Accounting for Managers
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Course Introduction
Accounting for Managers is designed to equip current and future managers with an understanding of essential accounting concepts and practices relevant to organizational decision-making. The course emphasizes the use of financial and managerial accounting information for planning, controlling, and evaluating business operations. Topics include the analysis of financial statements, budgeting, cost-volume-profit analysis, performance measurement, and the interpretation of accounting data for effective strategic and operational decisions. Through practical examples and case studies, students will develop the skills necessary to use accounting information to support management functions and drive business success.
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Cornerstones of Managerial Accounting 3rd Edition by Maryanne M. Mowen
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14 Chapters
2120 Verified Questions
2120 Flashcards
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Chapter 1: Introduction to Managerial Accounting
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Sample Questions
Q1) The managerial activity of monitoring a plan's implementation and taking corrective action as needed
A)Financial accounting
B)Managerial accounting
C)Planning
D)Controlling
E)Decision making
F)Value chain
G)Continuous improvement
H)Line positions
I)Time
J)Total quality management
K)Lean accounting
L)Staff positions
M)Controller
N)Treasurer
O)Ethical behaviour
Answer: D
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Chapter 2: Basic Managerial Accounting Concepts
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217 Flashcards
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Sample Questions
Q1) Refer to Quest Company. What was the total period cost?
A) $24,000
B) $46,000
C) $190,000
D) $250,000
Answer: B
Q2) Which of the following describes cost of goods manufactured?
A) the cost of direct materials used in production
B) the product cost of goods sold during the current period
C) the cost remaining in ending work-in-process inventory
D) the product cost of goods completed during the current period
Answer: D
Q3) Costs incurred to produce future benefits would generally be categorized as liabilities.
A)True
B)False
Answer: False
Q4) Refer to Owen Sound Company. Calculate the per-unit product cost.
Answer: $516,000 (DM) + $430,000 (DL) + $645,000 (MOH) = $1,591,000 Mfg Costs / 86,000 = $18.50
Page 4
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Chapter 3: Cost Behaviour
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Sample Questions
Q1) Refer to Saskatoon Company. Using the least squares (regression) method, what is the forecasted utility cost at 3,000 machine hours (rounded to the nearest dollar)?
A) $10,631
B) $28,288
C) $37,116
D) $45,945
Answer: C
Q2) Controller's salary
A)Variable cost
B)Fixed cost
Answer: B
Q3) Cost of lubricating machinery
A)Variable cost
B)Fixed cost
Answer: A
Q4) Cost of gear shifters, with respect to number of vehicles produced
A)Variable cost
B)Fixed cost
Answer: A
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Chapter 4: Cost-Volume-Profit Analysis: a Managerial Planning Tool
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154 Flashcards
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Sample Questions
Q1) What is the result when actual sales equal break-even point in dollar sales?
A) the margin of safety is positive
B) the margin of safety is negative
C) the margin of safety equals zero
D) the margin of safety is negative or positive
Q2) Even when you hold the sales mix constant, it is impossible to calculate the break-even point for individual products in a multiple product firm because many of the fixed costs are common to a number of products.
A)True
B)False
Q3) Which statement is an assumption of a cost-volume-profit analysis?
A) Revenue and costs behave in a linear manner.
B) More inventory is produced than is sold in the period.
C) Sales price and costs vary within the relevant range.
D) Sales price and costs cannot be accurately identified.
Q4) What are two concepts useful to management when assessing risk?
Q5) The linear equation for total cost is (unit variable cost × units) + (fixed cost / units).
A)True
B)False
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Chapter 5: Job-Order Costing
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Sample Questions
Q1) On March 9 of the current year, Job 123 was completed. The job cost sheet showed a total of $4,000 in direct materials and $6,000 in direct labour at a rate of $20 per direct labour hour. Manufacturing overhead is applied at $30 per direct labour hour. Which debit to Finished Goods Inventory records the completion of Job 123?
A) $4,000
B) $9,000
C) $13,000
D) $19,000
Q2) The use of a departmental rate has the advantage of being simple and reduces data collection requirements.
A)True
B)False
Q3) There are two major types of companies for costing purposes: those that use a job-order costing system and those that use process costing systems.
A. Explain the differences between the two types of systems.
B. List 3 examples of each type of company.
Q4) Discuss overapplied and underapplied overhead.
Q5) What are the three steps of overhead application?
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Chapter 6: Process Costing
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Sample Questions
Q1) Which step is physical flow analysis in the general pattern of a process costing production report?
A) the last step
B) the first step
C) the step after the computation of unit cost
D) the step after calculation of equivalent units
Q2) The FIFO costing method separates work and costs of the equivalent units in beginning inventory from work and costs of the equivalent units produced during the current period. Only current work and costs are used to calculate this period's unit cost.
A)True
B)False
Q3) For which process costing method is simplicity the main advantage?
A) actual cost method
B) FIFO costing method
C) LIFO costing method
D) weighted average costing method
Q4) Process costing is most appropriate for manufacturers of unique products.
A)True
B)False
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Chapter 7: Activity-Based Costing and Management
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159 Flashcards
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Sample Questions
Q1) Which of the following is NOT a component of process value analysis?
A) velocity
B) driver analysis
C) activity analysis
D) performance measurement
Q2) One of the questions answered by activity analysis should be "What activities are done?"
A)True
B)False
Q3) Efficiency is the reciprocal of cycle time.
A)True
B)False
Q4) Which of the following is defined as a category of quality-related costs?
A) invention
B) controller
C) external failure
D) internal control
Q5) Unit-level activities are performed each time a batch is produced.
A)True
B)False
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Chapter 8: Absorption and Variable Costing, and Inventory Management
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Sample Questions
Q1) Refer to Theele Corporation. What is the May ending Finished Goods Inventory using the absorption costing method?
A) $39,000
B) $45,000
C) $153,000
D) $300,000
Q2) What is characteristic of the economic order quantity (EOQ)?
A) the quantity that maximizes total profit
B) the quantity that maximizes carrying costs
C) the quantity that minimizes total ordering cost
D) the quantity that minimizes total inventory-related costs
Q3) All other things being equal, if the number of units produced in a period is larger than the number of units sold in a period, absorption costing income will be higher than variable costing income.
A)True
B)False
Q4) Product cost includes all costs of the company.
A)True
B)False
10
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Chapter 9: Budgeting, Production, Cash, and Master Budget
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Sample Questions
Q1) Refer to Garden Company. What are the total cash disbursements expected during the month of July?
A) $55,600
B) $60,100
C) $161,600
D) $167,600
Q2) Beginning direct materials inventory
A)Production budget
B)Direct materials purchases budget
C)Sales budget
D)Production budget and Direct materials purchases budget
E)Production budget and Sales budget
F)Direct materials purchases budget and Sales budget
G)Product budget, Direct materials purchases budget, and Sales budget
Q3) For which organization is having a production budget most important?
A) retail stores
B) manufacturing firms
C) not-for-profit agencies
D) local government agencies
Q4) Describe some problems with participative budgeting.
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Chapter 10: Standard Costing: a Managerial Control Tool
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Sample Questions
Q1) During November, 10,000 direct labour hours were worked at a standard cost of $10 per hour. Suppose the direct labour rate variance for November was $4,000 unfavourable. What was the actual cost per direct labour hour?
A) $9.20
B) $9.60
C) $10.00
D) $10.40
Q2) Refer to High Fly Company. What is the standard number of sheets of aluminum allowed for a volume of 10,000 airplanes?
A) 7,500 sheets
B) 10,000 sheets
C) 11,250 sheets
D) 15,000 sheets
Q3) To compute the standard direct labour hours allowed, multiply the unit labour standard by the standard output.
A)True
B)False
Q4) Explain the kaizen approach to costing.
Q5) How are standards developed?
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Chapter 11: Flexible Budgets and Overhead Analysis
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Sample Questions
Q1) Refer to Cannon Company. What is the standard activity level on which the company based its fixed overhead rate?
A) 50,000 direct labour hours
B) 100,000 direct labour hours
C) 105,000 direct labour hours
D) 110,000 direct labour hours
Q2) Refer to Newby Company. Actual costs incurred were $246,000 fixed and $144,000 variable. Suppose the actual number of setups in June was 30. What would be the activity-based flexible budget variance?
A) $12,000 U
B) $12,000 F
C) $15,000 U
D) $15,000 F
Q3) Refer to Long, Inc. What is the variable overhead spending variance?
A) $20,000 U
B) $20,000 U.
C) $100,000 U
D) $100,000 U.
Q4) How does activity flexible budgeting differ from functional-based flexible budgeting?
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Chapter 12: Performance Evaluation and Decentralization
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Sample Questions
Q1) Refer to Giga-Stuff, Inc. Assume that Sophistosand and Videostuff have agreed on a transfer price of $2.20. What is the total benefit for Sophistosand?
A) $18,000
B) $63,000
C) $69,000
D) $81,000
Q2) Economic value added is residual income with the cost of capital equal to which of the following?
A) the firm's actual cost of capital
B) the firm's average cost of capital
C) the firm's standard cost of capital
D) the firm's budgeted cost of capital
Q3) In terms of a Balanced Scorecard, define Strategy?
Q4) A Balanced Scorecard viewpoint that describes the internal processes needed to provide value for customers and owners
A)Internal business process perspective
B)Learning and growth perspective
C)Customer perspective
D)Financial perspective
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Chapter 13: Short-Run Decision Making: Relevant Costing
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Sample Questions
Q1) Only costs and benefits associated with feasible alternatives are relevant in decision making.
A)True
B)False
Q2) Travers Company sets prices equal to cost plus 55%. Recently, the company charged a customer a price of $60 for an item. What was the cost of the item?
A) $25.20
B) $38.71
C) $40.32
D) $42.00
Q3) Which term reflects future costs that differ across alternatives?
A) sunk costs
B) relevant costs
C) variable costs
D) opportunity costs
Q4) The first step in making a short-run decision is to recognize and define the problem. A)True
B)False
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Chapter 14: Capital Investment Decisions
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Sample Questions
Q1) A postaudit evaluates the overall outcome of the investment and proposes corrective action if needed.
A)True
B)False
Q2) Can be used to determine whether or not an investment will negatively affect key financial ratios
A)Payback period
B)Accounting rate of return
C)Net present value
D)Internal rate of return
E)Discount rate
F)Annuity
G)Postaudit
H)Compounding of interest
I)CCA Tax Shield
J)Future Value
K)Discounted cash flows
Q3) What are the limitations of Accounting Rate of Return?
Q4) Explain the concept of postaudit? What are the advantages and disadvantages of the postaudit?
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