Accounting Information Systems Test
Preparation
Course Introduction
Accounting Information Systems explores the design, implementation, and control of computerized systems that collect, process, and report financial information for decision-making and management. The course covers foundational concepts such as transaction cycles, database management, internal controls, risk assessment, and systems development, integrating accounting principles with information technology.
Students gain hands-on experience with modern accounting software, analyze real-world case studies, and examine the ethical and security challenges faced in digital environments, preparing them to use and evaluate accounting information systems effectively in organizations.
Recommended Textbook
Cost Management A Strategic Emphasis 8th Edition by Edward Blocher
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Page 2
Chapter 1: Cost Management and Strategy
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Sample Questions
Q1) Strategic management can be defined as the development of a sustainable:
A) Chain of command.
B) Competitive position.
C) Cash flow.
D) Business entity.
E) Company image.
Answer: B
Q2) Which of the following is the primary user of management accounting information regarding business units?
A)Company management.
B)Investors.
C)Creditors.
D)Industry and governmental organizations
Answer: A
Q3) Which of the following is not a consequence of lack of strategic information?
A)Inability to effectively benchmark competitors.
B)Failure to identify most profitable products.
C)Inability to trace costs to individual products.
D)Incorrect investment decisions.
Answer: C
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Chapter
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Sample Questions
Q1) A strategy map is:
A)A detailed flowchart outlining which firm managers are responsible for each implementation of a firm's strategy and when these implementations are to take place.
B)A cause and effect diagram of the relationships among the balanced scorecard perspectives to show how the achievement of critical success factors in each perspective affects the achievement of goals in other perspectives and the overall financial performance of the firm.
C)A framework for the firm to achieve a desired organizational change in strategy while mapping the successes of other firms within the industry.
D)None of the above.
Answer: B
Q2) Sustainability is the balancing of short and long term goals in all three dimensions of the company's performance.Those three areas are:
A)Economic, social, and environmental.
B)Economic, social, and financial.
C)Economic, environmental, and political.
D)Social, environmental, and financial.
Answer: A
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Chapter 3: Basic Cost Management Concepts
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Sample Questions
Q1) Certain workers are assigned the task of unpacking production materials received from suppliers.These workers place the material in a storage area pending subsequent use in the production process.The labor cost of such workers is normally classified as:
A)Direct labor.
B)Direct materials.
C)Indirect labor.
D)Indirect materials.
Answer: C
Q2) A manager of a large retail firm is interested in knowing what the company's product costs are. Which of the following would be considered a product cost for the manager's company?
A)Direct materials.
B)Direct labor.
C)Factory overhead.
D)Transportation costs paid by the retailer to transport the purchased product to its distribution location.
E)None of the above.
Answer: D
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Chapter 4: Job Costing
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Sample Questions
Q1) Warren Company uses a predetermined overhead rate. Overhead for the next twelve months is estimated to be $480,000. Jackson applies overhead as a percentage of direct labor cost. Direct labor costs are estimated to be $400,000 for the next year. During the year actual direct labor costs amounted to $520,000 and the actual overhead was $605,000.
Required:
(1) Calculate the over/under-applied overhead for the year.
(2) Prepare the journal entries to close the accounts, assuming that the over/under-applied overhead is closed to cost of goods sold.
Q2) The ideal criterion for choosing an allocation base for overhead is:
A)Ease of calculation.
B)A cause-and-effect relationship.
C)Ease of use.
D)Its preciseness.
E)Its applicability.
Q3) Which of the following is not a cost element on the job cost sheet?
A)Materials.
B)Labor.
C)Hours.
D)Overhead.
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Chapter 5: Activity-Based Costing and Customer
Profitability Analysis
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Sample Questions
Q1) General corporate sales expenditures are:
A)Customer unit-level costs.
B)Customer batch-level costs.
C)Customer-sustaining costs.
D)Distribution-channel costs.
E)Sales-sustaining costs.
Q2) Successful activity-based costing (ABC) implementation depends upon the firm:
A)Having support of consultants with needed expertise.
B)Having a thorough activity analysis.
C)Starting with a relatively simple system.
D)Having well-trained managers.
E)Having adequate computer resources.
Q3) Important concepts in resource consumption accounting include all of the following except:
A)Variable costing.
B)Resource interrelationships.
C)Activity interrelationships.
D)Detail level cost information.
E)Treatment of idle capacity.
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Chapter 6: Process Costing
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Sample Questions
Q1) The sum of units transferred out and ending inventory units, assuming no spoilage, determines the:
A)Units completed during the period.
B)Units spoiled.
C)Units transferred in during the period.
D)Units accounted for.
E)Units started during the period.
Q2) On March 1, Portland Company had 20,000 units of work in process in Department A, which were 100% complete as to material costs and 40% complete as to conversion costs.During March, 150,000 units were started in Department A and 160,000 units were completed and transferred to Department B.Work in process on March 31 was 100% complete as to material costs and 50% complete as to conversion costs.By what amount would the equivalent units for conversion costs for the month of March differ if the FIFO method were used instead of the weighted-average method?
A) 10,000 decrease.
B) 8,000 decrease.
C) 6,000 decrease.
D) 5,000 decrease.
E) 4,000 decrease.
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Page 8
Chapter 7: Cost Allocation: Departments, Joint Products, and
By-Products
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Sample Questions
Q1) Which one of the following methods of allocating joint costs uses a measure of weight, size or number of units to allocate joint costs to joint products?
A)Net realizable value method.
B)Physical unit method.
C)Product measure method.
D)Cost measure method.
E)Sales value at split-off method.
Q2) Net Realizable Value (NRV) of a product is:
A)Split-off cost - profit margin - additional processing and selling cost.
B)Profit at split-off + additional processing and selling cost.
C)Ultimate sales value - additional processing and selling cost.
D)Ultimate sales value + additional processing and selling cost.
E)Cost allocation plus separable cost.
Q3) Which of the following is not a phase of the departmental approach?
A)Trace all direct manufacturing costs.
B)Allocate the production department costs to the products.
C)Allocate overhead costs to direct costs.
D)Allocate the service department costs to the production departments.
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Chapter 8: Cost Estimation
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Sample Questions
Q1) Maintenance expenses of a company are to be analyzed for purposes of constructing a flexible budget. Examination of past records disclosed the following costs and volume measures:\(\begin{array}{lrr} & \text { Highest } & \text { Lowest } \\
\text { Cost per month } & \$ 86,000 & \$ 74,000 \\ \text { Machine hours } & 96,000 & 66,000 \end{array}\)Using the high-low-point method of analysis, the estimated variable cost per machine hour is:
A) $0.40
B) $0.20
C) $0.90
D) $0.10
E) $0.70
Q2) Data collected on the cost objects and cost drivers for cost estimation must be:
A) Brief and limited.
B) Exhaustive.
C) Concrete.
D) Consistent and accurate.
E) Varied.
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10
Chapter
CVP Analysis
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Sample Questions
Q1) Which one of the following is not included as a factor in CVP analysis?
A) Total fixed costs.
B) Variable cost per unit.
C) Desired (targeted) profit.
D) Selling price per unit.
E) Expected production level.
Q2) Framing House, Inc. produces and sells picture frames. Variable costs are expected to be $17 per frame; fixed costs for the year are expected to total $130,000. The budgeted selling price is $25 per frame.
The sales dollars required to make a before-tax profit ( B) of $20,000 for Framing House would be:
A) $445,650.
B) $468,750.
C) $476,350.
D) $406,150.
E) $412,050.
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11
Chapter 10: Strategy and the Master Budget
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Sample Questions
Q1) Which of the following best describes the process of sales forecasting?
A) Multiple sales forecasting tools are typically used to generate such forecasts.
B) Trend analysis cannot be used for sales forecasting because of seasonality effects.
C) Econometric models cannot be used for sales forecasting because of their inherent complexity and limitations.
D) Sales forecasting works best with a simple visual plotting of past data on a graph.
E) Generally speaking, the level of unfilled back orders and credit policies of the company in question can be ignored since these represent competitive responses.
Q2) "Budgetary slack" occurs when:
A) Employees refuse to adhere to budgeted plans and operations.
B) The budget is so difficult to meet that employees slack-off from work.
C) An authoritative, or imposed, budgeting process is used.
D) To "meet" budget objectives, employees ask for resources in excess of what they need.
E) Employees ask for fewer resources than they need, in order to continuously improve.
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Chapter 11: Decision Making With a Strategic Emphasis
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Sample Questions
Q1) Value streams are useful in decision-making because:
A) They identify all value-added products and services.
B) They help to highlight improved efficiency in the plant.
C) Special orders can be evaluated within the context of the value stream.
D) Irrelevant costs are identified.
E) Lean thinking produces costlier products.
Q2) When a decision is made in an organization, it is selected from a group of alternative courses of action (i.e., decision alternatives). The loss associated with not choosing a given decision alternative is referred to as a(n):
A) Sunk cost.
B) Discretionary.
C) Opportunity cost.
D) Committed cost.
E) Outlay cost.
Q3) Determination of the optimum short-term product mix should focus on:
A) Fully absorbed costs.
B) Production (that is, resource) and demand constraints.
C) Sales-mix costs.
D) Revenue forecasts for each of the firm's products or services.
E) The relative sales values of the firm's outputs (goods or services).
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Chapter 12: Strategy and the Analysis of Capital Investments
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Sample Questions
Q1) Olsen Inc. purchased a $600,000 machine to manufacture a specialty tap for electrical equipment. The tap is in high demand and Olsen can sell all that it could manufacture for the next 10 years. To encourage capital investments, the government exempts taxes on profits from new investments in this type of machinery. This legislation most likely will remain in effect in the foreseeable future. The equipment is expected to have 10 years of useful life and no salvage value at the end of this 10-year period. The firm uses straight-line depreciation. The net cash inflow is expected to be $144,000 each year. Olsen uses a discount rate of 10% in evaluating its capital investments.
The estimated accounting (book) rate of return (to two decimal places) based on average investment for this proposed investment is:
A) 12.73%.
B) 14.00%.
C) 25.45%.
D) 28.00%.
E) 50.90%.
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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) Bryan Inc. produces a specialty top-quality juice machine. The product, the JM50, requires four processes to be completed. Specifically, these processes are exterior construction, pulp filter insertion, painting, and packaging. Each process is performed at separate workstations with different completion rates:
Exterior construction can manufacture 100,000 juicer exteriors per day.
Pulp filter insertion can install 25,000 filters every 6 hours.
Painting can decorate 3,000 juicers every half hour.
Packaging can package 5,000 juicers per hour.
The plant operates 24/7, 24 hours a day every day of the week. What cost management technique does this case illustrate? (Assume an average 30-day month.)
A) Target costing.
B) Theory of constraints.
C) Life-cycle costing.
D) ABC analysis.
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Chapter 14: Operational Performance Measurement:
Direct-Cost Variances, and the Role of Nonfinancial
Performance Measures
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Sample Questions
Q1) For a direct material, which one of the following is defined as the difference between the actual and standard unit price of the direct material multiplied by the actual quantity of the material purchased?
A) Direct materials purchase-price variance.
B) Direct materials volume variance.
C) Direct materials usage variance.
D) Direct materials flexible-budget variance.
E) Direct materials purchase-mix variance.
Q2) A company's flexible budget for 15,000 units of production showed sales of $48,000, variable costs of $18,000, and fixed costs of $12,000. The operating income in the master budget for 20,000 units, to the nearest dollar, would be:
A) $8,000.
B) $13,500.
C) $24,000.
D) $28,000.
E) $30,000.
Q3) What is a direct labor efficiency variance, and what are some of the likely causes of this variance?
Page 16
Q4) Discuss some major differences between static and flexible budgets.
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Chapter 15: Operational Performance Measurement:
Indirect-Cost Variances and Resource-Capacity Management
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Sample Questions
Q1) Gerhan Company's flexible budget for the units manufactured in May shows $15,640 of total factory overhead; this output level represents 70% of available capacity. During May, the company applied overhead to production at the rate of $3.00 per direct labor hour (DLH), based on a denominator volume level of 6,120 DLHs, which represents 90% of available capacity. The company used 5,000 DLHs and incurred $16,500 of total factory overhead cost during May, including $6,800 for fixed factory overhead.
What is the total factory overhead flexible-budget variance (to the nearest whole dollar) for Gerhan Company in May?
A) $380 unfavorable.
B) $680 unfavorable.
C) $860 unfavorable.
D) $1,160 unfavorable.
E) $1,360 unfavorable.
Q2) What are the four (4) steps in determining the standard fixed factory overhead application rate? Does the procedure differ for product-costing versus cost-control purposes? Explain.
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Chapter 16: Operational Performance Measurement:
Further Analysis of Productivity and Sales
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Q1) Gutsen Communications Inc. manufactures a scrambling device for cellular phones. The main component of the scrambling device is a very delicate part DTV-12. DTV-12 requires careful handlings during manufacturing. Once damaged, the part must be discarded. Only skilled laborers are hired to manufacture and install DTV-12. Damages still occur, however. The following are the operating data of Gutsen Communications Inc. for 2018 and 2019 relative to the insertion of DTV-12. Round calculations to 2 significant digits.\(\begin{array}{lrr}
& {2018} &{2019} \\
\text { Number of phones manufactured } & 600,000 & 780,000 \\
\text { Units of DTV-12 used } & 960,000 & 1,072,500 \\
\text { Direct labor hours for DTV-12 insertion } & 1,800 & 2,600 \\
\text { Total cost of DTV-12 units } & \$ 1,443,750 & \$ 2,333,750\\
\text { Direct labor wage rate per hour }&\$67&\$82
\end{array}\)The partial financial productivity ratio of DTV-12 in 2018 is:
A) 0.33.
B) 0.42.
C) 2.35.
D) 3.66.
E) 4.98.
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Chapter 17: The Management and Control of Quality
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Sample Questions
Q1) A ________ shows trends in a quality measure over time.
A) Pareto diagram
B) Fishbone (i.e., Ishikawa) diagram
C) Cost-of-Quality (COQ) report
D) Run chart
E) Taguchi Loss Function (TLF)
Q2) Steel Inc. specializes in manufacturing ship doors. The blueprint specification for the thickness of a high-demand model calls for 0.90 ± 0.05 inch. The estimated cost to the firm is $800 to scrap a part that is outside of specification (i.e., for each unit where the thickness exceeds 0.95 inches or is less than 0.85 inches.). The thickness measure, x, for the unit just completed is 0.87.
Required:
1. Calculate (to the nearest dollar) the value of k, the cost coefficient in the Taguchi loss function.
2. Calculate the estimated quality loss, L(x), for x = 0.87; round your answer to the nearest dollar.
Q3) Explain what is meant by the term "net promoter score" and what relevance this metric has in terms of the goal of developing a comprehensive framework for managing and controlling quality.
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Page 19
Chapter 18: Strategic Performance Measurement: Cost
Centers, Profit Centers, and the Balanced Scorecard
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Sample Questions
Q1) What costs are treated as product costs under variable costing?
A) Only variable costs.
B) Only variable production costs.
C) All variable costs.
D) All variable and fixed manufacturing costs.
Q2) Managers who are risk averse:
A) Seek to accept options with low risk and would choose an option with lower expected value if it had more risk.
B) Seek to avoid options with low risk and would choose an option with higher expected value if it had more risk.
C) Seek to avoid options with high risk and would choose an option with lower expected value if it had less risk.
D) Seek to accept options with high risk and would choose an option with lower expected value if it had less risk.
E) Seek to accept options with low risk and would choose an option with higher expected value if it had more risk.
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Chapter 19: Strategic Performance Measurement:
Investment Centers and Transfer Pricing
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Sample Questions
Q1) When the Bronx Company formed three divisions a year ago, the president told the division managers an annual bonus would be given to the most profitable division.The bonus would be based on either the return on investment (ROI) or residual income (RI) of the division.Investment is to be measured using gross book value (GBV) or net book value (NBV).The following data are available: \(\begin{array}{lll}\text { Division }&\text { Gross Book Value (GBV) }&\text { Operating Income }\\
\text { A } & \$ 500,000 & \$ 53,500 \\
\text { B } & \$ 480,000 & \$ 52,000 \\
\text { C } & \$ 300,000 & \$ 33,300
\end{array}\) All the assets are long-lived assets that were purchased 15 years ago and have 15 years of useful life remaining.A zero terminal disposal price is predicted.Bronx's minimum rate of return (cost of capital) used for computing RI is 10%.
Required:
Which method for computing profitability would each manager likely choose? Show supporting calculations.Round percentage answers to 2 decimal places, e.g., 0.1234 as 12.34%.Where applicable, assume straight-line depreciation.
Q2) 0
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Chapter 20: Management Compensation, Business
Analysis, and Business Valuation
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Sample Questions
Q1) Lack of controllability is a disadvantage associated with which bonus compensation base relative to compensation objectives?
A)Stock price.
B)Profit.
C)Balanced scorecard.
D)Salary.
Q2) Bonus plans should be tied to variable cost income, which is less subject to manipulation because 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.
Q3) A method for determining a bonus based upon the performance of the unit is a(n):
A)Segment-based pool.
B)Unit-based pool.
C)Firm-based pool.
D)Activity-based pool.
E)Function-based pool.
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