.
C) profit centre.
D) revenue centre.
Q3) What are the total cash collections in June at Three Sisters Catering?
A) $38,000
B) $85,600
C) $96,900
D) $94,400
Q4) The cash budget is prepared after the operating budget.
A)True
B)False
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Q5) List and describe three reasons why a company and its managers could benefit from the use of budgeting.
Chapter 10: Flexible Budgets and Standard Costs
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Sample Questions
Q1) A price variance for production inputs is the difference between the actual unit price of an input and the standard unit price of the input, multiplied by the actual input quantity.
A)True
B)False
Q2) In standard costing, the overhead cost allocated to work in process inventory is computed at the standard predetermined overhead rate times the actual quantity of the allocation base used in production.
A)True
B)False
Q3) The Payne Corporation's actual output for a period was assigned the standard labour cost of $25,500. If the company had an unfavourable direct labour price variance of $1,800 and a favourable direct labour efficiency variance of $750, what was the total actual cost of direct labour incurred during the period?
Q4) What is the direct labour efficiency variance at Dazzle Toy Company?
A) $18,000 favourable
B) $9,000 favourable
C) $18,000 unfavourable
D) $9,000 unfavourable
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Chapter 11: Performance Evaluation and the Balanced Scorecard
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Sample Questions
Q1) The profit margin is operating income divided by sales.
A)True
B)False
Q2) What is the Beverage Division's Return on Investment (ROI)?
A) 250.00%
B) 50.00%
C) 20.00%
D) 8.57%
Q3) The convenience store owned by a national chain is likely to be classified as a(n)
A) cost centre.
B) investment centre.
C) profit centre.
D) revenue centre.
Q4) What is The Plastic Lumber Company's Outdoor Furniture Division residual income?
A) $126,000
B) $294,000
C) $315,000
D) $396,000
Page 13
Q5) Describe the limitations of financial performance measurement.
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Chapter 12: Capital Investment Decisions and the Time
Value of Money
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Sample Questions
Q1) Annet wants to take the next five years off work to travel around the world. She estimates her annual cash needs at $40,000 (if she needs more, she'll work odd jobs). Annet believes she can invest her savings at 10% until she depletes her funds. How much money does Annet need now to fund her travels?
Q2) Rinky Dink Family Fun Centre bought new bumper boats for its recreation facility. The useful life is 6 years. The bumper boats had a total cost $5,338 and will generate $1,570 total cash inflows each year for the life of the boats. The residual value of the bumper boats is $650. The payback period in years is closest to A) 2.40.
B) 2.99.
C) 3.40.
D) 3.81.
Q3) The payback method can only be used when the net cash inflows from a capital investment are the same for each period.
A)True
B)False
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Page 14