Financial Planning and Analysis Exam Practice Tests
Course Introduction
Financial Planning and Analysis introduces students to the essential concepts, tools, and strategies used to evaluate financial data, create forecasts, and support business decision-making. This course covers the fundamentals of budgeting, financial modeling, performance analysis, and reporting, with an emphasis on interpreting financial statements and applying quantitative techniques to assess organizational health. Students learn to align financial goals with long-term business strategy, manage risk, and use financial insights to drive value creation within an organization. Through case studies and practical exercises, students develop analytical skills critical for careers in finance, accounting, or business management.
Recommended Textbook Cornerstones of Cost Accounting 1st Edition by Don R. Hansen
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2433 Verified Questions
2433 Flashcards
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Chapter 1: Introduction to Cost Management
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115 Flashcards
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Sample Questions
Q1) The internal auditor performs a
A) line function.
B) staff function.
C) production function.
D) marketing function.
Answer: B
Q2) Financial accounting information is used for
A) investment decisions.
B) regulatory measures.
C) stewardship evaluation.
D) all of these.
Answer: D
Q3) Continuous improvement is
A) critical in a dynamic environment.
B) important to finding and maintaining a competitive advantage.
C) an effort to find ways to increase overall efficiency, improve quality, and reduce costs.
D) all of these.
Answer: D
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Chapter 2: Basic Cost Management Concepts
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161 Flashcards
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Sample Questions
Q1) Cost of goods sold equals cost of goods manufactured
A) when finished goods inventories remain constant.
B) when work-in-process inventories remain constant.
C) plus beginning work-in-process inventory minus ending work-in-process inventory.
D) when materials inventories remain constant.
Answer: A
Q2) The ending work-in-process inventory is deducted on the A) balance sheet.
B) statement of cost of goods manufactured.
C) income statement.
D) statement of cash flows.
Answer: B
Q3) Which of the following costs would be considered a direct material?
A) glue in the production of automobiles
B) labor used to finish product
C) depreciation on the corporation's office building
D) paper used in the production of books
Answer: D
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4
Chapter 3: Cost Behavior
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132 Flashcards
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Sample Questions
Q1) Which of the following is an example of a committed fixed expense?
A) depreciation on a factory building
B) supervisor's salary
C) direct labor
D) insurance on a building
Answer: A
Q2) Refer to Figure 3-2.What is the cost of resource usage?
A) $300,000
B) $240,000
C) $30
D) $60,000
Answer: B
Q3) Refer to Figure 3-8.The degrees of freedom for the model is
A) 157.
B) 158.
C) 159.
D) 160.
Answer: A
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Chapter 4: Activity-Based Costing
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154 Flashcards
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Sample Questions
Q1) A(n)_______________ is a grouping of logically related information.
A) data set
B) activity driver
C) cost objective
D) both a and c
Q2) Refer to Figure 4-20.What are the global consumption ratios of X and Y respectively? (round to two decimal places)
A) 0.20; 0.80
B) 0.42; 0.58
C) 0.56; 0.44
D) 0.84; 0.16
Q3) A(n) _______________ method first traces costs to a department and then to products.
A) direct costing
B) absorption costing
C) unit-based costing
D) indirect costing
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6
Chapter 5: Product and Service Costing: Job-Order System
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102 Flashcards
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Sample Questions
Q1) Which of the following firms would make extensive use of service costing?
A) auto manufacturer
B) furniture manufacturer
C) auto dealer
D) CPA firm
Q2) Manufacturers producing unique or customized products would employ a(n)
A) process costing system.
B) job-costing system.
C) homogeneous costing system.
D) all of these.
Q3) Refer to Figure 5-8.The ending work in process would consist of the costs of what jobs?
A) Job 102 + Job 103
B) Job 101 + Job 104
C) Job 101 + Job 102 + Job 103 + Job 104
D) Job 101 + Job 102 + Job 103
Q4) Compare and contrast perishability and intangibility in an automobile oil lubrication shop and architectural design firms.
Q5) Why are unit costs important? Why do full-cost unit costs change from accounting period to accounting period.
7
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Chapter 6: Process Costing
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Sample Questions
Q1) Refer to Figure 6-19.Rounded to two decimal places, Takon's cost per equivalent units for transferred-in costs using weighted average would be
A) $49.00.
B) $50.00.
C) $57.14.
D) $66.67.
Q2) Refer to Figure 6-8.Beginning and ending units were 60 percent converted.How many equivalent units for materials would there be using the FIFO method?
A) 36,000 units
B) 34,000 units
C) 30,000 units
D) 29,200 units
Q3) Refer to Figure 6-20.What is CUPORAMA's total cost for Casts in April?
A) $13,750
B) $26,275
C) $28,750
D) $70,000
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Chapter 7: Allocating Costs of Support Departments and Joint Products
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143 Flashcards
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Sample Questions
Q1) Assuming the direct method is used and the purpose is performance evaluation, support department costs allocated to Department X are
A) $45,000.
B) $40,000.
C) $36,400.
D) $36,000.
Q2) A possible causal factor to use when allocating cafeteria costs would be
A) number of square feet.
B) number of direct labor hours.
C) number of employees.
D) appraised value of square footage.
Q3) The split-off point can best be defined as
A) the point at which a secondary product is recovered in the course of manufacturing a primary product.
B) the point at which you can get more of one product and less of another product.
C) the point in the production process where no further processing is needed.
D) the point at which joint products become separate and identifiable.
Q4) Compare and contrast the various methods of accounting for joint product costs.
Page 9
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Chapter 8: Budgeting for Planning and Control
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Sample Questions
Q1) Refer to Figure 8-8.The static budget variance for supervision is
A)$50 U.
B)$50 F.
C)100 U.
D)100 F.
Q2) Refer to Figure 8-3.How many units of wood are expected to be used in production during the second month?
A) 12,500 units
B) 10,000 units
C) 15,000 units
D) 12,000 units
Q3) Refer to Figure 8-7.What are the total assets at the end of July?
A) $439,000
B) $446,500
C) $515,500
D) $654,500
Q4) Discuss the features of an ideal budgetary process.
Q5) Define budgeting and control.How are budgets used in planning? How are budgets used to control? What are some of the reasons for budgeting?
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Chapter 9: Standard Costing: a Functional-Based Control Approach
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Sample Questions
Q1) Price/rate variances focus on the differences between
A) actual and standard inputs multiplied by actual prices.
B) actual and standard unit prices of an input multiplied by the actual quantity of inputs.
C) actual and standard inputs multiplied by standard prices.
D) actual and standard unit prices of an input multiplied by the budgeted quantity of inputs.
Q2) Harry Company's standard variable overhead rate is $6 per direct labor hour, and each unit requires 2 standard direct labor hours.During March, Harry recorded 6,000 actual direct labor hours, $37,000 actual variable overhead costs, and 2,900 units of product manufactured. What is the variable overhead efficiency variance for March for Harry?
A) $2,200 (U)
B) $2,200 (F)
C) $600 (U)
D) $1,200 (U)
Q3) How are standards developed? What is the difference between ideal and currently attainable standards?
Q4) Compare and contrast mix and yield variances.
Page 11
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Chapter 10: Decentralization: Responsibility Accounting, Performance Evaluation,
and Transfer Pricing
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) What is EVA for Division A?
A) $40,000
B) $25,000
C) $15,000
D) $28,000
Q2) Which of the following departments would NOT be classified as a profit center?
A) hardware department
B) men's shoes department
C) accounting department
D) automotive department
Q3) The manager of an investment center is responsible for
A) decisions regarding costs.
B) decisions regarding revenues.
C) decisions to invest in assets.
D) all of these.
Q4) An example of an investment center is a
A) production department.
B) company.
C) marketing department.
D) credit department.
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Chapter 11: Strategic Cost Management
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121 Verified Questions
121 Flashcards
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Sample Questions
Q1) Which of the following is NOT a stage of the marketing viewpoint of the product life cycle?
A) decline
B) growth
C) maturity
D) production
Q2) The industry value chain includes
A) shareholder value chain activities as well as firm activities.
B) buyer and supplier value chain activities as well as firm activities.
C) only firm activities.
D) only firm production activities.
Q3) ____________ manufacturing reduces inventory levels because production is geared to demand.
A) Traditional
B) Conventional
C) JIT
D) Both a and b
Q4) Explain the difference between acceptable quality level and total quality control.
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Page 13
Chapter 12: Activity-Based Management
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Sample Questions
Q1) The budgeted inspection cost for 20 setups is
A) $175,860.
B) $40,000.
C) $34,000.
D) $30,000.
Q2) What is process value analysis?
Q3) The continuous improvement subcycle of Kaizen costing is defined by what sequence?
A) check-do-plan-act
B) do-check-plan-act
C) plan-do-check-act
D) None of these is the correct sequence.
Q4) The non-value-added costs are
A) $-0-.
B) $75,000.
C) $150,000.
D) $225,000.
Q5) What is Kaizen costing? How does activity analysis help reduce costs?
Q6) Describe how activity-based management and activity-based costing systems differ.
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Chapter 13: The Balanced Scorecard: Strategic-Based Control
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Sample Questions
Q1) Puma Manufacturing has a theoretical capability to produce 20,250 copiers per quarter but currently produces 10,125 copiers.The conversion cost per quarter is $4,860,000.There are 6,750 production hours available within the plant per quarter.In addition to the processing minutes per unit used, the production of copiers uses 12 minutes of move time, 8 minutes of wait time, and 10 minutes of rework time.(All work is done by cell workers.)
Required:
a.Compute the theoretical and actual velocities per hour and the theoretical and actual cycle times (minutes per unit produced).
b.Compute the ideal and actual amounts of conversion cost assigned to each printer.
c.Calculate the MCE.
d.If poor employee training is the root cause of wait time and move time, develop an improvement strategy as a series of if-then statements that will reduce the conversion cost per printer.
Q2) Why does the Balanced Scorecard differ from company to company? Whose responsibility is the implementation?
Q3) Compare and contrast activity-based measures and strategic-based measures.
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Page 15
Chapter 14: Quality and Environmental Cost Management
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Sample Questions
Q1) Assume the multiplier method is used and the multiplier is determined to be 3 based on experience.Accounting records show that the measured external failure costs are $400,000.Then the hidden external failure costs are estimated to be
A) $133,334.
B) $400,000.
C) $800,000.
D) $1,200,000.
Q2) Warranty work is a(n)
A) external failure cost.
B) internal failure cost.
C) appraisal cost.
D) prevention cost.
Q3) What is the energy usage cost per unit of Product X2?
A) $0.096
B) $0.064
C) $0.032
D) $0.160
Q4) Define environmental costs and identify the four categories of environmental costs.Give an example of each category.
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Chapter 15: Lean Accounting and Productivity Measurement
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Sample Questions
Q1) Which of the following conditions is NOT an example of technical efficiencies?
A) More output; fewer inputs
B) Same output; fewer inputs
C) More output; same inputs
D) Less output; less inputs
Q2) Explain the difference between partial and total measures of productivity.
Q3) Which is NOT a benefit of lean manufacturing?
A) increased productivity
B) reduced lead times
C) reduced direct labor costs
D) reductions in inventory
Q4) _______________ is(are) productivity measure(s) that are expressed in physical terms.
A) Financial productivity measures
B) Operational productivity measures
C) Partial productivity measurement
D) Productivity measurement
Q5) Explain the difference between technical and input trade-off efficiency.
Q6) Describe the objectives and characteristics of a Lean Manufacturing system.
Q7) Discuss the advantages and disadvantages of partial productivity measures. Page 17
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Page 18
Chapter 16: Cost-Volume-Profit Analysis
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Sample Questions
Q1) Sales ´ Contribution Margin is a short-cut of what formula?
A) Sales - (Variable cost ratio ´ Sales)
B) Sales - (Fixed Costs + Variable Costs)
C) Sales / Fixed Costs
D) Fixed Costs / Unit Contribution Margin
Q2) In the cost-volume-profit analysis, income taxes
A) are treated as a fixed cost.
B) increase the sales volume required to break even.
C) increase the sales volume required to earn a desired profit.
D) Are treated as a fixed cost.
Q3) The difference between line AB and line AC (area BAC) is the
A) contribution ratio.
B) total variable cost.
C) contribution margin per unit.
D) total fixed cost.
Q4) What is the profit when one unit more than the break-even point is sold?
A) $150
B) $60
C) $1,500,150
D) $600,060
Page 19
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Chapter 17: Activity Resource Usage Model and Tactical Decision Making
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Sample Questions
Q1) The operating income for EWIN would be
A) $9,000.
B) $13,840.
C) $19,000.
D) $27,000.
Q2) Assume that product C is discontinued and the extra space is rented for $300 per month.All other information remains the same as the original data.Annual profits will
A) increase by $75.
B) decrease by $75.
C) increase by $525.
D) remain the same.
Q3) Relevant costs are
A) past costs.
B) future costs.
C) full costs.
D) cost drivers.
Q4) What are relevant costs? How do they relate to decision making?
Q5) How is understanding of committed resources and flexible resources important to the activity resource usage model? How does this relate to relevance?
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Chapter 18: Pricing and Profitability Analysis
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Sample Questions
Q1) What is the segment margin for Division B?
A) $155,000
B) $105,000
C) $55,000
D) $20,000
Q2) Grass Valley Mining mines three products.Gold ore sells for $1,000 per ton, variable costs are $600 per ton, and fixed mining costs are $250,000.The segment margin for 2011 was $(100,000).The management of Grass Valley Mining was considering dropping the mining of gold ore.Only one-half of the fixed expenses are direct and would be eliminated if the segment was dropped. What were the sales (in tons) for 2011?
A) 375 tons
B) 1,000 tons
C) 250 tons
D) 200 tons
Q3) A disadvantage of absorption costing is
A) that it is not a useful format for decision making.
B) that it might encourage inventory build up.
C) both a and b.
D) none of these.
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Page 21
Chapter 19: Capital Investment
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Sample Questions
Q1) The accounting rate of return on original investment is calculated as A) original investment/net income.
B) net income/debt.
C) average income/original investment.
D) assets/debt.
Q2) A firm is considering a project requiring an investment of $200,000.The project would generate an annual cash flow of $55,478 for the next five years.The company uses the straight-line method of depreciation with no mid-year convention.Ignore income taxes.The approximate internal rate of return for the project is
A) 9%.
B) 10%.
C) 12%.
D) 16%.
Q3) The present value of $4,000 to be received three years from now and earning a 12 percent return (rounded) is
A) $2,848.
B) $2,520.
C) $4,880.
D) $5,440.
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Chapter 20: Inventory Management: Economic Order
Quantity, Jit, and the Theory of Constraints
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Sample Questions
Q1) Which of the following equations determines the total annual carrying costs when no safety stock is kept?
A) Cost of placing an order ´ Order quantity
B) Cost of placing an order ´ Number of orders per year
C) Cost of placing an order ´ One-half of the order quantity
D) Unit carrying costs per year ´ One-half of the order quantity
Q2) Big Bus Company produces buses.In order to produce the seats for the buses, special equipment must be set up.The setup cost per frame is $40.The cost of carrying seats in inventory is $5 per seat per year.The company produces 100,000 buses per year.
Total setup costs associated with the economic order quantity are
A) $3,953.
B) $3,612.
C) $3,162.
D) $1,778.
Q3) A linear programming model would NOT include which of the following items?
A) independent variables
B) networks
C) dependent variables
D) objective function
Page 23
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