Accounting Information Systems
Exam Answer Key
Course Introduction
Accounting Information Systems explores the integration of accounting principles with information technology to support effective decision-making and control within organizations. The course covers the design, implementation, and management of computerized accounting systems, focusing on how these systems collect, process, and report financial information. Topics include system documentation, internal controls, transaction cycles, data management, and the evaluation of accounting software. Students also examine current trends, such as cloud computing, cybersecurity, and data analytics, to understand their impact on the accounting profession. Through practical exercises and case studies, learners gain the skills needed to analyze system risks, ensure data integrity, and support organizational objectives with reliable financial information.
Recommended Textbook
Cost Management A Strategic Emphasis 7th Edition by Edward Blocher
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20 Chapters
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Page 2
Chapter 9: Short-Term Profit Planning:
CVP Analysis
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Sample Questions
Q1) Which of the following is not a benefit of using a lean manufacturing system?
A)Lead times are reduced.
B)Average inventory is decreased.
C)Productivity is improved.
D)Production operations are linked in a smooth, uninterrupted flow.
E)Products, on average, have less variety.
Answer: E
Q2) Which of the following is a contemporary management technique used by the management accountant to identify and monitor the costs of a product throughout all steps from product design to the finished product?
A)Enterprise risk management.
B)Target costing.
C)Life cycle costing.
D)Enterprise sustainability.
Answer: C
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Page 3
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Q1) Which of the following would not likely be a perspective of a balanced scorecard for a consumer products retailer?
A)Learning and innovation.
B)Internal processes.
C)Financial performance.
D)Customer satisfaction.
E)Research and development.
Answer: E
Q2) Which of the following does not represent a possible opportunity for a manufacturing firm as a part of SWOT analysis?
A)Demographic trends.
B)Technological advances in the industry.
C)A patent developed by another firm for manufacturing a product.
D)Changes in regulation of the industry.
E)Changes in the economic environment facing all industries.
Answer: C
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Chapter 3: Basic Cost Management Concepts
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Sample Questions
Q1) What should be the amount in the finished goods inventory at the beginning of the year?
A)$15,000.
B)$45,000.
C)$55,000.
D)$61,000.
Answer: C
Q2) Which of the following best describes a fixed cost?
A)It may change in total when such change is unrelated to changes in production volume.
B)It may change in total when such change is related to changes in production volume.
C)It is constant per unit of change in production volume.
D)It may change in total when such change depends on production volume within the relevant range.
Answer: A
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Chapter 4: Job Costing
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Sample Questions
Q1) The amount of direct materials issued is:
A)$110,000.
B)$30,000.
C)$90,000.
D)$80,000.
E)$50,000.
Q2) The predetermined factory overhead rate includes:
A)Estimated annual sales.
B)Estimated total amount of cost driver.
C)Estimated total cost.
D)Estimated electricity consumed.
Q3) The predetermined factory overhead rate is:
A)212% of direct labor costs.
B)215% of direct labor costs.
C)222% of direct labor costs.
D)203% of direct labor costs.
E)210% of direct labor costs.
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6
Chapter 5: Activity-Based Costing and Customer
Profitability Analysis
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Sample Questions
Q1) Using activity-based costing, applied miscellaneous overhead for the HighF model per unit is (rounded to the nearest cent):
A)$6.13.
B)$11.86.
C)$16.28.
D)$32.36.
E)$66.73.
Q2) Customer profitability analysis:
A)Always shows that the company with the highest total sales generates the highest net customer profit.
B)Always shows that the company with the lowest total sales generates the lowest net customer profit.
C)Produces the same results as a Pareto analysis.
D)Helps identify actions that affect customer profitability.
E)None of the above answers is correct.
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Chapter 6: Process Costing
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Sample Questions
Q1) What are the total conversion costs transferred to finished goods?
A)$801,810.
B)$855,720.
C)$921,340.
D)$910,000.
Q2) In the computation of manufacturing cost per equivalent unit, the weighted-average method of process costing considers:
A)Current costs only.
B)Current costs less cost of ending work-in-process inventory.
C)Current costs plus cost of beginning work-in-process inventory.
D)Current costs plus cost of ending work-in-process inventory.
E)Current costs less cost of beginning work-in-process inventory.
Q3) What are the total conversion costs of abnormal spoilage?
A)$60,518.
B)$53,454.
C)$64,908.
D)$58,314.
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8
Chapter 7: Cost Allocation: Departments, Joint Products, and
By-Products
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Q1) The total cost accumulated in the assembly department using the direct method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):
A)$1,033,333.
B)$1,690,000.
C)$686,667.
D)$646,667.
E)$693,333.
Q2) Which of the following is not a "production" department in a service firm?
A)Accounting department.
B)Operations department.
C)Marketing department.
D)Factory engineering and maintenance.
Q3) Which of the following is an advantage of the sales value at split-off method?
A)Easy to calculate.
B)Market prices for some industries change constantly.
C)The sales price might not be available.
D)Conceptually superior to the revenue recognition method.
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Chapter 8: Cost Estimation
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Sample Questions
Q1) Data mining and analytical software are increasingly used by large retailers and hotel chains, restaurants, and other businesses. In recent years, the trend is for smaller companies and manufacturers to begin to see the value of data mining, analyzing the data the company has about its customers and competitive environment to help the company make improved decisions about pricing, customer service strategies, new product development, and other competitive issues.
Required: Explain how a growing, medium-sized manufacturer of furniture for hotels, businesses, and other commercial enterprises could use analytics to help it reach out to new customers.
Q2) The R-squared in a satisfactory regression should be:
A)less than .3
B)greater than .3
C)less than .7
D)greater than .7
Q3) Accurate cost estimates are required by strategic management for all except:
A)To facilitate strategic positioning analysis.
B)To facilitate target costing and life-cycle costing.
C)To facilitate value-chain analysis.
D)Accounting internal control.
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Page 10
Chapter
Cvp Analysis
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Sample Questions
Q1) In performing short-term CVP analysis for a new product or service, the decision-maker would:
A)Include all current and future fixed costs.
B)Include only current fixed costs.
C)Include only future fixed costs.
D)Include only incremental fixed costs.
E)Include only allocated fixed costs.
Q2) The sales units required for Kelvin Co. to make a before-tax profit of $12,000 are:
A)46,000 units.
B)51,500 units.
C)50,000 units.
D)51,000 units.
E)52,000 units.
Q3) If 40,000 office chairs were sold, Stylish Sitting's operating income would be:
A)$240,000.
B)$280,000.
C)$210,000.
D)$340,000.
E)$120,000.
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Chapter 10: Strategy and the Master Budget
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Sample Questions
Q1) Blake Company has $15,000 cash at the beginning of June and anticipates $50,000 in cash receipts and $34,500 in cash disbursements. The company requires a minimum cash balance of $20,000. Any excess cash over the minimum desired balance is used to pay down debts. Blake has an agreement with its bank to borrow as needed or to repay loans as funds become available. As of May 31, the company owes $15,000 to the bank. The balance of the loan on June 30 will be:
A)$4,500.
B)$9,500.
C)$15,000.
D)$19,500.
E)$25,500.
Q2) Assume that only the specified parameters change in a sensitivity analysis. The contribution margin ratio increases when:
A)Total short-term fixed costs increase.
B)Total short-term fixed costs decrease.
C)Variable cost per unit increases.
D)Variable cost per unit decreases.
Q3) What is the focus of activity-based budgeting (ABB)? What is the principal advantage of ABB?
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Page 12
Chapter 11: Decision Making With a Strategic Emphasis
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Sample Questions
Q1) The direct labor-hour constraint for Harrington's linear program is:
A)A + B + C 150.
B)Min Z = 2A + 2B + 3C.
C)Max Z = 2A + 2B + 3C - 150.
D)100A + 50B + 40C 1,050.
E)2A + 2B + 3C 150.
Q2) The costs described in situations I and IV above are:
A)Prime costs.
B)Sunk costs.
C)Discretionary costs.
D)Relevant costs.
E)Opportunity costs.
Q3) The above mathematical functions together constitute a(n):
A)Simulation model.
B)Linear programming model.
C)Economic order quantity model.
D)Multivariate regression model.
E)Nonlinear optimization model.
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13
Chapter 12: Strategy and the Analysis of Capital Investments
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Sample Questions
Q1) The present value of the depreciation tax shield for the 2016 MACRS depreciation of the new asset is:
A)$0.
B)$6.112.
C)$6,608.
D)$16,320.
E)$16,800.
Q2) Especially for projects with long lives, estimation of revenues (or benefits), costs, and cash flows of a capital investment project is a difficult task principally because of:
A)The lack of good data.
B)Uncertainty about future events.
C)The large dollar amounts involved.
D)Income tax effects.
E)Lack of available forecasting tools.
Q3) Conceptually, a firm's capital structure is its:
A)Mix of debt and equity capital, expressed in book-value terms.
B)Mix of debt and equity capital, expressed in market-value terms.
C)Equity capital only, expressed in book-value terms.
D)Equity capital only, expressed in market-value terms.
Page 14
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Chapter 13: Cost Planning for the Product Life Cycle: Target
Costing, Theory of Constraints, and Strategic Pricing
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Sample Questions
Q1) If Johnson determines price using a desired return on life cycle costs of 30%, the price is:
A)$262.50
B)$306.00
C)$375.00
D)$364.29
E)$330.00
Q2) Profit before taxes for the Bskin product, per life-cycle income statements, is:
A)$175,000.
B)$425,000.
C)$522,500.
D)$207,500.
E)$332,500.
Q3) Which of the following is a method of reducing cost by identifying parts in different products that are common and interchangeable?
A)Target costing.
B)Value chain analysis.
C)Concurrent engineering.
D)Group technology.
E)Theory of constraints.
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Chapter
Direct-Cost Variances, and the Role of Nonfinancial
Performance Measures
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Sample Questions
Q1) The difference between the flexible-budget operating income and the actual operating income in a period is the:
A)Sales mix variance.
B)Sales volume variance.
C)Sales price variance.
D)Operating income flexible-budget variance.
E)Total operating income variance.
Q2) What was the direct materials price variance for July?
A)$1,500 favorable.
B)$3,000 unfavorable.
C)$3,000 favorable.
D)$7,500 unfavorable.
E)$7,500 favorable.
Q3) The direct labor rate variance is:
A)$36,900 unfavorable.
B)$37,800 unfavorable.
C)$55,350 unfavorable.
D)$56,700 unfavorable.
E)$73,800 unfavorable.
Q4) Discuss some major differences between static and flexible budgets. Page 16
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Page 17
Chapter 15: Operational Performance Measurement:
Indirect-Cost Variances and Resource-Capacity Management
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Q1) Random variances are:
A)Often considered as uncontrollable from the standpoint of management.
B)Likely to recur until corrected.
C)The result of failing to include all relevant variables in the analysis.
D)The result of in including wrong or irrelevant variables in the variance-investigation model.
E)Controlled through the use of six sigma and other techniques from operations management.
Q2) The most appropriate end-of-period disposition of underapplied or overapplied factory overhead
A)Is to close the amount to cost of goods sold.
B)Is to close the amount to finished goods inventory only.
C)Is to apportion the amount to finished goods inventory and cost of goods sold.
D)Depends on the significance of the amount in question.
E)Is to charge the amount as a period cost, e.g., "miscellaneous expense."
Q3) What are the steps in determining the standard fixed factory overhead application rate? Does the procedure differ for product-costing versus cost-control purposes?
Page 18
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Chapter 16: Operational Performance Measurement:
Further Analysis of Productivity and Sales
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Sample Questions
Q1) Julie Hilger started New Treads to combine fashion and sustainability. The original production of sandals made from recycled plastic has expanded to a complete line of casual footwear. Current sales total over $2 million. Julie hired the firm's first controller early this year, and has asked him to detail suggestions for ways to increase profits. Adrian Warring, the new controller, has compiled a list of recommended changes that focus on quality improvements. New Treads customers expect high quality at a low price, a "value" product. So the company must simultaneously watch costs and quality. After receiving his list of suggestions, Julie calls Adrian to her office and says, "I don't see how improving quality can increase productivity. In fact, it seems to me that efforts to improve quality will slow down production and decrease productivity."
Required:
Using specific examples, help Adrian explain to Julie why efforts to improve quality can also boost productivity. How does productivity play a role in the firm's strategy and competitive environment?
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19
Chapter 17: The Management and Control of Quality
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Q1) A quality circle:
A)Is a large group of employees from the same work area who meet regularly to identify and solve work-related problems and to implement and monitor solutions to these problems.
B)Does not implement and monitor solutions to the problems.
C)Is a small group of employees from the same work area who meet regularly to identify and solve work-related problems and to implement and monitor solutions to these problems.
D)Is a small group of employees from different work areas who meet regularly to identify and solve work-related problems and to implement and monitor solutions to these problems.
E)Does not meet regularly.
Q2) Which of the following items is not considered an external quality metric?
A)On-time delivery rates.
B)Customer response time (CRT).
C)Number of customer complaints.
D)Throughput efficiency (i.e., the ratio of throughput to resources used).
E)Percentage of products that experience early or excessive failure.
Q3) What is the reasoning behind the misconception that quality improvements decrease productivity?
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Chapter 18: Strategic Performance Measurement: Cost
Centers, Profit Centers, and the Balanced Scorecard
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Sample Questions
Q1) In properly developing formal systems at the team level that will have the desired impact on employees' performance, the management accountant should recognize any existing informal systems and:
A)Make plans to eliminate these informal systems.
B)Simply formalize them into the system being developed.
C)Try to eliminate them prior to system development.
D)Not let these "culture" aspects affect system development.
E)Try to capture valued "culture" aspects in the formal system.
Q2) An employment contract is an agreement between the manager and top management designed to provide incentives for the manager to act:
A)Independently to achieve top management's objectives.
B)Consistently with that of other managers.
C)Independently to achieve the manager's objectives.
D)Independently to achieve the customer's objectives.
Q3) Inventory under the variable costing method includes:
A)Direct materials cost, direct labor cost, but no factory overhead cost.
B)Direct materials cost, direct labor cost, and variable factory overhead cost.
C)Prime cost but not conversion cost.
D)Prime cost and all conversion cost.
Page 21
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Chapter 19: Strategic Performance Measurement:
Investment Centers and Transfer Pricing
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Sample Questions
Q1) The biggest problem with cost-based transfer prices is:
A)The fact that their use may result in sub-optimal decisions from the standpoint of the organization as a whole.
B)Too much negotiation is involved in determining the transfer price.
C)Data unavailability.
D)They are difficult to put into place.
E)They may lead to goal congruence within the firm.
Q2) Return on investment (ROI) encourages business units-such as investment centersto invest only in projects that earn:
A)A rate of return greater than borrowing costs.
B)An amount greater than the amount of EVA currently being generated.
C)A rate of return greater than the amount of residual income currently being earned.
D)A rate of return less than the unit's current ROI.
E)A rate of return higher than the unit's current ROI.
Q3) This question pertains to the use of market-based transfer prices.
Required:
What is the primary advantage and what is the primary difficulty in using market-based transfer prices?
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Chapter 20: Management Compensation, Business
Analysis, and Business Valuation
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Q1) Bonus plans should be tied to variable cost income which is not affected by inventory level changes, rather than the conventional:
A)Tax-based net income.
B)Marginal cost income.
C)Full cost income.
D)Operating income.
Q2) Which one of the following has been the most common payment option for bonus compensation in recent years?
A)Vacation time.
B)Stock options.
C)Increased benefits.
D)Salary increase.
Q3) The value of the company, calculated using the earnings multiple for 2013 is:
A)$1,072,000
B)$1,347,000
C)$2,616,000
D)$2,520,000
E)$8,437,500
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