Contemporary Issues in Managerial Accounting
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Course Introduction
This course examines the evolving landscape of managerial accounting, focusing on contemporary issues and innovative practices that impact decision-making in organizations. Students will explore topics such as sustainability accounting, the integration of advanced data analytics, modern performance measurement systems, ethical challenges, and the influence of globalization on internal reporting. Emphasis is placed on critically evaluating new trends and methodologies, understanding their implications for management strategy, and developing practical skills to address complex real-world accounting problems. Through case studies and current research, students will gain insight into how managerial accounting continues to adapt in a rapidly changing business environment.
Recommended Textbook
Managerial Accounting 3rd Canadian Edition by Karen W. Braun
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Page 2
Chapter 1: Introduction to Managerial Accounting
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Q1) IFRS stands for
A) International and Foreign Reporting Systems.
B) International Financial Reporting Standards.
C) Important Foreign Registering Systems.
D) International and Foreign Registering Standards.
Answer: B
Q2) Lean production systems typically produce large batches.
A)True
B)False
Answer: False
Q3) Managerial accounting reports are always prepared on a quarterly and annual basis.
A)True
B)False
Answer: False
Q4) The internal audit department reports directly to the subcommittee of the board of directors called the audit committee.
A)True
B)False
Answer: True
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Chapter 2: Building Blocks of Managerial Accounting
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Q1) All companies are either classified as service, merchandising, or manufacturing companies.
A)True
B)False
Answer: False
Q2) Differential cost is the difference in cost between two alternatives.
A)True
B)False
Answer: True
Q3) Which of the following represents a sunk cost?
A) A historical cost that is never relevant
B) A historical cost that is always relevant
C) An outlay expected to be incurred in the future
D) A cost that is relevant to any decision
Answer: A
Q4) A marginal cost is the cost of making one more unit of a product.
A)True
B)False
Answer: True
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Chapter 3: Cost Behaviour
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Sample Questions
Q1) The representation for total variable costs is
A) vx.
B) vx + f.
C) vx - f.
D) y = vx.
Answer: A
Q2) If the number of units produced equals the number of units sold for a manufacturer, both variable costing and absorption costing income statements will yield the same operating income.
A)True
B)False
Answer: True
Q3) Using variable costing, what is the variable cost of goods available for sale at Xenna Company for last month?
A) $1,532,250
B) $1,080,000
C) $1,225,800
D) $1,350,000
Answer: D
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Page 5
Chapter 4: Cost-Volume-Profit Analysis
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Q1) Samson Company currently sells its products for $50 per unit. Management is contemplating a 20% increase in the selling price for the next year. Variable costs are currently 40% of sales revenue and are not expected to change in dollar amount on a per unit basis next year (the company will pay the same amount for variable costs next year). Fixed expenses are $80,000 per year. What is the break-even point in units at the anticipated selling price per unit next year?
A) 2,222 units
B) 1,000 units
C) 2,000 units
D) 8,000 units
Q2) The operating leverage factor will be exactly "1" only if a company has no fixed costs. A)True
B)False
Q3) Contribution margin less fixed costs yields
A) operating income.
B) sales.
C) variable costs.
D) None of the above
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Chapter 5: Job Costing
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Q1) What is the total manufacturing cost of Job 787 using an actual overhead rate?
A) $17,100
B) $12,800
C) $15,500
D) $14,300
Q2) Sales revenue is $600,000; actual manufacturing overhead is $104,000; allocated manufacturing overhead is $95,000; and cost of goods sold before adjustment is $375,000. What is the actual gross profit?
A) $225,000
B) $234,000
C) $121,000
D) $216,000
Q3) Wesley Corporation charged Job 110 with $12,000 of direct materials and $13,500 of direct labour. Allocation for manufacturing overhead is 80% of direct labour costs. What is the total cost of Job 110?
A) $10,800
B) $42,375
C) $36,300
D) $25,500
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Chapter 6: Process Costing
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Q1) The "total physical units to account for" is the sum of the units in beginning WIP inventory plus the units in ending WIP inventory.
A)True
B)False
Q2) At the end of the year, what are the equivalent units for conversion costs for the Abbott Corporation if all manufacturing costs are added during the process?
A) 8,000
B) 9,600
C) 1,600
D) 4,800
Q3) If all direct materials are added at the beginning of the production process, and the units have made it 50% of the way through the production process, then the percentage completion for direct materials is
A) 0%.
B) 100%.
C) 50%.
D) none of the above.
Q4) Compare and contrast process costing and job order costing.
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Chapter 7: Activity Based Costing
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Q1) Which of the following is NOT likely to be a cost driver of activities associated with determining product cost?
A) Number of accountant's labour hours
B) Number of material requisitions
C) Number of product inspections
D) Number of production orders
Q2) At Green Bags Company the plantwide manufacturing overhead rate would be closest to
A) $50.68 per machine hour.
B) $150.00 per machine hour.
C) $193.00 per machine hour.
D) $225.00 per machine hour.
Q3) Why are the benefits of adopting ABC/ABM higher for companies in competitive markets?
A) Because ABM can pinpoint opportunities for cost savings
B) Because accounting /information system expertise is inexpensive to develop
C) Because accurate product cost information is not as relevant for price setting
D) Because companies in competitive markets have low indirect costs
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9
Chapter 8: Short-Term Business Decisions
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Sample Questions
Q1) Which of the following describes the target total cost?
A) Revenue at market price minus desired profit
B) Revenue at market price plus desired profit
C) Total cost plus desired profit
D) Total cost minus actual cost
Q2) An opportunity cost is a past cost that is given up because an alternative course of action is taken.
A)True
B)False
Q3) Which is not a consideration for dropping a product or product line?
A) Whether the product has a positive or negative contribution margin
B) If dropping the product or product line will affect sales of remaining products
C) Not having the need for free capacity
D) Determining if direct fixed costs could be avoided if the product or product line is dropped
Q4) Qualitative factors play an important part in make or buy decisions.
A)True
B)False
Q5) What the reasons a firm would adopt target costing?
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Chapter 9: The Master Budget and Responsibility Accounting
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Q1) What is the ending cash balance for March after borrowing, if required?
A) $4,000
B) $3,800
C) $3,200
D) $2,800
Q2) Which of the following would be shown on an operating budget?
A) Cash dividends and bad debt expense
B) Bad debt expense and depreciation expense
C) Cash dividends and depreciation expense
D) Cash dividends and direct material purchases
Q3) When developing the budgets each year, most companies use
A) a top-down approach.
B) zero-based budgets.
C) participative budgeting.
D) slack-based budgets.
Q4) What will be the Fair Score Company budgeted amount of cost of goods sold?
A) $8,160,000
B) $6,800,000
C) $6,460,000
D) $6,120,000
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Chapter 10: Flexible Budgets and Standard Costs
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Q1) What is the actual direct material quantity used per batch for Brownies at YumYum Corporation?
A) 4.0 kg
B) 2.0 kg
C) 0.5 kg
D) 3.0 kg
Q2) The direct materials price variance is (standard price/ divided units) times actual unit output.
A)True
B)False
Q3) What is the direct materials efficiency variance at Sunset Beverages?
A) $675 favourable
B) $675 unfavourable
C) $600 favourable
D) $600 unfavourable
Q4) Price variances for direct materials and direct labour show how changes in the usage of raw materials and labour affect a company's profits.
A)True
B)False
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Chapter 11: Performance Evaluation and the Balanced Scorecard
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Sample Questions
Q1) What is the Beverage Division's profit margin?
A) 250.00%
B) 50.00%
C) 20.00%
D) 8.57%
Q2) Decentralization helps keep a company's costs down since each business unit may have its own purchasing department.
A)True
B)False
Q3) What is the First Electronics Corporation cell phone division's asset turnover?
A) 2.0
B) 3.3
C) 4.0
D) 6.7
Q4) Discuss two potential problems associated with decentralization.
Q5) What is the Light Bulb Division's Return on Investment (ROI)?
A) 25%
B) 10%
C) 30.6%
D) 18.33%
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Chapter 12: Capital Investment Decisions and the Time
Value of Money
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Q1) Shirt Company wants to purchase a new cutting machine for its sewing plant. The investment is expected to generate annual cash inflows of $300,000 recognized at the end of each year. The required rate of return is 12 percent and the new machine is expected to last for 4 years. What is the maximum dollar amount Shirt Company would be willing to spend for the machine?
A) $720,600
B) $791,740
C) $911,205
D) $957,600
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) The payback period for the Indiana proposal is closest to
A) 3.6 years.
B) 4.5 years.
C) 4.8 years.
D) 36.0 years.
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