Accounting for Managers Final Exam
Course Introduction
Accounting for Managers introduces the fundamental concepts and techniques of financial and managerial accounting with a focus on their application in business decision-making. The course covers key topics such as interpreting financial statements, cost analysis, budgeting, performance evaluation, and financial planning. Emphasis is placed on using accounting information to analyze organizational performance, control operations, and make strategic decisions. Designed for non-accounting majors, the course equips future managers with the essential skills to understand financial data, communicate effectively with accounting professionals, and contribute to effective resource management within their organizations.
Recommended Textbook
Introduction to Managerial Accounting 4th Canadian Edition by Peter C. Brewer
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Chapter 1: An Introduction to Managerial Accounting and Cost Concepts
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Sample Questions
Q1) Many Canadian organizations have successfully implemented quality management principles and have received recognition from Excellence Canada (formerly the National Quality Institute)whose mission is to inspire excellence in Canada.
A)True
B)False
Answer: True
Q2) Explain the importance of ethical responsibility and explain the need for ethical codes of conduct.
Answer: Unethical behaviour is often the result of top executives focusing exclusively on short-term profits at any cost.As businesses interact more and more,being ethically responsible is extremely important.Many organizations have implemented ethical codes of conduct to guide behaviour.
Q3) Process reengineering is usually strongly accepted by all employees within an organization.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Systems Design: Job-Order Costing
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Sample Questions
Q1) The cost of goods manufactured was:
A) $1,150.
B) $1,180.
C) $1,220.
D) $1,250.
Answer: A
Q2) The term differential cost refers to:
A) a difference in cost between any two alternatives.
B) the potential benefit forgone by selecting one alternative instead of another.
C) a cost which does not entail any dollar outlay but which is relevant to the decision-making process.
D) a cost which continues to be incurred even though there is no activity.
Answer: A
Q3) Each of the following would be a period cost except:
A) the salary of the company president's secretary.
B) the cost of a general accounting office.
C) depreciation of a machine used in manufacturing.
D) sales commissions.
Answer: C
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Page 4
Chapter 3: Systems Design: Activity-Based Costing
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Q1) The planning horizons for committed fixed costs and discretionary fixed costs are generally the same.
A)True
B)False
Answer: False
Q2) The best estimate of the variable cost per unit for Maxwell Company is?
A) $0.56.
B) $1.79.
C) $1.95.
D) $2.00.
Answer: B
Q3) A cost that has both the characteristics of fixed cost and variable cost is known as a?
A) mixed cost.
B) variable fixed cost.
C) sunk cost.
D) discretionary cost.
Answer: A
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Chapter 4: Systems Design: Process Costing
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Q1) Hussain Shop uses a job-order costing system.Overhead is applied to jobs based on direct labour hours.The source document that would give the number of direct labour hours worked on Job 256 is the:
A) material requisition form.
B) labour time sheet.
C) machine hours usage ticket.
D) Job-order cost sheet.
Q2) During March total debits to Work in Process were:
A) $84,000.
B) $144,000.
C) $224,000.
D) $230,000.
Q3) The Cost of Goods Manufactured for March was:
A) $212,000.
B) $218,000.
C) $230,000.
D) $236,000.
Q4) In a normal costing system actual overhead costs are allocated to jobs.
A)True
B)False
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Chapter 5: Cost Behavior: Analysis and Use
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Q1) Assuming that the company uses the weighted-average cost method,what is the cost per equivalent unit for material costs for the month in the Blending Department? (Round your answer to the nearest cent)
A) $1.09.
B) $1.18.
C) $1.22.
D) $1.25.
Q2) Valley Manufacturing Company's beginning work in process inventory consisted of 10,000 units,100% complete with respect to materials cost and 40% complete with respect to conversion costs.The total cost in the beginning inventory was $30,000.During the month,50,000 units were transferred out.The equivalent unit cost was computed to be $2.00 for materials and $3.70 for conversion costs under the weighted-average method.Given this information,the total cost of the units completed and transferred out was?
A) $240,000.
B) $255,000.
C) $270,000.
D) $285,000.
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Chapter 6: Cost-Volume-Profit Relationships
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Sample Questions
Q1) Setting up equipment is an example of a:
A) unit-level activity.
B) batch-level activity.
C) product-level activity.
D) facility-level activity.
Q2) The debits to the Manufacturing Overhead control account during the year (prior to closing out the balance)would have totalled:
A) $3,064,400.
B) $3,076,500.
C) $3,097,400.
D) $3,130,400.
Q3) The activity rate computed at the beginning of the year for the batch setup activity cost pool is closest to:
A) $64.80.
B) $86.40.
C) $109.70.
D) $259.20.
Q4) If direct labour hours are used to assign total overhead costs,what is the application rate?
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Chapter 7: Profit Planning
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Sample Questions
Q1) Tilson Company has projected sales and production in units for the second quarter of the coming year as follows:
Q2) The total number of units to be produced in July is:
A) 6,920.
B) 7,100.
C) 7,280.
D) 7,630.
Q3) The total cash collected by LaGrange Company during January would be:
A) $254,000.
B) $331,500.
C) $344,000.
D) $410,000.
Q4) The repayment (including interest)of financing during the second quarter (item d in thousands)is:
A) $0.
B) $4.
C) $7.
D) $17.
Q5) A sales budget is given below for one of the products manufactured by the Key Co.:
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Chapter 8: Standard Costs
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Sample Questions
Q1) The break-even point in sales dollars is:
A) $240,000.
B) $408,000.
C) $560,000.
D) $728,000.
Q2) How many photo-prints did the division have to sell to break even?
A) 60,000 photo-prints.
B) 90,000 photo-prints.
C) 120,000 photo-prints.
D) 180,000 photo-prints.
Q3) The operating leverage is:
A) 0.33.
B) 3.00.
C) 5.00.
D) 8.00.
Q4) Break-even analysis assumes which of the following to be true?
A) Total costs are unchanged.
B) Unit variable expenses are unchanged.
C) Variable expenses are nonlinear.
D) Unit fixed expenses are unchanged.
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Chapter 9: Flexible Budgets and Overhead Analysis
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Sample Questions
Q1) Managers should pay little attention to bottleneck operations since they have limited capacity for producing output.
A)True
B)False
Q2) Lusk Company produces and sells 15,000 units of Product A each month.The selling price of Product A is $20 per unit,and variable expenses are $14 per unit.A study has been made concerning whether Product A should be discontinued.The study shows that $70,000 of the $100,000 in fixed expenses charged to Product A would continue even if the product were discontinued.These data indicate that if Product A is discontinued,the company's overall net operating income would:
A) increase by $10,000 per month.
B) decrease by $20,000 per month.
C) increase by $20,000 per month.
D) decrease by $60,000 per month.
Q3) Future costs that do not differ among the alternatives are not relevant in a decision.
A)True
B)False
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Chapter 10: Decentralization
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Sample Questions
Q1) The simple rate of return for the new machine is closest to:
A) 20.0%.
B) 27.5%.
C) 37.5%.
D) 80.0%.
Q2) In comparing two investment alternatives,the difference between the net present values of the two alternatives obtained using the total cost approach will be the same as the net present value obtained using the incremental cost approach.
A)True
B)False
Q3) How can the internal rate of return of a project be determined?
A) By finding the discount rate that yields a net present value of zero.
B) By determining that the project cash flows are equal each year.
C) By determining that the project profitability index is greater than one.
D) By some other method than listed above.
Q4) The payback period is:
A) 2.50 years.
B) 2.75 years.
C) 3.00 years.
D) 5.00 years.
Page 12
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Chapter 11: Relevant Costs for Decision Making
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Sample Questions
Q1) The direct labour rate variance for March is:
A) $8,000 favourable.
B) $8,000 unfavourable.
C) $48,000 unfavourable.
D) $48,000 favourable.
Q2) If the actual labour hours worked exceed the standard labour hours allowed,what type of variance will occur?
A) Favourable labour efficiency variance.
B) Favourable labour rate variance.
C) Unfavourable labour efficiency variance.
D) Unfavourable labour rate variance.
Q3) The Moore Company produces and sells a single product.A standard cost card for the product follows:
Q4) In a standard costing system,under-applied or over-applied fixed overhead is equal to the sum of the fixed overhead budget variance and the fixed overhead volume variance.
A)True
B)False
Q5) The following overhead data are for a department in a large company.
Q6) The following labour standards have been established for a particular product:
Page 13
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Chapter 12: Capital Budgeting Decisions
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Sample Questions
Q1) A company's return on investment is the:
A) margin divided by turnover.
B) margin multiplied by turnover.
C) turnover divided by average operating assets.
D) turnover multiplied by average operating assets.
Q2) Emiley Inc. ,newly incorporated on January 2,earned $100,000 in net operating income in its first year of operations which ended December 31.Operating assets,which increased evenly throughout the year,totalled $200,000 at year end.ROI for the year was?
A) 0%.
B) 50%.
C) 100%.
D) 200%.
Q3) Largo Company recorded for the past year,sales of $750,000 and had average operating assets of $375,000.What is the margin that Largo Company needed to earn in order to achieve an ROI of 15%?
A) 2.00%.
B) 7.50%.
C) 9.99%.
D) 15.00%.
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Chapter 13: How Well Am I Doing Statement of Cash Flows
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Sample Questions
Q1) Last year Jackson Company had a net income of $160,000,income tax expense of $66,000,and interest expense of $20,000.The company's times interest earned was closest to:
A) 3.70 times.
B) 8.00 times.
C) 9.00 times.
D) 12.30 times.
Q2) Larosa Company's earnings per share of common stock for 20 × 6 were closest to:
A) $3.09.
B) $9.41.
C) $9.86.
D) $14.09.
Q3) Calculate the average collection period for 20 × 4
Q4) Calculate the gross margin percentage for 20 × 4.
Q5) Calculate the return on total assets for 20 × 4
Q6) What is the company's acid test (quick)ratio?
A) 0.68.
B) 1.68.
C) 2.14.
D) 2.31.
Page 15
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Chapter 14: How Well Am I Doing Financial Statement Analysis
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Q1) Regardless of the basis of accounting used,dividends will always be reported as a use of cash in the financing activities section of the cash flow statement.
A)True
B)False
Q2) If an entity receives cash from the issuance of long-term debt during a year and also pays out cash to reduce a long-term debt,both a cash inflow and a cash outflow will be reported in the financing activities section of the cash flow statement.
A)True
B)False
Q3) Using the indirect method,the operating activities section of the cash flow statement is constructed starting with net income and adjusting it to a cash basis.
A)True
B)False
Q4) A decrease in a liability will be reported as a use of cash on the cash flow statement. A)True
B)False
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