Accounting for Managers Practice Exam
Course Introduction
Accounting for Managers provides a comprehensive introduction to fundamental accounting principles, emphasizing their practical application in managerial decision-making. The course covers key topics such as financial statement analysis, budgeting, cost-volume-profit analysis, and performance measurement. It equips students with the tools to interpret financial information, evaluate business performance, and make informed strategic decisions. Through real-world examples and case studies, students learn how accounting data supports planning, control, and operational strategies within diverse organizational contexts.
Recommended Textbook
Managerial Accounting 3rd Canadian Edition by Karen W. Braun
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12 Chapters
3096 Verified Questions
3096 Flashcards
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Page 2
Chapter 1: Introduction to Managerial Accounting
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201 Flashcards
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Sample Questions
Q1) The cost of fixing defective units found during the quality inspections would be classified as a(n)
A) prevention cost.
B) appraisal cost.
C) internal failure cost.
D) external failure cost.
Answer: C
Q2) Which of following is TRUE?
A) Management accounting focuses on historical transactions.
B) Financial accounting uses the cash basis for recording transactions.
C) Financial accounting focuses on future data.
D) Management accounting focuses on relevant data.
Answer: D
Q3) The primary goal of managerial accounting is to provide information to A) shareholders.
B) creditors.
C) internal decision-makers.
D) both shareholders and creditors.
Answer: C
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Page 3
Chapter 2: Building Blocks of Managerial Accounting
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265 Flashcards
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Sample Questions
Q1) When do inventoriable costs become expenses?
A) When direct materials are purchased
B) When the manufacturing process begins
C) When the manufacturing process is completed
D) When the product is sold
Answer: D
Q2) What is Frazer's cost of goods sold?
A) $520,000
B) $464,000
C) $440,000
D) $400,000
Answer: A
Q3) Variable costs
A) are fixed in total as production levels change.
B) are fixed per unit and vary in total as productions levels change.
C) decrease per unit as production volume increases.
D) vary per unit of output as production levels change.
Answer: B
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4
Chapter 3: Cost Behaviour
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Sample Questions
Q1) The variable cost per snow cone using the high-low method is
A) $1.67.
B) $0.73.
C) $0.77.
D) $0.60.
Answer: D
Q2) What is the estimated cost of water at the car wash if 1,700 cars are expected to be washed?
A) $6,500
B) $4,900
C) $5,750
D) $5,550
Answer: D
Q3) 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
Q4) Mixed costs are part variable and part fixed.
A)True
B)False
Answer: True
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Chapter 4: Cost-Volume-Profit Analysis
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Sample Questions
Q1) The break-even sales volume in units for Warm Hands is A) 8,125.
B) 7,313.
C) 24,375.
D) 9,750.
Q2) What is meant by the term break-even point? Why should a manager be concerned about the break-even point?
Q3) The break-even point can either be calculated in terms of number of units or in terms of sales revenue.
A)True
B)False
Q4) If the sale price per unit is $30.00, the variable expense per unit is $21, and total fixed expenses are $300,000, what are the break-even sales in dollars?
A) $10,000
B) $1,000,000
C) $90,000
D) $176,471
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Chapter 5: Job Costing
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Sample Questions
Q1) What is the total manufacturing overhead cost for Job No. 650?
A) $72,500
B) $89,600
C) $59,731
D) $78,520
Q2) At Jenquay Corporation the journal entry to close manufacturing overhead would include a
A) credit to Manufacturing Overhead for $31,500.
B) debit to Work in Process Inventory for $31,500.
C) credit to Work in Process Inventory for $31,500.
D) credit to Cost of Goods Sold for $31,500.
Q3) Overallocated manufacturing overhead results when
A) production is less than last year.
B) actual overhead is less than allocated overhead.
C) estimated overhead is less than actual overhead.
D) actual overhead is less than expected.
Q4) The overhead allocation base should be the cost driver of manufacturing overhead costs.
A)True
B)False
Page 7
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Chapter 6: Process Costing
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Sample Questions
Q1) What are the two basic types of product costing systems?
A) Department and plant
B) FIFO and weighted-average
C) Job and process
D) Variable and process
Q2) Second or subsequent departments must account for units and costs transferred in from previous departments.
A)True
B)False
Q3) The journal entry to record the use of direct materials in Processing Department #1 would include a credit to Raw Materials inventory.
A)True
B)False
Q4) The last step of the 5-step process costing procedure is to assign total costs to units completed and to units in ending WIP inventory.
A)True
B)False
Q5) 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) Which of the following condition(s) favours using departmental overhead rates in place of a plantwide overhead rate?
A) Manufacturing overhead represents a small proportion of total cost.
B) Different jobs or products use the departments to a different extent.
C) Departments use a similar amount of indirect costs.
D) Products spend the same amount of time in each department.
Q2) The goal of value-engineering is to eliminate all waste in the system by making the company's processes as effective and efficient as possible.
A)True
B)False
Q3) Cost versus benefit should be a criterion when evaluating the implementation of an activity-based cost system.
A)True
B)False
Q4) What is the cost of machining per cuckoo clock?
A) $5.00
B) $3.00
C) $10.50
D) $25.00
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Chapter 8: Short-Term Business Decisions
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Sample Questions
Q1) Fixed costs that continue to exist even after a product line is dropped are called A) avoidable fixed costs.
B) unavoidable fixed costs.
C) variable fixed costs.
D) relevant fixed costs.
Q2) Companies with production constraints and irrelevant fixed costs will be most profitable when they maximize production of the product with the highest A) sales price.
B) demand for the product.
C) contribution margin per unit.
D) contribution margin per unit of the constraint.
Q3) A sunk cost is a past cost that cannot be changed regardless of which future action is taken.
A)True
B)False
Q4) Qualitative factors play an important part in make or buy decisions.
A)True
B)False
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Chapter 9: The Master Budget and Responsibility Accounting
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Sample Questions
Q1) One of the key benefits of budgeting is that it forces managers to plan.
A)True
B)False
Q2) Budgeting includes planning for ending inventory.
A)True
B)False
Q3) Managers are motivated when obtaining budgeted targets are nearly impossible to achieve.
A)True
B)False
Q4) The format of the "cost of goods sold, inventory, and purchases" budget is as follows:
A) cost of goods sold + desired ending inventory - beginning inventory.
B) desired ending inventory + beginning inventory - cost of goods sold.
C) cost of goods sold - desired ending inventory + beginning inventory. D) desired ending inventory - beginning inventory - cost of goods sold.
Q5) A company's plan for purchases of property, plant, equipment, and other long-term assets is part of the budgeted balance sheet.
A)True
B)False
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Chapter 10: Flexible Budgets and Standard Costs
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Sample Questions
Q1) A static budget is a budget prepared for multiple volume levels.
A)True
B)False
Q2) Which term below is best paired with "a summarized budget than can easily be computed for several volume levels"?
A) Sales volume variance
B) Flexible budget
C) Benchmarking
D) Overhead flexible budget variance
Q3) What is the actual direct material quantity used per batch for Brownies at YumYum Corporation?
A) 4.0 kg
B) 2.0 kg
C) 0.5 kg
D) 3.0 kg
Q4) What is the Kid Adventures Company's sales volume variance for operating income?
A) $17,700 unfavourable
B) $76,400 unfavourable
C) $17,700 favourable
D) $76,400 favourable
Page 12
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Chapter 11: Performance Evaluation and the Balanced Scorecard
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Sample Questions
Q1) Customer satisfaction ratings would be an example of the A) financial perspective.
B) customer perspective.
C) internal business perspective.
D) learning and growth perspective.
Q2) Which of the following aspects of a performance evaluation system best describes when targets are compared to actual results?
A) Communicating company's expectations
B) Motivating managers
C) Promoting goal congruence
D) Providing feedback
Q3) Which of the following goals of a performance evaluation system is accomplished when bonuses are provided to subunit managers who achieve performance targets?
A) Benchmarking
B) Motivating unit managers
C) Promoting goal congruence
D) Communicating expectations
Q4) List and describe five reasons why a company might choose to decentralize.
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) When evaluating the cash flows from an investment, a reduction in cash flows is also considered.
A)True
B)False
Q2) What is the name given to choosing among different alternative investments due to limited resources?
A) Capital rationing
B) Capital investing
C) Resource rationing
D) Resource allocation
Q3) Brackett Corporation is adding a new product line that will require an investment of $120,000. The product line is estimated to generate cash inflows of $25,000 the first year, $23,000 the second year, and $18,000 each year thereafter for ten more years. What is the payback period?
A) 4.80 years
B) 6.00 years
C) 6.32 years
D) 6.67 years
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