Accounting for Managers Exam Practice Tests
Course Introduction
Accounting for Managers introduces the fundamental concepts and techniques of accounting tailored for managerial decision-making. The course explores the preparation and interpretation of financial statements, cost analysis, budgeting, performance evaluation, and the use of accounting data in planning and controlling business operations. Emphasis is placed on equipping future managers with practical tools to analyze financial information, understand its implications for organizational strategy, and make informed decisions that align with organizational objectives.
Recommended Textbook
Managerial Accounting v. 2.1 by Kurt Heisinger and Joe Hoyle
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13 Chapters
876 Verified Questions
876 Flashcards
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2
Chapter 1: What Is Managerial Accounting
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75 Verified Questions
75 Flashcards
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Sample Questions
Q1) A managerial accountant is most likely to prepare all of the following reports except:
A)a weekly report on the percent of products returned by customers.
B)a budgeted income statement for next quarter.
C)a balance sheet in accordance with U.S.GAAP.
D)a report showing the percentage of on-time deliveries.
E)None of the above.
Answer: C
Q2) All of the following would be best classified as manufacturing overhead except:
A)depreciation for production building.
B)salaries for production supervisors.
C)cost of direct labor related to production.
D)cost of indirect materials.
E)None of the above.
Answer: C
Q3) Distinguishing between period and product costs can be done quickly and easily.
A)True
B)False
Answer: False
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3
Chapter 2: How Is Job Costing Used to Track Production Costs
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44 Verified Questions
44 Flashcards
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Sample Questions
Q1) All of the following are examples of firms who would use process costing except:
A)A chewing gum manufacturer.
B)An ice cream manufacturer.
C)An oil refinery.
D)A plumbing contractor.
E)None of the answer choices is correct.
Answer: D
Q2) When using a job cost system,which of the following will not appear on a job cost sheet?
A)Direct labor.
B)Direct materials.
C)Actual manufacturing overhead incurred.
D)Manufacturing overhead applied.
E)None of the answer choices is correct.
Answer: C
Q3) When direct materials are transferred into production,the journal entry includes a debit to the Work in Process Inventory account.
A)True
B)False
Answer: True
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Chapter 3: How Does an Organization Use Activity-Based
Costing to Allocate Overhead Costs
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70 Verified Questions
70 Flashcards
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Sample Questions
Q1) Appraisal costs are the same as detection costs.
A)True
B)False Answer: True
Q2) Refer to Exhibit 3-2.What is the overhead rate for the processing activity?
A)$8.00
B)$3.60
C)$18.00
D)$6.00
E)None of the answer choices is correct.
Answer: B
Q3) Value-added activities are typically ignored when using activity-based management.
A)True
B)False Answer: False
Q4) Prevention costs are costs for activities that prevent product defects.
A)True
B)False Answer: True
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Chapter 4: How Is Process Costing Used to Track
Production Costs
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58 Verified Questions
58 Flashcards
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Sample Questions
Q1) Process costing is typically used by service companies that have one department. A)True
B)False
Q2) Two important double-checks included in a production cost report are: (1)units to be accounted for matches units accounted for and (2)total costs to be accounted for matches total costs accounted for.
A)True
B)False
Q3) Refer to Exhibit 4-2.What is the cost per gallon for the mixing process?
A)$5.88
B)$0.50
C)$0.48
D)$0.54
E)None of the answer choices is correct.
Q4) Both process costing and job costing typically include three product costs direct materials,direct labor,and manufacturing overhead.
A)True
B)False
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Chapter 5: How Do Organizations Identify Cost Behavior
Patterns
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68 Verified Questions
68 Flashcards
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Sample Questions
Q1) Variable costs such as direct labor and direct materials typically stay constant on a per unit basis.
A)True
B)False
Q2) Refer to Exhibit 5-5.What is Tyler's cost equation used to estimate total monthly costs?
A)Y = $3,000 + $1.25X
B)Y = $3,000 - $1.25X
C)Y = $3,000 / $1.25X
D)Y = $3,000 + $1.25 + 5,000X
E)None of the answer choices is correct.
Q3) Which of the following costs is typically not a fixed overhead cost for a factory?
A)Salaries of factory supervisors.
B)Rent on the factory building.
C)Property taxes on the factory building.
D)Indirect materials used in production.
E)None of the answer choices is correct.
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Chapter 6: How Is Cost-Volume-Profit Analysis Used for Decision Making
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79 Flashcards
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Sample Questions
Q1) Firms with low operating leverage tend to make more from increasing sales than similar firms with high operating leverage.
A)True
B)False
Q2) The contribution margin per unit is the amount each unit sold contributes to covering fixed costs and increasing profit.
A)True
B)False
Q3) Refer to Exhibit 6-2.What would be the operating profit if the unit variable cost decreases 20 percent?
A)$75,000
B)$275,000
C)$100,000
D)$120,000
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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76 Flashcards
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Sample Questions
Q1) Refer to Exhibit 7-5.What is the amount of allocated fixed costs to be assigned to Customer Z?
A)$580,000
B)$420,000
C)$400,000
D)$600,000
E)None of the answer choices is correct.
Q2) In which of the following cases is a customer most likely to be dropped?
A)When the customer's variable costs are more than its total fixed costs.
B)When the customer's avoidable fixed costs are more than its contribution margin.
C)When the customer's total fixed costs are more than its contribution margin.
D)When the customer's contribution margin is more than its avoidable fixed costs.
E)None of the answer choices is correct.
Q3) When deciding between alternatives,only those revenues and costs that differ from one alternative to another are relevant.
A)True
B)False
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Page 9
Chapter 8: How Is Capital Budgeting Used to Make Decisions
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72 Flashcards
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Sample Questions
Q1) When evaluating long-term investment proposals,firms that pay income taxes can ignore the impact these taxes have on cash flows.
A)True
B)False
Q2) Which of the following statements is true regarding the time value of money concept?
A)A dollar received today is worth the same as a dollar received in the future.
B)A dollar received today is worth more than a dollar received in the future.
C)A dollar received today is worth less than a dollar received in the future.
D)A dollar paid today is worth the same as a dollar paid in the future.
E)None of the answer choices is correct.
Q3) All of the following are qualitative factors to be considered when evaluating investments except:
A)providing new product lines to draw customers to other,more profitable product lines.
B)minimizing taxes.
C)maintaining a reputation as the industry leader in innovation.
D)considering the social benefits of investing in pollution control devices.
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) Conflicts rarely exist between the planning and control phases of budgeting.
A)True
B)False
Q2) The budgeted balance sheet shows an estimate of the organization's profit for a given budget period.
A)True
B)False
Q3) Organizations use budgets to control operations,because budgets provide a means to evaluate employee and company performance.
A)True
B)False
Q4) All of the following appear on the manufacturing overhead budget except:
A)total fixed overhead costs.
B)indirect materials cost per unit.
C)indirect labor cost per unit.
D)direct labor rate per hour.
E)None of the answer choices is correct.
Q5) The usual starting point in budgeting is the sales budget. A)True
B)False
11
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Chapter 10: How Do Managers Evaluate Performance Using Cost Variance Analysis
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69 Verified Questions
69 Flashcards
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Sample Questions
Q1) A favorable materials price variance may be caused by:
A)A reduction in suppliers causing an unexpected increase in price.
B)Higher quality materials purchased at a higher cost resulting in fewer materials being used than expected.
C)Highly skilled employees using fewer materials than expected.
D)Low quality materials purchased at a lower cost than expected.
E)None of the answer choices is correct.
Q2) The variable overhead efficiency variance is the difference between the actual hours worked at the actual rate and the standard hours worked at standard rate.
A)True
B)False
Q3) Which of the following could be indicated by the fixed overhead production volume variance?
A)Labor rates were lower than expected.
B)A higher mix of unskilled workers were utilized.
C)Raw materials were of lower quality than expected.
D)The quantity of units produced was different than expected.
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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63 Verified Questions
63 Flashcards
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Sample
Questions
Q1) Refer to Exhibit 11-1.Using the segmented income statements,what is the profit margin ratio for the Trikes Division (to the nearest tenth of a percent)?
A)47%
B)53%
C)9.6%
D)16.0%
E)None of the answer choices is correct.
Q2) If decisions within a company are made by top management at headquarters,which of the following terms best describes this company?
A)cost center.
B)decentralized organization.
C)centralized organization.
D)investment center.
E)None of the answer choices is correct.
Q3) Most organizations use only residual income for performance measurement because of the weaknesses associated with using return on investment (ROI).
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) Refer to Exhibit 12-2.Which of these items would appear in the financing activities section of the statement of cash flows?
A)1 & 6
B)2 & 3
C)1 & 5
D)4 & 6
E)None of the answer choices is correct.
Q2) Where would cash payments for insurance appear in the statement of cash flows?
A)Operating activities section.
B)Financing activities section.
C)Investing activities section.
D)Capital activities section.
E)None of the answer choices is correct.
Q3) Cash payments to reduce long-term debt are included in the operating activities section of the statement of cash flows.
A)True
B)False
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Page 14
Chapter 13: How Do Managers Use Financial and
Nonfinancial Performance Measures
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Sample Questions
Q1) Which of the following is the best reason to use a common-size analysis?
A)To change financial information in different currencies into a common currency.
B)To evaluate a company relative to its competitors.
C)To calculate trend percentages.
D)To assess nonfinancial measures of performance.
E)None of the answer choices is correct.
Q2) During 2017,Victory Inc.had beginning accounts receivable of $42,000 and ending accounts receivable of $48,000.Its net sales of $450,000 are composed of 20% cash sales and 80% credit sales.Based on this information,what is Victory's receivables turnover ratio?
A)7.5 times
B)8.0 times
C)10.0 times
D)2.0 times
E)None of the answer choices is correct.
Q3) In general,managers prefer the profit margin ratio to decrease over time.
A)True
B)False
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