Contemporary Topics in Managerial Accounting
Midterm Exam
Course Introduction
This course delves into current trends, theories, and practices in managerial accounting, with a focus on how accounting information supports internal decision-making in todays dynamic business environment. Students will explore advanced topics such as activity-based costing, strategic performance measurement, budgeting innovations, sustainability accounting, and the impact of digital transformation on managerial processes. Through case studies and real-world applications, the course emphasizes analytical skills, critical thinking, and the integration of ethical considerations in financial and managerial reporting. This prepares students to effectively interpret and use accounting data to drive organizational strategy and improve overall business performance.
Recommended Textbook
Managerial Accounting The Cornerstone of Business Decision Making 7th Edition by
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Maryanne M.
Chapter 1: Introduction to Managerial Accounting
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Sample Questions
Q1) Managerial accounting reports are prepared:
A) to provide creditors with information useful in making credit decisions.
B) to meet the needs of decision makers within the firm.
C) to present historical information.
D) all of these are correct.
Answer: B
Q2) Which of the following is true of managerial accounting?
A) Managerial accounting is the provision of accounting information for a company's external users.
B) Managerial accounting aims at providing information for controlling the organization's actions.
C) Managerial accounting provides historical information.
D) Managerial accounting is subject to rules for external financial reporting.
Answer: B
Q3) A __________________________ has passed a comprehensive examination designed to ensure technical competence and has two years of experience.
Answer: Certified Internal Auditor
CIA
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3
Chapter 2: Basic Managerial Accounting Concepts
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Sample Questions
Q1) Sugar used in soft drink production
A)Product cost
B)Period cost
Answer: A
Q2) Costs are subdivided into what two major functional categories?
A) opportunity and allocation
B) fixed and variable
C) product and non-production
D) direct and indirect
Answer: C
Q3) What was the per-unit conversion cost? (Note: Round answer to two decimal places.)
A) $218.75
B) $163.69
C) $162.54
D) $100.15
Answer: B
Q4) _____________________ is the way that a cost is linked to some cost object. Answer: Assigning costs
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Chapter 3: Cost Behavior, Cost Forecasting, and Segmented Income Statements
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Q1) Using the results of regression, calculate the variable rate of the electricity cost.
A) $6.39 per machine hour
B) $7.25 per machine hour
C) $5.75per machine hour
D) None of these are correct.
Answer: B
Q2) Botana Company constructed the following formula for monthly utility cost. Total utility cost = $1,200 + ($8.10 × labor hours)
Assume that 775 labor hours are budgeted for the month of April.
If Botana Company incurs 9,600 labor hours for the year, what would be the estimate of total utility cost?
A) $76,560
B) $78,960
C) $92,160
D) none of these are correct
Answer: C
Q3) The ___________________ income statement groups expenses according to function.
Answer: absorption-costing
Page 5
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Chapter 4: Job-Order Costing and Normal Cost Overhead Application
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Q1) Which of the following businesses uses a process costing system?
A) A printing business
B) A dental clinic
C) An interior designing firm
D) An automobile service center
E) A refinery
Q2) In a normal costing system, actual overhead is used to arrive at the cost of goods manufactured.
A)True
B)False
Q3) Production costs do not include
A) direct materials.
B) direct labor.
C) variable overhead.
D) fixed overhead.
E) All of these are production costs.
Q4) _________________________ is the amount that appears as an expense on the income statement after the adjustment for the period's overhead variance is recorded.
Q5) Applied overhead costs are charged to ________________.
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Chapter 5: Activity-Based Costing and Management
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Sample Questions
Q1) The identification and elimination of activities that fail to add value refers to
A) external failures.
B) activity reduction.
C) internal failures.
D) activity elimination.
Q2) The length of time it takes to produce a unit of output from the time raw materials are received until the good is delivered to finished goods inventory.
A)cycle time
B)direct tracing
C)activity sharing
D)driver tracing
E)value-added activities
F)activity selection
Q3) A volume-based costing system emphasizes direct tracing and driver tracing.
A)True
B)False
Q4) A ____________________ is classified as value-added provided it simultaneously meets three conditions.
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Chapter 6: Process Costing
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Sample Questions
Q1) Process costing is most appropriate for manufacturers of homogeneous products.
A)True
B)False
Q2) Which of the following is the unit cost of materials calculated using the weighted average method? (Note: Round answer to two decimal places.)
A) $4.50
B) $5.49
C) $5.00
D) $5.46
Q3) Two methods used to determine equivalent units of production in process costing are
A) weighted average and FIFO
B) FIFO and LIFO
C) weighted average and LIFO
D) weighted average and exact costing
Q4) Equivalent production expresses all activity of the period in terms of A) work in process
B) materials, labor and overhead
C) fully completed units
D) partially completed units
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Chapter 7: Cost-Volume-Profit Analysis
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Q1) A graph that depicts the relationships among cost, volume and profits (operating income) is the
A) Cost graph.
B) Volume graph.
C) Cost-volume-profit graph.
D) Profit-volume graph.
E) break-even graph.
Q2) The cost-volume profit graph depicts the relationships among cost, volume, and profits, by plotting the total revenue line and the total cost line on the graph.
A)True
B)False
Q3) Foster Company makes power tools.The budgeted sales are $420,000, budgeted variable costs are $147,000, and budgeted fixed costs are $227,500.What is the break-even point in sales dollars?
A) $350,000
B) $420,000
C) $650,000
D) $780,000
E) $567,000
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Chapter 8: Tactical Decision-Making and Relevant Costing
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Sample Questions
Q1) Which of the following works backward from the desired price to find the allowable cost?
A) Step costing
B) Differential costing
C) Target costing
D) Mixed costing
E) Overall costing
Q2) What is the contribution margin per unit of scarce resource (machine time) for Model P-4?
A) $6
B) $12
C) $24
D) $14
E) $28
Q3) What is the contribution margin of the product line?
A) $400,000
B) $525,000
C) $445,000
D) $515,000
Q4) The percentage that is applied to the base cost is known as the _____________.
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Chapter 9: Profit Planning and Flexible Budgets
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Q1) Atlas Company plans to sell 145,000 units in November and 190,000 units in December.Atlas's policy is that 15% of the following month's sales must be in ending inventory.On November 1, there were 21,750 units in inventory. It takes 35 minutes of direct labor time to make one unit.Direct labor wages average $19 per hour.Variable overhead is applied at the rate of $7 per direct labor hour.Fixed overhead is budgeted at $60,500 per month.What is the budgeted production in units for November?
A) 100,000 units
B) 140,000 units
C) 121,000 units
D) 125,600 units
E) 151,750 units
Q2) A strategic plan identifies strategies for future activities and operations, generally covering at least five years.
A)True
B)False
Q3) A firm acquires information that can be used to improve decision making from a budgetary system.
A)True
B)False
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Chapter 10: Standard Costing and Variance Analysis
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Q1) If actual fixed overhead was $54,000 and there was a $1,300 unfavorable spending variance and a $1,000 unfavorable volume variance, budgeted fixed overhead must have been
A) $56,300.
B) $50,300.
C) $53,000.
D) $52,700.
Q2) The actual quantity of input at the standard price less than the standard quantity of input at the standard price equals the usage variance.
A)True
B)False
Q3) The amount that should be paid for the quantity of the input to be used is known as the ______________.
Q4) The quantity of each input that should be used to produce one unit of output is documented on the standard cost sheet.
A)True
B)False
Q5) _________________ are capacity costs acquired in advance of usage.
Q6) ______________________ is a prerequisite for assigning responsibility.
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Chapter 11: Performance Evaluation and Decentralization
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Sample Questions
Q1) In negotiated transfer pricing, the selling division sets the ceiling (maximum possible transfer price) for the bargaining range.
A)True
B)False
Q2) A California hospital decided to streamline its surgical suite operation.In order to speed things up, the nurses in charge studied how much time patients actually spent in various activities.They found that on average, a patient scheduled for an operation spent about 1.50 hours waiting and 2.00 hours in moving from lab to x-ray to the operating room.The average operation takes 1.50 hours.What is the manufacturing cycle efficiency (MCE)?
A) 100%
B) 36%
C) 50%
D) 30%
E) 60%
Q3) Unlike ROI, residual income does not encourage a short-run orientation.
A)True
B)False
Q4) _____________ is the ratio of operating income to sales.
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Chapter 12: Capital Investment Decisions
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Q1) Net present value analysis and internal rate of return analysis can sometimes produce erroneous choices because they ignore the time value of money.
A)True B)False
Q2) The process of planning, setting goals and priorities, arranging financing, and using certain criteria to select long-term assets is called capital investment decisions.
A)True B)False
Q3) A disadvantage of the payback period is that it ignores a project's total profitability.
A)True B)False
Q4) A postaudit evaluates the overall outcome of the investment and proposes corrective action if needed.
A)True B)False
Q5) The process of making capital investment decisions often is referred to as ________________.
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in Forensicfraud Accounting
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Q1) A(n) _________ is the gain on the exchange of one currency for another due to appreciation of the home currency.
Q2) Which of the following is true of a residual risk?
A) A residual risk is a risk that exists absent of any risk management action to reduce or avoid the risk.
B) A residual risk is a risk that can be avoided by enacting some particular procedure to decrease the residual risk to a lower inherent risk level.
C) A residual risk is a risk that remains after any risk management action has been taken.
D) A residual risk is the probability or likelihood of a risk occurring multiplied by the impact should it actually occur.
Q3) Which of the following is true of risk response cost?
A) Risk response cost is not used to estimate the net benefit of each risk response alternative.
B) It is easy to accurately estimate risk response cost.
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C) Risk response cost includes only indirect costs.
D) It is the incremental cost incurred by the company to implement the given risk response.
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Chapter 14: Statement of Cash Flows
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Q1) Issued long-term debt
A)Operating Activity, Source of Cash
B)Operating Activity, Use of Cash
C)Investing Activity, Source of Cash
D)Investing Activity, Use of Cash
E)Financing Activity, Source of Cash
F)Financing Activity, Use of Cash
G)Non-cash Investing & Financing Activity
Q2) A loss on the sale of equipment is subtracted from net income in determining net cash from operating activities under the indirect method.
A)True
B)False
Q3) The Star City reported net loss of $50,000.Cash from operating activities
A) will be more than $50,000.
B) will be less than $50,000.
C) will be equal to $50,000.
D) cannot be determined without more information.
Q4) The __________________ computes operating cash flows by adjusting each line on the income statement to reflect cash flows.
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Chapter 15: Financial Statement Analysis
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Q1) Last year, Copper Company had a net income of $500,000, income tax expense of $60,000, and interest expense of $40,000.The company's times-interest-earned ratio was closest to:
A) 10 times.
B) 22 times.
C) 15 times.
D) 30 times.
Q2) Chromel Company has $36,000 in cash, $12,000 in marketable securities, $40,000 in accounts receivables, $25,000 in inventories, and $80,000 in current liabilities.The company's quick ratio is closest to:
A) 1.10.
B) 2.45.
C) 0.25.
D) 3.12.
Q3) In vertical analysis of the income statement, cost of goods sold is represented by 100%.
A)True
B)False
Q4) ______________ and ____________ are the two major sources of capital.
Q5) For meaningful analysis, ratios should be compared with a ____________.
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