Advanced Managerial Accounting Practice Questions
Course Introduction
Advanced Managerial Accounting delves into the complex accounting concepts and practices essential for effective internal management decision-making. The course covers topics such as cost allocation methods, budgeting techniques, performance measurement systems, strategic cost management, and the use of accounting information in planning, controlling, and evaluating business operations. Emphasis is placed on understanding how advanced analytical tools and financial metrics drive organizational strategy, improve resource allocation, and foster long-term value creation. Designed for students seeking a deeper mastery of the managerial aspects of accounting, the course also integrates case studies and real-world scenarios to develop critical thinking and problem-solving skills relevant to dynamic business environments.
Recommended Textbook
Managerial Accounting 2nd Edition by Karen W. Braun
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14 Chapters
2698 Verified Questions
2698 Flashcards
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Page 2
Chapter 1: Introduction to Managerial Accounting
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171 Verified Questions
171 Flashcards
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Sample Questions
Q1) In most companies,managerial accountants no longer perform routine mechanical accounting tasks.
A)True
B)False
Answer: True
Q2) Who typically provides oversight for large corporations?
A)Stockholders
B)The CEO
C)The Board of Directors
D)The company president
Answer: C
Q3) An example of the IMA's competence standard is to:
A)abstain from engaging in or supporting any activity that might discredit the profession.
B)communicate information fairly and objectively.
C)keep information confidential,except when disclosure is legally required.
D)provide decision support that is accurate,clear,concise and timely.
Answer: D
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Chapter 2: Building Blocks of Managerial Accounting
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211 Flashcards
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Sample Questions
Q1) What is operating income?
A)$143,000
B)$ 43,000
C)$ 58,000
D)$ 47,000
Answer: B
Q2) ____________ costs include all costs associated with the production of a product.
A)Direct
B)Inventoriable
C)Mixed
D)Overhead
Answer: B
Q3) What were the company's period costs?
A)$ 306,000
B)$ 137,000
C)$ 110,000
D)$ 207,000
Answer: D
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Page 4
Chapter 3: Job Costing
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260 Flashcards
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Sample Questions
Q1) A document that accumulates job costs is called a:
A)job cost record.
B)bill of materials.
C)labor time record.
D)production schedule.
Answer: A
Q2) Manufacturing overhead would include:
A)indirect labor costs only.
B)all manufacturing costs except direct materials and direct labor.
C)all manufacturing costs.
D)indirect materials only.
Answer: B
Q3) Generally Accepted Accounting Principles (GAAP)mandates the type of product costing system (job costing or process costing)that must be used by a manufacturer.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Activity-Based Costing, lean Production, and the Costs of Quality
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201 Verified Questions
201 Flashcards
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Sample Questions
Q1) It is easier to allocate indirect costs to the products that caused those costs if you use the ABC system rather than traditional costing systems.
A)True B)False
Q2) Total units costs for all parts is:
A)$ 4.34.
B)$ 6.06.
C)$ 7.98.
D)$13.48.
Q3) The cost allocation rate for each activity is equal to the estimated total manufacturing overhead costs of the activity multiplied by the estimated total quantity of the cost allocation base.
A)True B)False
Q4) A plantwide overhead rate is calculated by multiplying the estimated total manufacturing overhead costs for the year by the estimated total amount of the allocation base for the year.
A)True B)False
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Chapter 5: Process Costing
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224 Flashcards
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Sample Questions
Q1) The last step of the 5-step process costing procedure is:
A)assign total costs to units completed and to units in ending WIP inventory.
B)summarize total costs to account for.
C)compute the cost per equivalent unit.
D)summarize the flow of physical units.
Q2) The first step of the 5-step process costing procedure is to summarize the flow of physical units.
A)True
B)False
Q3) On March 31,what would be the total equivalent units for direct materials?
A)39,000
B)42,000
C)50,000
D)53,000
Q4) Direct labor costs plus manufacturing overhead costs equal:
A)prime costs.
B)operating costs.
C)equivalent costs.
D)conversion costs.
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Chapter 6: Cost Behavior
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266 Verified Questions
266 Flashcards
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Sample Questions
Q1) Using absorption costing,what is cost of goods available for sale for last month?
A)$180,000
B)$150,000
C)$200,000
D)$ 48,000
Q2) Total costs for Watson & Company at 100,000 units are $350,000,while total fixed costs are $150,000.The total variable costs at a level of 200,000 units would be:
A)$700,000.
B)$175,000.
C)$400,000.
D)$300,000.
Q3) What would the operating income be if she prepared a contribution margin income statement for that month?
A)$14,000
B)$ 2,000
C)$16,000
D)$10,425
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Chapter 7: Cost-Volume-Profit Analysis
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Sample Questions
Q1) Dover Industries management has budgeted the following amounts for its next fiscal year: \[\begin{array} { | l | r | }
\hline \text { Total fixed expenses } & \$ 630,000 \\
\hline \text { Sale price per unit } & \$ 30 \\
\hline \text { Variable expenses per unit } & \$ 21 \\
\hline
\end{array}\] If fixed expenses increase by 10%,to maintain the original breakeven sales in units,the selling price per unit would have to be:
A)increased by 3%.
B)increased by 37%.
C)increased by 103%.
D)decreased by 63%
Q2) The unit variable cost for Veron Corporation is:
A)$1.28.
B)$1.62.
C)$0.76.
D)$0.86
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Chapter 8: Short Term Business Decisions
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Sample Questions
Q1) Qualitative factors play an important part in make or buy decisions.
A)True
B)False
Q2) X Factor Sports received a special order for 1,000 units of its extreme snowboards at a selling price of $60 per snowboard.X Factor Sports has enough extra capacity to accept the order.No additional selling costs will be incurred.
Unit costs to make and sell this product are as follows: Direct materials,$34; direct labor,$8; variable manufacturing overhead,$14; fixed manufacturing overhead,$10,and variable selling costs,$2.
A)List the relevant costs.
B)What will be the change in operating income if X Factor Sports accepts the special order?
C)Should X Factor Sports accept the special order?
Q3) Which of the following is a sunk cost?
A)Operating costs for a new vehicle
B)Trade in value of old vehicle
C)Purchase price of new vehicle
D)Purchase price of vehicle to be traded in
Q4) What will Burr Hill's expected profit shortfall be if it charges $65/round?
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Chapter 9: The Master Budget and Responsibility Accounting
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Sample Questions
Q1) During April,Gordon Company had actual sales of $160,000 compared to budgeted sales of $190,000.Actual cost of goods sold was $105,000,compared to a budget of $125,500.Monthly operating expenses,budgeted at $28,000,totaled $25,000.Interest revenue of $2,500 was earned during April but had not been included in the budget.The performance report for April would show a net income variance of:
A)$4,000 Favorable.
B)($10,000)Unfavorable.
C)($4,000)Unfavorable.
D)($9,000)Unfavorable.
Q2) Which term below best fits "a technique dealing with 'what-if' scenarios"?
A)Operating budget
B)Master budget
C)Responsibility center
D)Sensitivity analysis
Q3) Budgets provide benchmarks that help managers evaluate performance.
A)True
B)False
Q4) Budgeting is helpful to plan for cash inflows and outflows.
A)True
B)False
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Chapter 10: Flexible Budgets and Standard Costs
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Sample Questions
Q1) Cassandra Designs makes chair cushions.The standard direct materials quantity is 1 pound per cushion at a cost of $2.50 per pound.The actual results for the production of 20,000 cushions was 1.25 pounds per cushion,at a cost of $2.40 per pound.Calculate the direct materials price variance and the direct materials efficiency variance.
Q2) The flexible budget variance arises because the number of units actually sold differs from the static budget units.
A)True
B)False
Q3) When calculating standard costs,what standards do direct materials and direct labor have?
A)Efficiency (quantity)standard
B)Flexible standard
C)Price standard
D)Both A and C
Q4) The flexible budget variance is the difference between the flexible budget and the static budget.
A)True
B)False
Q5) Identify five benefits of standard costs.
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Chapter 11: Performance Evaluation and the Balanced Scorecard
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155 Flashcards
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Sample Questions
Q1) An amusement park's games department which reports revenues and expenses is likely to be classified as a(n):
A)cost center.
B)investment center.
C)profit center.
D)revenue center.
Q2) Comparing actual results to the results of competitors and comparing actual results to industry standards would be an example of:
A)promoting goal congruence and coordination.
B)motivating managers.
C)providing feedback.
D)benchmarking.
Q3) A product line at Coca-Cola (such as the Diet Coke product line)is most likely treated as a(n):
A)cost center.
B)investment center.
C)profit center.
D)revenue center.
Q4) List and describe reasons why a company might choose to decentralize.
Page 13
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Chapter 12: Capital Investment Decisions and the Time
Value of Money
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Sample Questions
Q1) Which term below is best described as the "relationship among principle,interest rate,and time"?
A)Time value of money
B)Capital budgeting
C)Payback period
D)Annuity
Q2) The Future Value of $1 table is used to calculate how much $100 would be worth in 5 years.
A)True
B)False
Q3) Sierra Discount Drugstore bought a new high-speed photo printer for customers to be able to bring in their digital pictures to make high-quality prints.Its useful life is 6 years.The printer cost $8,170 and will generate annual cash inflows of $2,150.The residual value of the printer is $1,320.The payback period in years is closest to:
A)2.35.
B)3.19.
C)3.80.
D)4.41.
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Chapter 13: Statement of Cash Flows
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Sample Questions
Q1) What will appear in the operating activities section related to salary payable?
A)The increase of $3,000 will be added to net income.
B)The increase of $3,000 will be added to cost of goods sold.
C)The increase of $3,000 will be subtracted from cost of goods sold.
D)The increase of $3,000 will be subtracted from net income
Q2) For purposes of the statement of cash flows,"cash" includes cash on hand,cash in the bank and cash equivalents.
A)True
B)False
Q3) The overall total of the uses of cash for Jeremiah Corporation for the year was:
A)$ 8,000.
B)$23,500.
C)$34,500.
D)$42,500.
Q4) A payment of interest on a loan would be considered a:
A)cash outflow from operating activities.
B)cash outflow from investing activities.
C)cash outflow from financing activities.
D)cash outflow from depreciation.
Q5) Compute the change in accounts receivable for the year.
Page 15
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Chapter 14: Financial Statement Analysis
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Sample Questions
Q1) What would a vertical analysis report with respect to current year net income before income tax and income tax expense?
A)Net income before tax of 20% and income tax of 1.00% of net sales revenue
B)An increase of both net income before income tax and income tax of 20%
C)An increase of $24,000 in net income before tax
D)An increase of $120,000 from prior to current year
Q2) What is the company's times-interest-earned ratio for the current year?
A)0.70 times
B)3.00 times
C)2.00 times
D)1.00 times
Q3) Which of the following is the percentage change from Year 1 to Year 2?
A)20.00%
B)62.00%
C)120.00%
D)35.00%
Q4) In a vertical analysis of a balance sheet,total assets is assigned a percentage of 100.
A)True
B)False
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