Advanced Managerial Accounting Exam
Questions
Course Introduction
Advanced Managerial Accounting delves into the complex techniques and analytical tools used by managers to make strategic business decisions. This course covers cost allocation methods, budgeting and forecasting, performance measurement, and variance analysis while emphasizing the use of accounting information for planning, controlling, and evaluating organizational operations. Students will explore both quantitative and qualitative aspects of managerial accounting and apply these concepts to real-world scenarios, including decision-making in areas such as pricing, product mix, capital budgeting, and risk management. The course also examines contemporary issues such as activity-based costing, balanced scorecard, and the impact of emerging technologies on managerial accounting practices.
Recommended Textbook
Managerial Accounting 11th Canadian Edition by Ray Garrison
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14 Chapters
2025 Verified Questions
2025 Flashcards
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Page 2
Chapter 1: Managerial Accounting and the Business Environment
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49 Verified Questions
49 Flashcards
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Sample Questions
Q1) The lean approach results in fewer defects,less wasted effort,and quicker customer response times than traditional production methods.
A)True
B)False
Answer: True
Q2) Many customers seek to purchase products and services from socially responsible companies.
A)True
B)False
Answer: True
Q3) A value chain consists of the major business functions that add value to a company's products and services.
A)True
B)False
Answer: True
Q4) Managerial accounting is not mandatory.
A)True
B)False
Answer: True
Page 3
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Chapter 2: Cost Terms,concepts,and Classifications
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Sample Questions
Q1) What is the outcome if the cost of goods sold is greater than the cost of goods manufactured?
A) Work-in-process inventory has decreased during the period.
B) Finished goods inventory has increased during the period.
C) Total manufacturing costs must be greater than cost of goods manufactured.
D) Finished goods inventory has decreased during the period.
Answer: D
Q2) What does conversion cost consist of?
A) Manufacturing overhead cost.
B) Direct materials and direct labour cost.
C) Direct labour cost.
D) Direct labour and manufacturing overhead cost.
Answer: D
Q3) When raw materials are used in production,their costs are transferred to the work in process inventory account as direct materials.
A)True
B)False Answer: True
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Chapter 3: Cost Behaviour: Analysis and Use
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Sample Questions
Q1) The high-low method is generally less accurate than the least-squares regression method for analyzing the behaviour of mixed costs.
A)True
B)False
Answer: True
Q2) Buckeye Company has provided the following data for maintenance cost: \(\begin{array}{|l|r|r|}
\hline& \text { Prior Year } & \text { Current Year } \\
\hline \text { Machine Hours } & 12,500 & 15,000 \\ \hline \text { Maintenance Cost } & \$ 27,000 & \$ 31,000 \\ \hline \end{array}\)
Using the high-low method,what is the cost formula for maintenance cost?
A) $7,000 per year plus $0.625 per machine hour.
B) $7,000 per year plus $1.60 per machine hour.
C) $21,625 per year plus $0.625 per machine hour.
D) $27,000 per year plus $1.60 per machine hour.
Answer: B
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Page 5
Chapter 4: Cost-Volume-Profit Relationships
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Sample Questions
Q1) A product sells for $20 per unit,and has a contribution margin ratio of 40%.Fixed expenses total $120,000 annually.The company that makes and sells the product has an income tax rate of 40%.How many units must be sold to yield an after-tax operating profit of $30,000?
A) 21,250 units.
B) 18,750 units.
C) 24,375 units.
D) 14,167 units.
Q2) A total of 30,000 units were sold last year.The contribution margin per unit was $2,and total fixed expenses were $20,000 for the year.This year,fixed expenses are expected to increase to $26,000,but the contribution margin per unit will remain unchanged at $2.How many units must be sold this year to earn the same operating income as was earned last year?
A) 23,000 units.
B) 33,000 units.
C) 30,000 units.
D) 13,000 units.
Q3) If sales are zero,the company's operating loss equals its fixed expenses.
A)True B)False
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Chapter 5: Systems Design: Job-Order Costing
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Sample Questions
Q1) Daffe Corporation uses direct labor-hours in setting its predetermined overhead rate.At the beginning of the year,the total estimated manufacturing overhead was $165,600.At the end of the year,actual direct labor-hours for the year were 11,900 hours,manufacturing overhead for the year was overapplied by $10,760,and the actual manufacturing overhead was $160,600.
Required:
What must have been the predetermined overhead rate for the year?
\[\begin{array} { | l | l | l | }
\hline & \text { Actual manufacturing } & \begin{array} { l }
\text { Overapplied manufacturing } \\
\text { overhead }
\end{array} \\
\text { Answer: } & \text { overhead } = & \\
\text { Applied manufacturing } \\
\text { overhead - }\\
\hline
\end{array}\]
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Chapter 6: Systems Design: Process Costing
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Sample Questions
Q1) What are the equivalent units of production for material for the month?
A) 50,000 units.
B) 60,000 units.
C) 54,500 units.
D) 75,000 units.
Q2) Using the FIFO method,the cost per equivalent unit of materials for May is closest to which of the following?
A) $4.12.
B) $4.50.
C) $4.60.
D) $4.80.
Q3) Suppose there was no separate breakdown of the total cost of the beginning work-in-process inventory of $90,120 into materials ($54,560)and conversion ($35,560).Which method of accounting would not have been possible to use?
A) Process costing, using weighted-average.
B) Process costing, using FIFO.
C) Process costing using either weighted-average or FIFO.
D) Operations costing.
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8
Chapter 7: Activity-Based Costing: A Tool to Aid Decision Making
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Sample Questions
Q1) The first-stage allocation in activity-based costing is the process by which overhead costs are assigned to products before they are assigned to customers.
A)True
B)False
Q2) The overhead cost per unit of Product B under the traditional costing system is closest to:
A) $22.38
B) $13.56
C) $73.74
D) $15.20
Q3) What would be the total overhead cost per customer according to the activity-based costing system,rounded to the nearest whole dollar? In other words,what would be the overall activity rate for the Customer Support activity cost pool?
A) $10,800.
B) $12,600.
C) $13,650.
D) $14,400.
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Page 9
Chapter 8: Variable Costing: A Tool for Management
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Sample Questions
Q1) What is the operating income (loss)for the month under variable costing?
A) ($14,100).
B) $3,900.
C) $8,100.
D) $12,000.
Q2) What was the total period cost for the month under the absorption costing approach?
A) $61,200.
B) $88,400.
C) $95,600.
D) $182,000
Q3) The term "gross margin" for a manufacturing company refers to the excess of sales over which of the following?
A) Cost of goods sold, excluding fixed manufacturing overhead.
B) All variable costs, including variable selling and administrative expenses.
C) Cost of goods sold, including fixed manufacturing overhead.
D) Variable costs, excluding variable selling and administrative expenses.
Q4) Absorption costing treats all manufacturing costs as product costs.
A)True
B)False
10
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Chapter 9: Budgeting
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Sample Questions
Q1) The PDQ Company makes collections on credit sales according to the following schedule:
25% in month of sale
70% in month following sale
4% in second month following sale
1% uncollectible
The following sales have been budgeted: \(\begin{array}{|l|r|}
\hline \text { Month } & \text { Sales } \\
\hline \text { April } & \$ 100,000 \\
\hline \text { May } & 120,000 \\
\hline \text { June } & 110,000 \\ \hline
\end{array}\)
What would be the cash collections in June?
A) $110,000.
B) $111,500.
C) $113,400.
D) $115,500.
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Chapter 10: Standard Costs and Overhead Analysis
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Sample Questions
Q1) How much overhead was applied to products during the period,rounded to the nearest dollar?
A) $151,993.
B) $153,270.
C) $154,410.
D) $157,200.
Q2) A volume variance will exist for Dori in a month under which of the following conditions?
A) When the production volume differs from sales volume.
B) When the actual direct labour hours differ from standard hours allowed.
C) When there is a budget variance in fixed overhead costs.
D) When the fixed overhead applied to units of product on the basis of standard hours allowed differs from the budgeted fixed overhead.
Q3) The standard direct labour rate should NOT include fringe benefits.
A)True
B)False
Q4) The overhead spending variance contains price but not quantity elements.
A)True
B)False
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Chapter 11: Reporting for Control
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Sample Questions
Q1) Which of the following would be classified as a prevention cost on a quality cost report?
A) Lost sales arising from a reputation for poor quality.
B) Final product testing and inspection.
C) Net cost of spoilage.
D) Quality data gathering, analysis, and reporting.
Q2) What will be the total prevention cost appearing on the quality cost report?
A) $103,000.
B) $145,000.
C) $151,000.
D) $155,000.
Q3) What would be a good example of a common cost that normally could NOT be assigned to products on a segmented income statement except on an arbitrary basis?
A) Product advertising outlays.
B) Salary of a corporation president.
C) Direct materials.
D) The product manager's salary.
Q4) Describe the balanced scorecard concept and explain the reasoning behind it.
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Chapter 12: Relevant Costs for Decision Making
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Sample Questions
Q1) The following standard costs pertain to a component part manufactured by Ashby Company: \(\begin{array}{|l|r|}
\hline \text { Direct Materials } & \$ 2 \\
\hline \text { Direct Labour } & \$ 5 \\
\hline \text { Manufacturing Overhead } & \$ 20 \\
\hline \text { Standard Cost per Unit } & \$ 27 \\
\hline \end{array}\)
The company can purchase the part from an outside supplier for $25 per unit.The manufacturing overhead is 60% fixed,and this fixed portion would not be affected by this decision.Assume that direct labour is an avoidable cost in this decision.What would be the relevant amount of the standard cost per unit in a decision of whether to make the part internally or buy it from the external supplier?
A) $2.
B) $15.
C) $19.
D) $27.
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Chapter 13: Capital Budgeting Decisions
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Sample Questions
Q1) The internal rate of return for a project is the discount rate that makes the net present value of the project equal to zero.
A)True B)False
Q2) The Whitton Company uses a discount rate of 15%.The company has an opportunity to buy a machine now for $16,000 that will yield cash inflows of $8,000 per year for each of the next three years.The machine would have no salvage value.What is the net present value of this machine,rounded to the nearest whole dollar,do not round your intermediate calculations? (Ignore income taxes in this problem.)
A) ($9,980).
B) $2,266.
C) $12,000.
D) $22,460.
Q3) The net present value method assumes that cash flows from a project are immediately reinvested at a rate of return equal to the discount rate.
A)True B)False
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15
Chapter 14: Financial Statement Analysis
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Sample Questions
Q1) Eastham Company's accounts receivablewere $600,000 at the beginning of the year and $800,000 at the end of the year.Cash sales for the year were $300,000.The accounts receivable turnover for the year was 5 times.What were Eastham Company's total sales for the year?
A) $800,000.
B) $1,300,000.
C) $3,300,000.
D) $3,800,000.
Q2) Orange Company's current ratio at the end of Year 2 was closest to which of the following?
A) 0.44 to 1.
B) 0.55 to 1.
C) 1.24 to 1.
D) 1.71 to 1.
Q3) Larosa Company's earnings per common share for Year 2 was closest to which of the following?
A) $3.09.
B) $9.41.
C) $9.86.
D) $14.09.
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