Budgeting and Financial Planning Test
Questions
Course Introduction
This course introduces students to the fundamental principles and practices of budgeting and financial planning in both personal and organizational contexts. Key topics include the preparation and management of budgets, financial forecasting, analysis of financial statements, cost control strategies, and the use of budgeting as a decision-making tool. Through case studies and practical exercises, students will learn to develop effective financial plans, set realistic financial goals, monitor expenditures, and adapt to changing financial conditions. Emphasis is placed on understanding the role of budgeting in achieving organizational objectives and personal financial stability.
Recommended Textbook Managerial Accounting v. 2.1 by Kurt Heisinger and Joe Hoyle
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2
Chapter 1: What Is Managerial Accounting
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Sample Questions
Q1) In a wooden boat factory,which of the following would most likely be classified as indirect labor?
A)Salaries for the factory supervisors.
B)Salaries for sanding operators.
C)Salaries for production machine operators.
D)Salaries for staining and painting personnel.
E)None of the above.
Answer: A
Q2) All of the following are typically performed by a treasurer except:
A)preparing cost estimates for potential product lines.
B)obtaining sources of financing for an organization.
C)projecting cash flow needs.
D)managing cash and short-term investments.
E)None of the above.
Answer: A
Q3) The cost of completed goods transferred out of Work in Process Inventory to Finished Goods is called Cost of Goods Manufactured.
A)True
B)False
Answer: True
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Chapter 2: How Is Job Costing Used to Track Production Costs
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Sample Questions
Q1) The entry to record the requisition of indirect materials in a job cost system includes a:
A)debit to Work in Process Inventory.
B)debit to Manufacturing Overhead.
C)credit to Accounts Payable.
D)credit to Work in Process Inventory.
E)None of the answer choices is correct.
Answer: B
Q2) Nguyen Inc.applies overhead to products based on direct labor hours using normal costing.During 2016,total overhead costs were estimated to be $500,000.Actual overhead totaled $540,000 based on 32,000 actual direct labor hours.At the end of the year,overhead was overapplied by $20,000.Based on this information,what was the predetermined overhead rate used during 2016?
A)$16.88 per direct labor hour.
B)$16.25 per direct labor hour.
C)$15.63 per direct labor hour.
D)$17.50 per direct labor hour.
E)None of the answer choices is correct.
Answer: D
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Chapter 3: How Does an Organization Use Activity-Based
Costing to Allocate Overhead Costs
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Sample Questions
Q1) All of the following are methods of allocating overhead costs except:
A)department allocation.
B)activity-based allocation.
C)plantwide allocation.
D)product allocation.
E)None of the answer choices is correct.
Answer: D
Q2) Refer to Exhibit 3-1.What is the total overhead cost applied to Thirst Quench when all overhead is applied based on machine hours?
A)$45,000
B)$617
C)$8,514
D)$2,864
E)None of the answer choices is correct.
Answer: C
Q3) Both manufacturing and service organizations use activity-based costing.
A)True
B)False
Answer: True
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Chapter 4: How Is Process Costing Used to Track
Production Costs
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Sample Questions
Q1) Refer to Exhibit 4-1.What is the total cost of units transferred out?
A)$1,221,580
B)$1,150,420
C)$1,079,260
D)$1,082,900
E)None of the answer choices is correct.
Q2) In a process costing system,partially completed units in Work-in-Process Inventory are typically converted to equivalent completed units.
A)True
B)False
Q3) Refer to Exhibit 4-2.What is the cost per gallon for the packaging process?
A)$1.66
B)$1.78
C)$1.70
D)$1.56
E)None of the answer choices is correct.
Q4) A job costing system would be appropriate for an oil refinery.
A)True
B)False
6
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Chapter 5: How Do Organizations Identify Cost Behavior
Patterns
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Sample Questions
Q1) Refer to Exhibit 5-4.What is the estimate of total machine costs at Wayside when 3,700 machine hours are used?
A)$144,000
B)$70,000
C)$140,000
D)$74,000
E)None of the answer choices is correct.
Q2) Refer to Exhibit 5-1.What is the estimated total mixed cost at an operating level of 7,000 units?
A)$10,700
B)$16,500
C)$7,700
D)$8,000
E)None of the answer choices is correct.
Q3) The contribution margin income statement is used for internal reporting purposes and presents the fixed and variable components of cost information. A)True B)False
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Chapter 6: How Is Cost-Volume-Profit Analysis Used for Decision Making
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Sample Questions
Q1) Refer to Exhibit 6-4.Assume the sales mix remains the same at all levels of sales. What is the weighted average contribution margin per unit?
A)$44
B)$56
C)$100
D)$50
E)None of the answer choices is correct.
Q2) Refer to Exhibit 6-4.Assume the sales mix remains the same at all levels of sales. How many units of each product must be sold to break even?
A)Plane 22,400 units;Boat 5,600 units
B)Plane 11,200 units;Boat 2,800 units
C)Plane 20,000 units;Boat 5,000 units
D)Plane 56,000 units;Boat 14,000 units
E)None of the answer choices is correct.
Q3) Operating leverage refers to the level of fixed costs within an organization.
A)True
B)False
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Chapter 7: How Are Relevant Revenues and Costs Used to
Make Decisions
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Sample Questions
Q1) Refer to Exhibit 7-7.What is the contribution margin per unit of constrained resource for the Light product?
A)$65
B)$100
C)$260
D)$17
E)None of the answer choices is correct.
Q2) In which of the following cases is a customer most likely to be dropped?
A)When the customer's variable costs are more than its total fixed costs.
B)When the customer's avoidable fixed costs are more than its contribution margin.
C)When the customer's total fixed costs are more than its contribution margin.
D)When the customer's contribution margin is more than its avoidable fixed costs.
E)None of the answer choices is correct.
Q3) Joint products are two or more products produced from a single input.
A)True
B)False
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Chapter 8: How Is Capital Budgeting Used to Make Decisions
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Sample Questions
Q1) Which of the following is a benefit of using the payback method?
A)It considers the time value of money.
B)It considers the cash inflows after the initial cash outflows are recovered.
C)It measures profitability.
D)It determines how long it will take to recover the initial investment.
E)None of the answer choices is correct.
Q2) If a project's net present value is positive,the internal rate of return is:
A)less than the discount rate.
B)equal to the discount rate.
C)greater than the discount rate.
D)cannot be determined without more information.
E)None of the answer choices is correct.
Q3) There is a standard required rate of return for all companies,regardless of the industry.
A)True
B)False
Q4) Revenue and expense cash flows must be multiplied by one minus the tax rate to get the after-tax cash flow.
A)True
B)False
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Chapter 9: How Are Operating Budgets Created
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Sample Questions
Q1) All of the following appear on the direct labor budget except: A)units to be produced.
B)labor rate per hour.
C)direct labor hours per unit.
D)indirect labor hours per unit.
E)None of the answer choices is correct.
Q2) A direct labor budget is regarded as the starting point for the master budget. A)True B)False
Q3) Companies generally obtain sales forecasts from many different sources. A)True B)False
Q4) Refer to Exhibit 9-2.What dollar amount of merchandise inventory will be purchased in April?
A)$957,000
B)$528,000
C)$1,452,000
D)$1,023,000
E)None of the answer choices is correct.
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Chapter 10: How Do Managers Evaluate Performance Using Cost Variance Analysis
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Sample Questions
Q1) Refer to Exhibit 10-2.What is the standard cost per unit for variable manufacturing overhead?
A)$16.00
B)$4.80
C)$1.44
D)$10.00
E)None of the answer choices is correct.
Q2) If an analysis shows an unfavorable materials price variance of $22,000,the journal entry to record the purchase of direct materials and the related price variance would include:
A)a debit to Accounts Payable for $22,000.
B)a debit for $22,000 to Materials Price Variance.
C)a credit for $22,000 to Materials Price Variance.
D)a credit to Work in Process Inventory for $22,000.
E)None of the answer choices is correct.
Q3) In the planning phase of budgeting,managers evaluate the company's performance by comparing budgeted amounts to actual results.
A)True
B)False
Page 12
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Chapter 11: How Do Managers Evaluate Performance in
Decentralized Organizations
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Sample Questions
Q1) Which of the following best describes an advantage of decentralization from the company's perspective?
A)Decentralization allows decisions to be made more quickly at the division level.
B)Managers at the division level might make decisions that are in their best interest even if the decision is not in the best interest of the company as a whole.
C)Decentralization allows top-level management at a corporate headquarters to work with division managers in making day-to-day decisions at the division level.
D)Decentralization allows for the duplication of administrative services.
E)None of the answer choices is correct.
Q2) Refer to Exhibit 11-4.What is the ROI for the Couch Division (rounded to the nearest tenth of a percent)?
A)22.0%
B)9.0%
C)5.5%
D)12.5%
E)None of the answer choices is correct.
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Chapter 12: How Is the Statement of Cash Flows Prepared and Used
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Sample Questions
Q1) Refer to Exhibit 12-2.Which of these items would appear in the investing activities section of the statement of cash flows?
A)1,3,4,& 6
B)1 & 5
C)2 & 3
D)4 & 6
E)None of the answer choices is correct.
Q2) Only information from the income statement is needed to make adjustments when preparing the operating activities section of the statement of cash flows using the indirect method.
A)True
B)False
Q3) Refer to Exhibit 12-5.How will the change in accounts payable be reported in the operating activities section of the statement of cash flows?
A)The decrease of $40,000 will be subtracted from net income.
B)The decrease of $40,000 will be subtracted from sales revenue.
C)The decrease of $40,000 will be added to sales revenue.
D)The decrease of $40,000 will be added to net income.
E)None of the answer choices is correct.
Page 14
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Chapter 13: How Do Managers Use Financial and
Nonfinancial Performance Measures
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Sample Questions
Q1) Which of the following is the best explanation of a company's inventory turnover of 12.0 for the year 2017?
A)the company averages about 12 months' sales in inventory.
B)The company averages about 12 days' sales in inventory.
C)The company averages about one month's sales in inventory.
D)The company averages about 12 days from the time an item is sold until the cash is collected.
E)None of the answer choices is correct.
Q2) A trend percentage is calculated as the current year divided by the base year.
A)True
B)False
Q3) If net sales is growing at a greater rate than cost of goods sold,which of the following will always be true?
A)The gross margin ratio will decrease.
B)The gross margin ratio will increase.
C)Net income will increase.
D)Net income will decrease.
E)None of the answer choices is correct.
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