Advanced Managerial Accounting Final Exam
Course Introduction
Advanced Managerial Accounting delves into the strategic use of accounting information for managerial decision-making, planning, and control in complex organizational settings. The course covers advanced topics including performance measurement, budgeting processes, cost allocation techniques, capital budgeting, and the analysis of financial and non-financial data to guide long-term strategies. Students will explore contemporary issues such as activity-based costing, balanced scorecards, ethics in managerial accounting, and the integration of technology in accounting systems. Through case studies and real-world applications, the course prepares students to interpret and utilize accounting data effectively to support strategic business decisions and enhance organizational performance.
Recommended Textbook
Managerial Accounting 2nd Edition by Karen W. Braun
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Page 2
Chapter 1: Introduction to Managerial Accounting
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Sample Questions
Q1) Management accounting requires independent audits of the firm's books.
A)True
B)False
Answer: False
Q2) Under Sarbanes-Oxley,what is the maximum number of years of imprisonment for knowingly destroying or creating documents to obstruct any federal investigation?
A)5 years
B)10 years
C)15 years
D)20 years
Answer: D
Q3) The design of a management accounting system should consider how reports affect employees' behavior.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Building Blocks of Managerial Accounting
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Sample Questions
Q1) Average variable costs:
A)remain the same as production decreases.
B)remain the same as production increases.
C)go down as production decreases.
D)remain the same no matter if production increases or decreases.
Answer: D
Q2) Receipt of materials is part of the firm's value chain.
A)True
B)False
Answer: True
Q3) Decision making is guided only by differential costs.
A)True
B)False
Answer: False
Q4) Inventoriable product costs consist of manufacturing overhead,direct labor and direct materials.
A)True
B)False Answer: True
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Chapter 3: Job Costing
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Sample Questions
Q1) The predetermined manufacturing overhead rate is calculated by dividing the total estimated manufacturing overhead costs by the total estimated amount of the allocation base.
A)True
B)False
Answer: True
Q2) The journal entry to issue $500 of direct materials and $30 of indirect materials involves a debit to:
A)manufacturing overhead for $530.
B)work in process inventory for $530.
C)work in process inventory for $500 and a credit to manufacturing overhead for $0.
D)work in process inventory for $500 and a debit to manufacturing overhead for $30.
Answer: D
Q3) A service firm's costs are comprised of direct materials,direct labor and manufacturing overhead.
A)True
B)False
Answer: False
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Chapter 4: Activity-Based Costing, lean Production, and the Costs of Quality
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Sample Questions
Q1) The predetermined overhead allocation rate using the traditional costing system would be closest to:
A)$ 40.52 per direct labor hour.
B)$ 130.56 per direct labor hour.
C)$ 58.75 per direct labor hour.
D)$ 30.92 per direct labor hour.
Q2) Which of the following is one of the four cost categories typically found on a cost of quality report?
A)Development costs
B)Inventory failure costs
C)Marketing costs
D)Prevention costs
Q3) Using factory utilities would most likely be classified as a:
A)unit-level activity.
B)batch-level activity.
C)product-level activity.
D)facility-level activity.
Q4) Lean production systems typically produce large batches.
A)True
B)False
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Chapter 5: Process Costing
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Sample Questions
Q1) Costs of ending WIP inventory are not included in the cost per equivalent unit computation.
A)True
B)False
Q2) Assume 10,000 units were in beginning WIP; 40,000 units were started; 43,000 units were completed; and 7,000 units were in ending WIP.Materials are added at the beginning of the process.There are total equivalent units for materials.
A)53,000
B)50,000
C)47,000
D)40,000
Q3) Natural Desserts has 2,500 gallons of paint in WIP inventory,with all materials already added.The paint is 60% through the process.Assuming all conversion costs are added evenly throughout the process,what are the equivalent units for conversion costs?
A)0
B)1,500
C)2,000
D)500
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7
Chapter 6: Cost Behavior
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Sample Questions
Q1) The cost equation determined using the high-low method should be the same as the cost equation determined using regression analysis.
A)True
B)False
Q2) Using absorption costing,what is operating income for last month?
A)$120,000
B)$ 26,800
C)$ 57,200
D)$182,800
Q3) If Wendell prepares a contribution margin income statement for the month of June,what would be his operating income?
A)$ 58,000
B)$ 26,500
C)$ 17,500
D)$ 80,000
Q4) When using the high-low method,fixed costs and variable costs appear in the same cost equation.
A)True B)False
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Chapter 7: Cost-Volume-Profit Analysis
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Sample Questions
Q1) Break-even sales in dollars for Death by Chocolate is:
A)$14,286.
B)$31,250.
C)$30,000.
D)$75,000.
Q2) Akron Laser Wash sells deluxe car washes for $15 per customer.Variable costs are $9 per wash.Fixed costs are $40,000 per month.What is Akron Laser Wash's contribution margin per car wash?
A)$0.40
B)$9.00
C)$6.00
D)$2.50
Q3) MaxTech Company has a predicted operating income of $80,000.Their total variable expenses are $24,000 and their total fixed expenses are $36,000.They have a unit contribution margin of $10.MaxTech's break-even sales in units is:
A)9,200.
B)14,000.
C)4,400.
D)3,600.
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Chapter 8: Short Term Business Decisions
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Sample Questions
Q1) Sierra has the following information to evaluate-her current salary of $45,000 versus total revenues of $62,000 and expenses of $57,000 from starting a new business.How much is the opportunity cost associated with starting the new business?
A)$62,000
B)$5,000
C)$57,000
D)$45,000
Q2) In making the decision whether to sell a product as is or process the product further,the expected income from selling the product as is may be defined as which of the following?
A)A sunk cost of processing the product further
B)The opportunity cost of processing the product further
C)The opportunity cost of selling the product as is
D)A limiting factor in processing the product further
Q3) Costs that differ between alternatives are relevant.
A)True
B)False
Q4) Based on these numbers,what are Burr Hill's total costs?
Q5) Based on these numbers,what is Burr Hill's target revenue?
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Chapter 9: The Master Budget and Responsibility Accounting
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Sample Questions
Q1) Free Ride Limo,a division of Travel Escapes,is evaluated based on the ROI of the division.Free Ride Limo would be what type of responsibility center?
A)Cost center
B)Investment center
C)Profit center
D)Revenue center
Q2) Which of the following budgets is part of the operating budgets?
A)Production budget
B)Budgeted balance sheet
C)Capital expenditure budget
D)Cash budget
Q3) The master budget only includes the sales budget,the capital expenditures budget,and the financial budget.
A)True
B)False
Q4) One of the key benefits of budgeting is that it forces managers to plan.
A)True
B)False
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Chapter 10: Flexible Budgets and Standard Costs
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Sample Questions
Q1) What is the direct labor efficiency variance?
A)$18,000 favorable
B)$17,250 favorable
C)$18,000 unfavorable
D)$17,250 unfavorable
Q2) Which budget is best for managers to use to plan revenues and expenses at different sales volumes?
A)Capital budget
B)Flexible budget
C)Static budget
D)Master budget
Q3) The standard variable overhead cost rate for the Croskey Company is $12 per unit.Budgeted fixed overhead cost is $60,000.The Croskey Company budgeted 4,000 units for the current period and actually produced 3,860 finished units.What is the production volume variance? Assume the allocation base for fixed overhead costs is the number of units expected to be produced.
A)$3,780 favorable
B)$2,100 unfavorable
C)$2,100 favorable
D)$3,780 unfavorable
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Chapter 11: Performance Evaluation and the Balanced Scorecard
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Sample Questions
Q1) The manager of a local Wal-Mart would be in charge of a(n): A)cost center.
B)investment center.
C)profit center.
D)revenue center.
Q2) Providing subunit managers with performance results and comparing targets to actual results would be an example of:
A)promoting goal congruence and coordination.
B)motivating managers.
C)providing feedback.
D)benchmarking.
Q3) The manager of the accounting department at Nike would be in charge of a(n): A)cost center.
B)investment center.
C)profit center.
D)revenue center.
Q4) The sales margin is operating income divided by sales. A)True
B)False
Q5) List and describe the goals of performance evaluation systems.
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Chapter 12: Capital Investment Decisions and the Time
Value of Money
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Sample Questions
Q1) The profitability index equals the present value of net cash inflows from the investment divided by the cost of the investment.
A)True
B)False
Q2) A company is evaluating a variety of different capital investment opportunities.The company can only choose one project due to limited funds.What would be the best capital budgeting method for this company to use to select a project?
A)Payback method
B)Accounting rate of return method
C)Net present value method
D)Profitability index
Q3) Which term below is best described as the "rate of return that makes the NPV of a capital project equal to zero"?
A)Accounting rate of return
B)Discount rate
C)Internal rate of return
D)Net present value
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Page 14
Chapter 13: Statement of Cash Flows
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Sample Questions
Q1) A company uses the indirect method to prepare the statement of cash flows.It presents the following amounts on its financial statements. \[\begin{array} { | l | r | r | }
\hline & \text { End of this year } & \text { End of prior year } \\
\hline \text { Accuunts receivable } & \$ 110,000 & \$ 100,000 \\
\hline \text { Cost af gouds sald } & 560,000 & \\
\hline \text { Sales revenue } & 830,000 & \\
\hline \text { Accounts payable* } & 75,000 & 67,000 \\
\hline \text { Inventary } & 86,000 & 105,000 \\
\hline \text { Salary payable } & 13,000 & 10,000 \\
\hline \text { Salary exgense } & 49,000 & 45,000 \\
\hline
\end{array}\] *Relates solely to the acquisition of inventory
What will appear in the operating activities section related to accounts receivable?
A)The increase of $10,000 will be subtracted from sales revenue.
B)The increase of $10,000 will be added to net income.
C)The increase of $10,000 will be added to sales revenue.
D)The increase of $10,000 will be subtracted from net income
Q2) Calculate the cost of merchandise purchased during the year.
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15
Chapter 14: Financial Statement Analysis
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Sample Questions
Q1) What is the rate of return on common stockholder's equity for the current year?
A)34.24%
B)4.63%
C)36.87%
D)47.81%
Q2) Which of the following is MOST helpful in comparing companies of different sizes?
A)Ratio analysis
B)Using common-sized statements
C)Both ratio analysis and using common-sized statements
D)Neither one
Q3) What is the dividend yield for the current year?
A)51.88%
B)4.63%
C)47.81%
D)34.24%
Q4) Horizontal analysis allows the comparison of companies with different amounts of net sales and net assets.
A)True
B)False
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