Financial Planning and Analysis
Question Bank
Course Introduction
Financial Planning and Analysis is a foundational course that equips students with the skills and knowledge necessary to assess an organization's financial health and drive strategic decision-making. The course covers financial forecasting, budgeting processes, variance analysis, and the application of key financial metrics. Students will learn how to construct and interpret financial models, evaluate business performance, and support management in optimizing resource allocation. Emphasizing practical applications, this course prepares students to contribute to organizational success through effective financial planning, analysis, and communication of financial insights.
Recommended Textbook Managerial Accounting The Cornerstone of Business Decision Making 7th Edition by Maryanne
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Page 2
M.
Chapter 1: Introduction to Managerial Accounting
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Sample Questions
Q1) Which of the following would occupy a line position in a hospital?
A) manager of the cafeteria
B) hospital administrator
C) chief of surgery
D) none of these
Answer: C
Q2) The belief that each member of a group bears no responsibility for the well-being of other members is a common principle underlying all ethical systems.
A)True
B)False
Answer: False
Q3) The managerial activity of monitoring a plan's implementation and taking corrective action as needed is referred to as ______________.
Answer: controlling
Q4) _____________________________ is the continual search for ways to increase the overall efficiency and productivity of activities by reducing waste, increasing quality and managing costs.
Answer: Continuous improvement
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Chapter 2: Basic Managerial Accounting Concepts
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Sample Questions
Q1) Materials that become part of a product usually are classified as _______________.
Answer: direct materials.
Q2) Factory supervisor's salary
A)Period
B)Product
Answer: B
Q3) A cost that is difficult to trace to a cost object
A)period cost
B)direct cost
C)opportunity cost
D)variable cost
E)indirect cost
F)fixed cost
G)product cost
Answer: E
Q4) A cost object is something for which a company wants to know the cost.
A)True
B)False
Answer: True
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Chapter 3: Cost Behavior, Cost Forecasting, and Segmented Income Statements
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Sample Questions
Q1) Inventory costs under variable costing include only direct materials, direct labor, and variable factory overhead.
A)True
B)False
Answer: True
Q2) __________________________ is critically important in determining cost behavior and is by far the most widely used method in practice.
Answer: Managerial judgement
Q3) If a cost's step-cost behavior follows very narrow steps, the costs may be approximated using:
A) straight variable cost assumptions.
B) fixed costs assumptions.
C) step-fixed cost assumptions.
D) mixed cost assumptions.
Answer: A
Q4) property taxes
A)discretionary
B)committed
Answer: B
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Chapter 4: Job-Order Costing and Normal Cost Overhead Application
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Sample Questions
Q1) Costs reported on the financial statements must be estimated costs.
A)True
B)False
Q2) Which of the following departments of the automobile industry provides essential services for producing departments but do not actually make the product or service being sold?
A) Maintenance department
B) Grinding department
C) Painting department
D) Assembling department
E) Fabrication department
Q3) What is the amount of overhead applied for February?
A) $69,500
B) $22,000
C) $124,000
D) $185,200
E) $100,000
Q4) Applied overhead costs are charged to ________________.
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Q5) __________________________ is a costing system that accumulates production costs by process or by department for a given period of time.
Chapter 5: Activity-Based Costing and Management
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Sample Questions
Q1) Unit-level activities are performed each time a unit is produced.
A)True
B)False
Q2) Process that answers the question "How many people perform the activities?"
A)activity analysis
B)value-added costs
C)velocity
D)activity inputs
E)activity output measure
F)activity output
Q3) To calculate an activity rate, the practical capacity of each activity must be determined.
A)True
B)False
Q4) Factors that measure the consumption of activities by products and other cost objects are value-added costs.
A)True
B)False
Q5) A company will sometimes use a ____________________ which identifies the amount of labor consumed by each activity.
Page 7
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Chapter 6: Process Costing
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Sample Questions
Q1) Which of the following is the total cost of the units in ending work-in-process inventory by using the weighted average method? (Note: Round the unit direct material cost, the unit conversion cost, and the answer to two decimal places.)
A) $253,960.70.
B) $258,646.50.
C) $250,670.60.
D) $256,962.50.
Q2) computation of unit cost
A)step 1 in preparing a Production Report
B)step 2 in preparing a Production Report
C)step 3 in preparing a Production Report
D)step 4 in preparing a Production Report
E)step 5 in preparing a Production Report
Q3) The number of physical units is multiplied by the _____________________ to calculate equivalent units.
Q4) Costing system used by a manufacturer of custom furniture.
A)Process Costing
B)Job Order Costing
Q5) ___________ costs are a type of raw material cost.
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Chapter 7: Cost-Volume-Profit Analysis
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Sample Questions
Q1) ______________ gives us a way to determine how many units must be sold, or how much sales revenue must be generated to earn a particular target income.
Q2) A company's mix of fixed costs relative to variable costs is referred to as its
Q3) Learner Company sells its product for $100.It has a variable cost ratio of 70% and total fixed costs of $9,000.What is the break-even point in sales dollars for Learner Company?
A) $4,800
B) 32,000
C) $30,000
D) $8,000
Q4) To find the number of units to sell to earn a targeted income, it is acceptable to simply adjust the break-even units equation by adding target income to the variable cost.
A)True B)False
Q5) If the break-even volume for a company is 600 units and the company is currently selling 1,000 units than the 400 units would represent the company's
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Chapter 8: Tactical Decision-Making and Relevant Costing
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Sample Questions
Q1) Constraints
A)the difference in total cost between the alternatives in a decision
B)determine whether or not a segment should be kept or dropped
C)limited resources and limited demand for each product
D)a specific set of procedures that produces a decision
E)the point at which products that have common processes and costs of production become distinguishable
F)method of determining the cost of a product based on the price that customers are willing to pay
G)decisions involving a choice between internal and external production
H)products that have common processes and costs of production up to a point
I)past costs that cannot be affected by future decisions
J)a percentage applied to the base cost to cover other costs plus profit
K)determine whether a specially priced order should be accepted or rejected
L)determine whether it is more profitable to process a joint product further
Q2) Target costing is a method of determining the cost of a product or service based on the price (target price) that customers are willing to pay.
A)True
B)False
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Chapter 9: Profit Planning and Flexible Budgets
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Sample Questions
Q1) budgeted balance sheet
A)Operating Budget
B)Financial Budget
Q2) There are as many direct materials purchases budgets as there are products.
A)True
B)False
Q3) Which of the following is true of a performance report?
A) In preparing a performance report, static budgets are usually a good choice for benchmarks.
B) It compares actual costs with budgeted costs from the master budget.
C) It is prepared only if the top management has only superficial participation in the budgeting process.
D) To create a meaningful performance report, a static budget should be used.
E) To create a meaningful performance report, actual costs and expected costs should be compared at different levels of activity.
Q4) A _______________ is a budget created in advance that is based on a particular level of activity.
Q5) Often, the flexible budget formulas are based on ________________ instead of units.
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Chapter 10: Standard Costing and Variance Analysis
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Sample Questions
Q1) The ______________________ is the difference between the actual fixed overhead and the budgeted fixed overhead.
Q2) Craydye makes all sorts of moldings.Its standard quantity of material allowed is 1 foot of wood per 1 foot of molding at a standard price of $3.00 per foot.During August, it purchased 200,000 feet of wood at a cost of $2.00 per foot, which produced only 199,000 feet of molding.Calculate the materials price variance and the materials usage variance.
A) $400,000 F and $1,000 U
B) $600,900 U and $2,500 F
C) $700,000 U and $4,000 F
D) $200,000 F and $3,000 U
Q3) Responsibility for the fixed overhead volume variance is
A) not assigned because fixed overhead costs do not change with activity changes.
B) usually assigned to the production department.
C) usually assigned to top management.
D) usually assigned to the planning department.
E) None of these.
Q4) _________________ are capacity costs acquired in advance of usage.
Q5) ______________________ is a prerequisite for assigning responsibility.
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Chapter 11: Performance Evaluation and Decentralization
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Sample Questions
Q1) A price charged for a component by the selling division to the buying division of the same company is called a(n)
A) transfer price.
B) economic value added.
C) market price.
D) cost-based price.
E) None of these.
Q2) Decentralization usually is achieved by creating units called ___________.
Q3) MCE (manufacturing cycle efficiency) is calculated using the following formula:
A) processing time / nonprocessing time.
B) nonprocessing time / processing time.
C) total time / processing time.
D) processing time / total time.
E) total time / nonprocessing time.
Q4) In a decentralized company, overall profit margins can mask inefficiencies within the various subdivisions.
A)True
B)False
Q5) A(n) ________________ is when a manager is responsible only for sales.
Q6) Typically, investment centers are evaluated on the basis of
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Chapter 12: Capital Investment Decisions
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Sample Questions
Q1) A disadvantage of the payback period is that it ignores the time value of money.
A)True
B)False
Q2) Taxes are important consideration in forecasting cash flows.
A)True
B)False
Q3) is the best method discounting model to use for mutually exclusive competing projects
A)Payback period
B)Accounting rate of return
C)Net present value
D)Internal rate of return
E)Discount rate
F)Annuity
G)Post-audit
H)Compounding of interest
Q4) A postaudit is an analysis of a capital project before it is implemented.
A)True
B)False
Q5) _____________________ explicitly consider the time value of money.
Page 14
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Chapter 13: Emerging Topics in Managerial Accounting:
Sustainability, Quality Cost, Lean Accounting, International
Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting
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Sample Questions
Q1) Which of the following is true of an interim quality cost report?
A) At the end of a period, an interim quality cost report compares the actual quality costs for the period with the budgeted costs.
B) It provides a chart or graph that tracks the change in quality from the beginning of the program to the present.
C) An interim quality cost report highlights the progress trend since the inception of the quality improvement program.
D) An interim quality cost report does not consider prevention costs.
Q2) Which of the following is true of stakeholder engagement?
A) It is the area within the business sustainability cycle that immediately follows sustainability reporting.
B) Stakeholder engagement is the area within the business sustainability cycle that immediately follows performance measurement.
C) Stakeholder engagement varies from casual, impromptu, informal conversations all the way to regular, structured interactions.
D) It is not possible to quantify the results of stakeholder engagement activities.
Page 15
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Chapter 14: Statement of Cash Flows
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Sample Questions
Q1) Cash inflows that enter into the determination of net income are classified as financing activities on a statement of cash flows.
A)True
B)False
Q2) In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is A) added to net income.
B) deducted from net income.
C) ignored because it does not affect cash.
D) not reported on a statement of cash flows.
Q3) Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the A) direct method. B) indirect method.
C) cost-benefit method.
D) working capital method.
Q4) Using the ________________ of reporting cash flow, each line on the income statement is adjusted to produce a cash flow income statement.
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Chapter 15: Financial Statement Analysis
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Sample Questions
Q1) Industrial statistics should be taken as absolute norms as far as standards for comparability.
A)True
B)False
Q2) Which of the following characteristics of a company's financial position is analyzed by accounts receivable turnover and inventory turnover ratios?
A) The marketability
B) The profitability
C) The growth prospects
D) The liquidity
Q3) Emerald Company has $20,000 in cash, $10,000 in marketable securities, $40,000 in accounts receivables, $45,000 in inventories, and $50,000 in current liabilities.The company's quick ratio is closest to:
A) 1.20.
B) 1.40.
C) 2.35.
D) 0.60.
Q4) A company measures how efficiently it is using its assets by calculating the _______________.
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