Accounting Information for Decision Making Practice Exam
Course Introduction
Accounting Information for Decision Making explores how accounting concepts and financial information are used to guide business decisions. The course introduces the fundamentals of financial and managerial accounting, emphasizing the interpretation, analysis, and application of financial statements and reports. Students learn to evaluate costs, budgets, and performance metrics to support planning, control, and strategic choices within organizations. By examining real-world scenarios and case studies, the course equips students with practical skills to assess the financial implications of various business alternatives and to make informed, evidence-based decisions.
Recommended Textbook
Fundamental Managerial Accounting Concepts 8th Edition by Thomas P Edmonds
Available Study Resources on Quizplus
14 Chapters
2016 Verified Questions
2016 Flashcards
Source URL: https://quizplus.com/study-set/3029
Page 2
Chapter 1: Management Accounting and Corporate Governance
Available Study Resources on Quizplus for this Chatper
143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/60238
Sample Questions
Q1) How does the level of aggregation differ between financial accounting information and managerial accounting information?
Answer: Answers will vary
Most financial accounting information is prepared for the organization as a whole,so the level of aggregation is high.Much managerial accounting information is prepared for subunits of the company (departments,sales territories,etc. ),so the level of aggregation is lower than for financial accounting.
Q2) Senior executives focus on financial data when comparing the performance of their companies to that of competitors.
A)True
B)False Answer: True
Q3) A merchandising business paid $2,500 to purchase inventory and $50 to have the inventory delivered to its customers.Its product costs were $2,550.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Cost Behavior, Operating Leverage, and Profitability Analysis
Available Study Resources on Quizplus for this Chatper
141 Verified Questions
141 Flashcards
Source URL: https://quizplus.com/quiz/60237
Sample Questions
Q1) If a company had a pure fixed cost s
Answer: Answers will vary
With a fixed cost structure,a given dollar increase in sales would result in an equal increase in net income.
Q2) Contribution margin represents the amount available to cover fixed expenses and then provide company profits.
A)True
B)False Answer: True
Q3) What is the high-low method used for?
Answer: Answers will vary
The high-low method is used to estimate the fixed and variable parts of a mixed cost.
Q4) If a profitable company has both fixed and variable costs,its operating leverage will always be greater than 1.
A)True
B)False Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Analysis of Cost,Volume,and Pricing to Increase Profitability
Available Study Resources on Quizplus for this Chatper
144 Verified Questions
144 Flashcards
Source URL: https://quizplus.com/quiz/60236
Sample Questions
Q1) Joseph Company has variable costs of $80 per unit,total fixed costs of $200,000,and a break-even point of 5,000 units.If the variable cost per unit decreases by $8,how many units must Joseph Company sell to break-even?
A) 2,778 units
B) 2,500 units
C) 6,250 units
D) 4,167 units
Answer: D
Q2) Target costing begins with determining the cost of the product and then focusing on developing ways to sell the product at a price that will enable the company to achieve its desired profit margin.
A)True
B)False
Answer: False
Q3) Sensitivity analysis acknowledges that profitability is often affected by multidimensional forces.
A)True
B)False
Answer: True
Page 5
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Cost Accumulation,Tracing,and Allocation
Available Study Resources on Quizplus for this Chatper
156 Verified Questions
156 Flashcards
Source URL: https://quizplus.com/quiz/60235
Sample Questions
Q1) Select the correct statement from the following.
A) The allocation base determines whether a cost is classified as direct or indirect.
B) The same cost cannot be classified as both direct and indirect.
C) Relevant costs can include direct and indirect costs.
D) Direct costs always display a variable behavior pattern.
Q2) A manager believes that the number of units sold drives the company's selling costs.The number of units sold would be referred to as the cost driver.
A)True
B)False
Q3) The terms "cost tracing" and "cost allocation" may be used interchangeably because they mean the same thing.
A)True
B)False
Q4) Costs that can be traced to a cost object in a cost-effective way are called direct costs.
A)True
B)False
Q5) Indicate whether each of the following statements is
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Cost Management in an Automated Business
Environment: ABC, ABM, and TQM
Available Study Resources on Quizplus for this Chatper
153 Verified Questions
153 Flashcards
Source URL: https://quizplus.com/quiz/60234
Sample Questions
Q1) As companies have become more highly automated,overhead costs have become a larger part of total manufacturing cost.
A)True
B)False
Q2) Bennett Company pays its salespeople a sales commission on each sale they make.This commission is an example of an upstream cost.
A)True
B)False
Q3) Indicate whether each of the following statements is
Q4) When making a long-term cost plus pricing decision,a company should consider:
A) the upstream research and development cost.
B) the allocated portion of facility-level cost.
C) the direct manufacturing cost.
D) All of these answers are correct.
Q5) Activities that support specific products or product lines are known as:
A) facility-level activities
B) unit-level activities
C) product-level activities
D) batch-level activities
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Relevant Information for Special Decisions
Available Study Resources on Quizplus for this Chatper
139 Verified Questions
139 Flashcards
Source URL: https://quizplus.com/quiz/60233
Sample Questions
Q1) Smith Company makes three different products,each of which must pass through one very expensive machine.Assuming that availability of machine time is limited to 4,000 hours per year,which is less than the 5,000 hours demanded,how should the company decide which product to make?
Q2) Select the correct statement regarding relevant costs and revenues.
A) Sunk costs are relevant for decision-making purposes.
B) Relevant costs are frequently called unavoidable costs.
C) Direct labor is an example of a unit-level cost.
D) Only variable costs are relevant for decision making.
Q3) The book value of equipment generally is one of the most important factors to consider in deciding to replace the equipment.
A)True
B)False
Q4) One of the potential dangers from outsourcing is the possible occurrence of low-ball pricing.
A)True
B)False
Q5) What are constraints? Provide an example.
Q6) How can a manager's time horizon affect his/her decision making?
Page 8
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Planning for Profit and Cost Control
Available Study Resources on Quizplus for this Chatper
142 Verified Questions
142 Flashcards
Source URL: https://quizplus.com/quiz/60232
Sample Questions
Q1) Chu Company provided the following information related to its inventory sales and purchases for December Year 1 and the first quarter of Year 2: \(\begin{array}{|l|l|r|r|r|}
\hline& \text { Dec. Year } 1 &\text { Jan. Year } 2 &\text { Feb. Year } 2 & \text { Mar. Year } 2 \\
\hline & \text { (Actual)} & \text { (Budgeted) }& \text { (Budgeted) }& \text { (Budgeted) } \\
\hline \text {Cost of goods sold } &\$ 80,000 & \$ 140,000 & \$ 180,000 & \$ 120,000 \\ \hline
\end{array}\) Desired ending inventory levels are 25% of the following month's projected cost of goods sold.Budgeted purchases of inventory in February Year 2 would be:
A) $135,000.
B) $165,000.
C) $180,000.
D) $225,000.
Q2) How do short-term plans differ from long-term plans?
Q3) How might a company develop sales estimates to be used in preparing a sales budget?
To view all questions and flashcards with answers, click on the resource link above.
9
Chapter 8: Performance Evaluation
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/60231
Sample Questions
Q1) To assess the importance of a variance,managers should consider,not just the materiality of the amount,but also the type of variance being analyzed.
A)True
B)False
Q2) Hickam Company makes one product,for which it has developed the following standard for labor: each unit should require 1.50 hours at $12/hour.In April,Hickam made 10,000 units,using 1.65 hours per unit at a cost of $11.50 per hour.
Required:
(a)Determine the total labor variance and indicate whether it is favorable or unfavorable.
(b)Determine the labor price variance and indicate whether it is favorable or unfavorable.
(c)Determine the labor usage variance and indicate whether it is favorable or unfavorable.
Q3) How are managers likely to respond if variances are used to punish managers?
Q4) Indicate whether each of the following statements is
Q5) Indicate whether each of the following statements is
Q6) Indicate whether each of the following statements is
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Responsibility Accounting
Available Study Resources on Quizplus for this Chatper
118 Verified Questions
118 Flashcards
Source URL: https://quizplus.com/quiz/60230
Sample Questions
Q1) Which of the following statements about residual income is
A) Residual income = Operating Income - Sales
B) Residual income = Operating Income - Operating Assets
C) Residual income is the amount of income in excess of a target or desired return on investment
D) None of these.
Q2) Indicate whether each of the following statements about return on investment is
Q3) Select the incorrect statement concerning the application of the controllability concept to responsibility accounting.
A) As a practical matter,control of costs or revenues may be shared rather than absolute.
B) The concept of control is crucial to an effective responsibility accounting system.
C) Managers lose motivation when they are held accountable for actions that are beyond their scope of control.
D) Each manager should be evaluated on the costs but not the revenues that are under his or her control.
Q4) Indicate whether each of the following statements about decentralization is
Q5) Indicate whether each of the following statements is
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Planning for Capital Investments
Available Study Resources on Quizplus for this Chatper
155 Verified Questions
155 Flashcards
Source URL: https://quizplus.com/quiz/60229
Sample Questions
Q1) The difference between an ordinary annuity and an annuity due is:
A) an ordinary annuity represents a present value and an annuity due represents a future value.
B) an ordinary annuity represents a future value and an annuity due represents a present value.
C) an ordinary annuity assumes the cash flows occur at the beginning of the period and an annuity due assumes the cash flows occur at the end of the period.
D) an ordinary annuity assumes the cash flows occur at the end of the period and an annuity due assumes the cash flows occur at the beginning of the period.
Q2) An investment that costs $40,000 will produce annual cash flows of $12,000 for a period of 4 years.Given a desired rate of return of 10%,what will the investment generate? (Do not round your intermediate calculations.Round your answer to nearest whole dollar. )
A) A positive net present value of $38,038.
B) A positive net present value of $1,962.
C) A negative net present value of $38,038.
D) A negative net present value of $1,962.
Q3) Indicate whether each of the following statements is
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Product Costing in Service and Manufacturing
Entities
Available Study Resources on Quizplus for this Chatper
139 Verified Questions
139 Flashcards
Source URL: https://quizplus.com/quiz/60228
Sample Questions
Q1) Winken,Blinken,and Nod is a law firm specializing in real estate litigation.In addition to the three partners,the firm employs nine associates who work directly with clients.The average budgeted compensation for the twelve professionals is $240,000.Each lawyer is budgeted at 1,500 billable hours per year.All professional labor costs are included in a single direct cost pool and are traced to jobs on a per-hour basis.All non-professional labor costs are included in a single overhead cost pool and are allocated to jobs using professional labor hours as the allocation base.Budgeted overhead costs total $1,800,000.The firm is considering bidding on some work with a local university.The job is expected to require 100 hours of professional labor.
Required:
1)Compute the budgeted direct cost rate per hour of professional labor.
2)Compute the budgeted (that is,predetermined)overhead cost rate per hour of professional labor.
3)Compute the budgeted cost for the university job.
Q2) Cost information for services or products produced by a company is needed for:
A) determining the company's selling prices.
B) external reporting.
C) managerial decisions.
D) All of these.
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Job-Order, Process, and Hybrid Costing Systems
Available Study Resources on Quizplus for this Chatper
144 Verified Questions
144 Flashcards
Source URL: https://quizplus.com/quiz/60227
Sample Questions
Q1) Equivalent units of production would best be defined as: I realize the bold word in text is "equivalent whole units" - However,given the wording of the LO,I have not inserted the word "whole" anywhere.
A) The number of whole units that could have been completed with direct material,direct labor and overhead used during the period.
B) Completed units that are produced through the same process.
C) Number of units transferred out during the period,regardless of when the units were started into production.
D) Units of production that are the same kind of product.
I realize the bold word in text is "equivalent whole units" - However,given the wording of the LO,I have not inserted the word "whole" anywhere.
Q2) Job-order cost systems are used by many service businesses;process cost systems are not applicable to service businesses.
A)True
B)False
Q3) Indicate whether each of the following statements about job-order cost systems is
Q4) Indicate whether each of the following statements is
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/60226
Sample Questions
Q1) When debt is used to finance the purchase of assets,the term or time span of the debt should always be shorter than the lifespan of the assets.
A)True
B)False
Q2) All of the following are considered to be measures of a company's short-term debt-paying ability except:
A) Current ratio.
B) Earnings per share.
C) Inventory turnover.
D) Average collection period.
Q3) What is a primary drawback with examining and comparing absolute amounts from two businesses' financial statements?
Q4) Accrual accounting requires the use of many estimates,including:
A) Uncollectible accounts expense.
B) Warranty costs.
C) Assets' useful lives.
D) All of these answers are correct.
Q5) Indicate whether each of the following statements about financial statement analysis is
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
140 Verified Questions
140 Flashcards
Source URL: https://quizplus.com/quiz/60225
Sample Questions
Q1) What kinds of cash flows are reported as financing activities on the statement of cash flows?
Q2) The 2014 income statement for Year 2 of Winter Co.reported wages expense of $160,000.The At December 31,2013,Year 1,the balance sheet showed a balance in wages payableWages Payable of $16,000.At while the December 31,2014,Year 2,the balance sheet showed a balance in wages payableWages Payable of $22,000.What amount of cash was paid for wages in 2014during the year?
A) $176,000
B) $166,000
C) $154,000
D) $144,000
Q3) Under the indirect method,losses would be added to net income when determining the amount of cash flow fromnet cash flow from operating activities.
A)True
B)False
Q4) Can a company have a negative cash flow from operationsoperating activities for the year on the statement of cash flows but still have a net income on the income statement? Explain.
To view all questions and flashcards with answers, click on the resource link above.
Page 16