Business Decision Making Test
Questions
Course Introduction
Business Decision Making explores the processes and tools managers use to analyze data, assess alternatives, and implement effective solutions in dynamic business environments. The course covers decision-making models, risk assessment, problem-solving strategies, and the impact of uncertainty and ethics on decisions. Students learn to use quantitative and qualitative techniques to support strategic choices, enhance operational effectiveness, and drive organizational success. Real-world case studies and simulations are employed to develop critical thinking and analytical skills essential for making informed and responsible business decisions.
Recommended Textbook
Managerial Accounting 13th Edition by Carl Warren
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14 Chapters
2568 Verified Questions
2568 Flashcards
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Page 2
Chapter 1: Managerial Accounting Concepts and Principles
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201 Verified Questions
201 Flashcards
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Sample Questions
Q1) Prime costs are the combination of direct materials and direct labor costs.
A)True
B)False
Answer: True
Q2) Sprinkles for decoration indirect material
A)Prime costs
B)Conversion costs
C)Both prime and conversion costs
D)Neither prime or conversion costs
Answer: B
Q3) Which of the following costs are conversion costs?
A)direct labor cost and factory overhead cost
B)direct materials cost and direct labor cost
C)factory overhead cost
D)direct materials cost and factory overhead cost
Answer: A
Q4) Managerial accounting information includes both historical and estimated data.
A)True
B)False
Answer: True
Page 3
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Chapter 2: Job Order Costing
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195 Verified Questions
195 Flashcards
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Sample Questions
Q1) Costs that are treated as assets until the product is sold are
A)product costs
B)period costs
C)conversion costs
D)selling expenses
Answer: A
Q2) applied overhead is more than actual overhead incurred
A)job order cost system
B)process cost system
C)activity-based costing
D)under applied overhead
E)over applied overhead
F)finished goods ledger
G)materials ledger
Answer: E
Q3) If factory overhead applied exceeds the actual costs, overhead is said to be under applied.
A)True
B)False
Answer: False
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Chapter 3: Process Cost Systems
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198 Flashcards
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Sample Questions
Q1) The FIFO method separates work done on beginning inventory in the previous period from work done on it in the current period.
A)True
B)False
Answer: True
Q2) Kramer Company started its production operations on August 1.During August, the Printing Department completed 17,600 units.There were 4,400 units in ending inventory which were 80% complete with respect to materials and 10% complete with respect to conversion costs.During August, the department accumulated materials costs of $45,408 and conversion costs of $76,670.
Required:
a Calculate the cost of the goods transferred out.
b What is the value of the ending inventory?
Answer: Cost per equivalent unit for materials = $45,408/[17,600 + 80% × 4,400] = $2.15
Cost per equivalent unit for conversion costs = $76,670/[17,600 + 10% × 4,400] = $4.25
a $2.15 + $4.25 × 17,600 = $112,640
b $2.15 × 80% × 4,400 + $4.25 × 10% × 4,400 = $9,438
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Page 5
Chapter 4: Cost Behavior and Cost-Volume-Profit Analysis
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225 Verified Questions
225 Flashcards
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Sample Questions
Q1) What was Carter Co.'s sales mix last year?
A)20% Arks, 80% Bins
B)12% Arks, 28% Bins
C)70% Arks, 30% Bins
D)40% Arks, 20% Bins
Q2) Cost behavior refers to the manner in which
A)a cost changes as the related activity changes
B)a cost is allocated to products
C)a cost is used in setting selling prices
D)a cost is estimated
Q3) Remain the same in total dollar amount as the level of activity changes
A) Relevant range
B) Break-even point
C) Contribution margin
D) Fixed costs
E) Variable costs
Q4) Garmo Co.has an operating leverage of 5.Next year's sales are expected to increase by 10%.The company's operating income will increase by 50%.
A)True
B)False
Page 6
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Chapter 5: Variable Costing for Management Analysis
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160 Flashcards
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Sample Questions
Q1) Which of the following would be included in the cost of a product manufactured according to absorption costing?
A)advertising expense
B)sales salaries
C)depreciation expense on factory building
D)office supplies costs
Q2) What is the amount of the gross profit that would be reported on the absorption costing income statement?
A)$21,000
B)$18,900
C)$27,900
D)$18,000
Q3) The contribution margin ratio is computed as:
A)sales divided by contribution margin
B)contribution margin divided by sales
C)contribution margin divided by cost of sales
D)contribution margin divided by variable cost of sales
Q4) The contribution margin and the manufacturing margin are usually equal.
A)True
B)False
Page 7
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Chapter 6: Budgeting
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Sample Questions
Q1) The budgeted finished goods inventory and cost of goods sold for a manufacturing company for the year are as follows: January 1 finished goods, $765,000; December 31 finished goods, $540,000; and cost of goods sold for the year, $2,560,000.The budgeted costs of goods manufactured for the year is
A)$1,255,000
B)$2,335,000
C)$2,785,000
D)$3,100,000
Q2) Budgeted production for product XXX during the month is
A)498,000 units
B)502,000 units
C)534,000 units
D)566,000 units
Q3) The cash collections in November are
A)$317,750
B)$389,750
C)$490,000
D)$410,000
Q4) What is a cash budget? How does management use a cash budget?
Q5) What is a capital expenditures budget?
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Chapter 7: Performance Evaluation Using Variances From
Standard Costs
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175 Verified Questions
175 Flashcards
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Sample Questions
Q1) The amount of the variable factory overhead controllable variance is
A)$2,000 unfavorable
B)$3,000 favorable
C)$0
D)$3,000 unfavorable
Q2) While setting standards, managers should never allow for spoilage or machine breakdowns in their calculations.
A)True
B)False
Q3) Accounting systems that use standards for product costs are called budgeted cost systems.
A)True
B)False
Q4) An unfavorable fixed factory overhead volume variance may be due to a failure of supervisors to maintain an even flow of work.
A)True
B)False
Q5) Compute the direct materials price and quantity variances for Taylor Company.
Q6) Compute the direct labor rate and time variances for Taylor Company.
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Chapter 8: Performance Evaluation for Decentralized Operations
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218 Flashcards
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Sample Questions
Q1) The net income for Train Corporation is
A)$83,180
B)$35,940
C)$48,390
D)$60,840
Q2) Division A reported income from operations of $975,000 and total service department charges of $675,000.As a result,
A)net income was $300,000
B)the gross profit margin was $300,000
C)income from operations before service department charges was $1,650,000
D)consolidated net income was $300,000
Q3) Which of the following expenses incurred by a department store is an indirect expense?
A)insurance on merchandise inventory
B)sales salaries
C)depreciation on store equipment
D)salary of vice president of finance
Q4) Office salaries expense for a department store is an indirect expense.
A)True
B)False
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Chapter 9: Differential Analysis, Product Pricing, and
Activity-Based Costing
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175 Verified Questions
175 Flashcards
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Sample Questions
Q1) Which of the following reasons would cause a company to reject an offer to accept business at a special price?
A)The additional sale will not conflict with regular sales.
B)The additional sales will increase differential income.
C)The additional sales will not increase fixed expenses.
D)The additional sales will increase fixed expenses.
Q2) In addition to the differential costs in an equipment-replacement decision, the remaining useful life of the old equipment and the estimated life of the new equipment are important considerations.
A)True
B)False
Q3) What is the contribution margin per machine hour for Tales?
A)$4
B)$7
C)$28
D)$35
Q4) Make-or-buy decisions should be made only with related parties.
A)True
B)False
11
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Chapter 10: Capital Investment Analysis
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190 Flashcards
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Sample Questions
Q1) The average rate of return for this investment is
A)5%
B)10.5%
C)25%
D)15%
Q2) A qualitative characteristic that may impact upon capital investment analysis is the impact of investment proposals on product quality.
A)True
B)False
Q3) Which of the following would not be considered a good managerial tool in making a decision for determining a capital investment?
A)evaluating further assets that are dissimilar in nature or have different useful lives
B)using only quantitative measures to evaluate asset purchases
C)analyzing lease versus purchase option
D)considering income tax ramifications
Q4) An 8-year project is estimated to cost $400,000 and have no residual value.If the straight-line depreciation method is used and the average rate of return is 5%, determine the estimated annual net income.
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Chapter 11: Cost Allocation and Activity-Based Costing
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110 Flashcards
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Sample Questions
Q1) Determine the overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc.uses a multiple department rate system.
A)$396.80 per unit
B)$425.60 per unit
C)$320.00 per unit
D)$214.40 per unit
Q2) Bob's Biscuit Corporation budgeted $1,200,000 of factory overhead cost for the coming year.Its plantwide allocation base, machine hours, is budgeted at 100,000 hours.Budgeted units to be produced are 200,000 units.Bob's plantwide factory overhead rate is $12.00 per machine hour.
A)True
B)False
Q3) Use of a plantwide factory overhead rate assumes that the activities causing overhead costs are different across different departments and products.
A)True
B)False
Q4) Explain why it is imperative that proper factory overhead be allocated in factories that produce multiple products.
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Chapter 12: Lean Principles, Lean Accounting, and Activity Analysis
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137 Flashcards
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Sample Questions
Q1) Which of the following is considered non-value-added lead time?
A)packing
B)moving from process to process
C)converting raw materials to finished product
D)all of the above
Q2) Costs of controlling quality include prevention costs and internal failure costs.
A)True
B)False
Q3) Which of the following is not an external failure cost?
A)warranty work
B)processing returned merchandise
C)rework
D)correcting invoice errors
Q4) In the lean principles philosophy, unexpected downtime is the result of unreliable processes.
A)True
B)False
Q5) From the above schedule, compute the percentage of non-value-added activities.
Q6) From the above schedule, calculate the internal failure costs.
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Chapter 13: Statement of Cash Flows
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Sample Questions
Q1) If $475,000 of bonds payable are sold at 101, $475,000 would be reported in the cash flows from financing activities section of the statement of cash flows.
A)True
B)False
Q2) Dividends received on investment
A)Operating activities
B)Financing activities
C)Investing activities
D)Schedule of noncash financing and investing
Q3) Purchasing equipment by issuing a six-month note should be shown on the statement of cash flows under the investing activities section.
A)True
B)False
Q4) Loss on sale of equipment
A)Operating activities
B)Financing activities
C)Investing activities
D)Schedule of noncash financing and investing
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Chapter 14: Financial Statement Analysis
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198 Flashcards
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Sample Questions
Q1) Which of the following ratios provides a solvency measure that shows the margin of safety of bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?
A)ratio of fixed assets to long-term liabilities
B)ratio of net sales to assets
C)number of days' sales in receivables
D)rate earned on stockholders' equity
Q2) ratio of liabilities to stockholders' equity
A)assess the profitability of the assets
B)assess the effectiveness in the use of assets
C)indicate the ability to meet currently maturing obligations
D)indicate the margin of safety to creditors
E)indicate instant debt-paying ability
F)assess the profitability of the investment by common stockholders
G)indicate future earnings prospects
H)indicate the extent to which earnings are being distributed to common stockholders
Q3) A clean audit opinion is the same as a qualified audit opinion.
A)True
B)False
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Page 16