Accounting for Managers Review Questions
Course Introduction
Accounting for Managers provides an essential introduction to the principles and practices of accounting from a managerial perspective. This course equips students with the ability to interpret financial statements, analyze financial information, and apply accounting data to decision-making processes. Topics include cost behavior, budgeting, performance evaluation, and the use of accounting information in planning and controlling organizational activities. By the end of the course, students will be capable of using accounting tools and techniques to support effective management decisions within various business environments.
Recommended Textbook
Cornerstones of Managerial Accounting 5th Edition by
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16 Chapters
2824 Verified Questions
2824 Flashcards
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Maryanne M. Mowen
Page 2
Chapter 1: Introduction to Managerial Accounting
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64 Verified Questions
64 Flashcards
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Sample Questions
Q1) _________ is a crucial element in all phases of the value chain.
Answer: Time
Q2) Managerial accounting reports are prepared
A) according to GAAP guidelines.
B) to meet the needs of decision makers within the firm.
C) for external users.
D) all of these are correct
Answer: B
Q3) Excellent customer service is an example of a value-added activity.
A)True
B)False
Answer: True
Q4) Accountants that have a Certificate in Public Accounting (CPA):
A) are the only accountants permitted to serve as external auditors.
B) must pass a national examination and be licensed by the state in which they practice. C) may be held responsible to provide assurance concerning the reliability of a firm's financial statements.
D) all of these statements are true.
Answer: D
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Chapter 2: Basic Managerial Accounting Concepts
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247 Flashcards
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Sample Questions
Q1) Describe the purpose of the three inventory accounts used by a manufacturer.
Answer: The materials inventory is used to keep track of materials that have not yet been used in production. The work in process inventory is used to account for the costs of goods that were partially completed at the end of the accounting period and is used to accumulate current production costs. The finished goods inventory is used to account for the cost of goods that were finished at the end of the current period but have not yet been sold.
Q2) Expired costs are called ____________.
Answer: expenses
Q3) Period costs
A) are selling costs and administrative costs.
B) are used to compute product cost.
C) can be included in overhead costs.
D) are carried in inventory until the goods are sold.
Answer: A
Q4) Fast food restaurant
A)Tangible
B)Intangible
Answer: A
Page 4
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Chapter 3: Cost Behavior
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237 Verified Questions
237 Flashcards
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Sample Questions
Q1) A factor that causes or leads to a change in a cost or activity is a(n)
A) cost formula.
B) step cost.
C) mixed cost.
D) driver.
Answer: D
Q2) salary of receptionist
A)discretionary
B)committed
Answer: B
Q3) Refer to Figure 3-1. In the cost formula above which element would be the dependent variable?
A) variable rate
B) fixed cost
C) total cost
D) output
Answer: C
Q4) Graphically, the ______________ is the point at which the cost line intercepts the cost (vertical) axis.
Answer: intercept
Page 5
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Chapter 4: Cost-Volume-Profit Analysis: a Managerial Planning Tool
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179 Flashcards
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Sample Questions
Q1) Firm X and Firm Y are competitors within the same industry. Firm X produces its product using large amounts of direct labor. Firm Y has replaced direct labor with investment in machinery. Projected sales for both firms are 15% less than in the prior year. Which statement regarding projected profits is true?
A) Firm X will lose more profit than Firm Y.
B) Firm Y will lose more profit than Firm X.
C) Firm X and Firm Y will lose the same amount of profit.
D) Neither Firm X nor Firm Y will lose profit.
Q2) Refer to Figure 4-3. What is the contribution margin ratio?
A) 36%
B) 40%
C) 50%
D) 60%
E) 44%
Q3) The difference between sales and variable expenses is called the
Q4) Fixed costs that are not traceable to the segments and would remain even if one of the segments was eliminated are known as _____________________________.
Page 6
Q5) The ________________________ is the point where total revenue equals total cost.
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Chapter 5: Job-Order Costing
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196 Flashcards
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Sample Questions
Q1) Which of the following is true about the job-order cost sheet?
A) It is prepared for every job.
B) It is subsidiary to the work-in-process account.
C) It is the primary document for accumulating all costs related to a particular job.
D) It contains all information pertinent to a job.
E) All of these are correct.
Q2) ________________________ are directly responsible for creating the products or services sold to customers.
Q3) A costing system in which costs are collected and assigned to units of production for each individual job
A)actual cost system
B)job-order costing system
C)normal cost system
D)process-costing system
Q4) The ___________________________ is calculated at the beginning of the year by dividing the total estimated annual overhead by the total estimated level of cost driver.
Q5) In a _______________________________ costs are accumulated by job.
Q6) What are the three steps of overhead application?
Page 7
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Chapter 6: Process Costing
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177 Flashcards
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Sample Questions
Q1) Costing system used by an architectural firm.
A)Process Costing
B)Job Order Costing
Q2) A production report provides information about the physical units processed in a department and also about the manufacturing costs associated with them.
A)True
B)False
Q3) Costing system used by a chemical manufacturer.
A)Process Costing
B)Job Order Costing
Q4) The _______________________ is the document that summarizes the manufacturing activity that takes place in a process department for a given period of time.
Q5) The costs transferred from a prior process to a subsequent process are referred to as transferred-in costs.
A)True
B)False
Q6) _________________________ are costs transferred from a prior process to a subsequent process.
Page 8
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Chapter 7: Activity-Based Costing and Management
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178 Verified Questions
178 Flashcards
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Sample Questions
Q1) Increases the efficiency of necessary activities by using economies of scale.
A)cycle time
B)direct tracing
C)activity sharing
D)driver tracing
E)value-added activities
F)activity selection
Q2) Costs incurred to prevent poor quality in the products or services being produced are
A) prevention costs.
B) appraisal costs.
C) internal failure costs.
D) external failure costs.
E) a different category of quality-related costs.
Q3) Refer to Figure 7-2. Calculate the activity rate for selling goods.
A) $3,625 per sales call
B) $3,550 per sales call
C) $2,200 per sales call
D) $4,800 per sales call
E) $9,400 per sales call
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Chapter 8: Absorption and Variable Costing, and Inventory Management
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124 Verified Questions
124 Flashcards
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Sample Questions
Q1) Refer to Figure 8-12. What is the segment margin of the product line?
A) $200,000
B) $325,000
C) $350,000
D) $240,000
Q2) Just-in-time
A)the costs of not having a product available when demanded by a customer
B)the costs of carrying inventory
C)approach that maintains goods should be pulled through the system by present demand
D)the number of units in the order quantity that minimizes the total cost
E)the costs of placing and receiving an order
Q3) The inventory cost that can include processing costs, cost of insurance for shipping, and unloading is called
A) ordering cost.
B) carrying cost.
C) stockout cost.
D) setup cost.
E) storing cost.
Q4) Variable costing treats fixed factory overhead as a ______________.
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Chapter 9: Profit Planning
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Sample Questions
Q1) Refer to Figure 9-9. How much cash is paid in November for berry purchases (rounded to the nearest dollar)?
A) $25,258
B) $21,088
C) $28,900
D) $19,963
E) $32,212
Q2) _________________ consists of beginning cash balance and the expected cash receipts.
Q3) Which of the following is true of the master budget?
A) Monthly budgets are derived by dividing the master budget by 12.
B) Fixed costs cannot change from one month to another.
C) Variable costs cannot change from one month to another.
D) The master budget can reflect seasonal effects.
E) None of these.
Q4) ending inventory of product
A)production budget
B)direct materials purchases budget
Q5) Does a not-for-profit agency need to budget? Why or why not?
Q6) A __________________ is a moving 12-month budget.
Page 11
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Chapter 10: Standard Costing: a Managerial Control Tool
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180 Verified Questions
180 Flashcards
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Sample Questions
Q1) Refer to Figure 10-5. What is the materials price variance?
A) $100,000 F
B) $112,500 U
C) $135,000 F
D) $170,000 U
Q2) Standards are set by using historical experiences, ___________________, and input from operating personnel, marketing, and accounting.
Q3) All of the following are true except
A) A favorable labor efficiency variance could result from using higher quality materials that result in fewer inspections.
B) A favorable labor rate variance could result from lower wage workers quitting.
C) A favorable materials price variance could result from purchasing identical materials from another supplier at a lower price.
D) An unfavorable materials usage variance could result from not efficiently utilizing raw materials, thus causing waste.
E) An unfavorable labor efficiency variance can be caused by machine downtime, and poor quality materials.
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Chapter 11: Flexible Budgets and Overhead Analysis
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172 Flashcards
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Sample Questions
Q1) A _______________ is a budget created in advance that is based on a particular level of activity.
Q2) Inefficient usage of labor implies a(n)
A) both unfavorable variable overhead efficiency variance and unfavorable variable overhead spending variance.
B) favorable variable overhead efficiency variance.
C) unfavorable variable overhead spending variance.
D) favorable variable overhead spending variance.
E) unfavorable variable overhead efficiency variance.
Q3) Refer to Figure 11-2. Comparing the static budget to the actual costs, we can conclude that
A) the manager spent more than should have been spent.
B) immediate action is needed to reduce costs.
C) the plant manager was clearly not efficient.
D) the plant manager should be dismissed.
E) None of these.
Q4) The ____________________ budget gives expected outcomes for a range of activity levels.
Q5) A _________________ enables a firm to compute expected costs for a range of activity levels.
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Chapter 12: Performance Evaluation and Decentralization
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Sample Questions
Q1) If the operating asset turnover increased by 50% and the margin increased by 50%, the ROI would increase by
A) 50%.
B) 25%.
C) 100%.
D) 125%.
Q2) Refer to Figure 12-3. Assume that Grey Inc. mandates that any transfers take place at full manufacturing cost. What would be the transfer price if Centra transferred boxes to Mantra?
A) $1.35
B) $1.48
C) $1.00
D) Cannot be determined from the information given.
E) $0.90
Q3) Economic Value Added is residual income with the cost of capital equal to the firm's A) budgeted cost of capital.
B) average cost of capital.
C) standard cost of capital.
D) actual cost of capital.
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Page 14
Chapter 13: Short-Run Decision Making: Relevant Costing
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170 Flashcards
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Sample Questions
Q1) Vest Industries manufactures 40,000 components per year. The manufacturing cost of the components was determined as follows: \(\begin{array}{lr}
\text { Direct materials } & \$ 5,000 \\
\text { Direct labor } & 120,000 \\
\text { Variable overhead } & 45,000 \\
\text { Fixed overhead } & 60,000 \\
\text { Total } & \$ 300,000
\end{array}\) An outside supplier has offered to sell the component for $12.75. Fixed costs will remain the same if the component is purchased from an outside supplier. What is the effect on income if Vest Industries purchases the component from the outside supplier?
A) $270,000 decrease
B) $270,000 increase
C) $30,000 decrease
D) $30,000 increase
Q2) A method of determining the cost of a product or service based on the price that customers are willing to pay is called ________________.
Q3) Segmented reports are helpful for managers to make _______________ decisions.
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Page 15
Chapter 14: Capital Investment Decisions
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172 Flashcards
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Sample Questions
Q1) How do NPV and IRR differ?
A) NPV measures profitability in absolute terms, whereas the IRR method measures profitability in relative terms.
B) IRR should be used for choosing among competing, mutually exclusive projects.
C) NPV considers the time value of money and IRR does not.
D) Both NPV and IRR will generate the same decisions.
Q2) The capital investment decision making model that assumes that each cash inflow is reinvested at the project's own rate of return is
A) net present value.
B) accounting rate of return.
C) payback period.
D) internal rate of return.
E) None of these.
Q3) Net present value analysis and internal rate of return analysis can sometimes produce erroneous choices because they ignore the time value of money.
A)True
B)False
Q4) The value of an investment at the end of its life is called its ________________.
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Page 16
Chapter 15: Statement of Cash Flows
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Sample Questions
Q1) Last year Kinslow Company's cash account increased by $16,000. Net cash flows from investing activities were ($39,000). Net cash flows from financing activities were $17,000. On the statement of cash flows, the net cash flows from operating activities were
A) $(22,000).
B) $38,000.
C) $(6,000).
D) $16,000.
Q2) Determining the cash flows from operating activities generally requires analyzing each item on the income statement as well as the current asset and current liability accounts.
A)True
B)False
Q3) The ______________ computes operating cash flow by adjusting net income for items that do not affect cash flows.
Q4) Which of the following investing activities results in a cash inflow?
A) selling treasury stock.
B) retirement of bonds.
C) disposal of a building.
D) paying cash dividends.
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Chapter 16: Financial Statement Analysis
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Sample Questions
Q1) Terms of sale can produce statistical variations among companies within the same industry.
A)True
B)False
Q2) Allows evaluation of the extent to which funds are used efficiently
A)Liquidity Ratio
B)Leverage Ratio
C)Profitability Ratio
D)Horizontal Analysis
E)Trend Analysis
Q3) Current ratio
A)Liquidity Ratio
B)Leverage Ratio
C)Profitability Ratio
Q4) Measures the ability of a company to meet long and short term obligations
A)Liquidity Ratio
B)Leverage Ratio
C)Profitability Ratio
D)Horizontal Analysis
E)Trend Analysis
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