Financial Planning and Analysis
Test Bank
Course Introduction
Financial Planning and Analysis is a course that introduces students to the strategic processes and analytical tools used to evaluate an organizations financial health and guide its financial decisions. The course covers key topics such as budgeting, forecasting, variance analysis, financial modeling, and performance measurement. Students learn to analyze financial data, develop financial plans, and present recommendations that support business objectives. Emphasis is placed on decision-making skills, the use of technology in financial analysis, and the alignment of financial strategies with overall business goals, preparing students for roles in corporate finance, consulting, and management.
Recommended Textbook
Horngrens Cost Accounting A Managerial Emphasis 16th Edition by Srikant M. Datar
Available Study Resources on Quizplus
23 Chapters
4116 Verified Questions
4116 Flashcards
Source URL: https://quizplus.com/study-set/241 Page 2
Chapter 1: The Manager and Management Accounting
Available Study Resources on Quizplus for this Chatper
195 Verified Questions
195 Flashcards
Source URL: https://quizplus.com/quiz/3753
Sample Questions
Q1) Which of the following statements is true of performance reports?
A) The performance report shows actual performance as compared to the budget.
B) The performance report depicts the performance of a firm's competitors.
C) The performance report compares only the budgeted performance over the years.
D) The performance report contains no actual results due to confidentiality.
Answer: A
Q2) What is strategy? Briefly describe the two broad types of strategies that companies may choose to pursue.
Answer: Strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives. In other words, strategy describes how a company will compete.
Companies follow one of two broad strategies. One is provide a quality product or service at low prices. The other is to compete on their ability to offer a unique product or service that is generally offered at a higher price.
Q3) The Institute of Management Accountants provides a hotline to discuss ethical issues.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: An Introduction to Cost Terms and Purposes
Available Study Resources on Quizplus for this Chatper
223 Verified Questions
223 Flashcards
Source URL: https://quizplus.com/quiz/3754
Sample Questions
Q1) Department stores, such as Macy's and Khols, are examples of a merchandising company.
A)True
B)False
Answer: True
Q2) For a manufacturing company, direct labor costs would be included in ________.
A) only the direct materials inventory to reflect the cost of labor that has worked using those materials
B) only in the merchandise inventory to reflect the value added in the production process
C) only in both work-in-process inventory and finished goods inventory
D) direct materials inventory, work-in-process inventory, and finished goods inventory accounts
Answer: C
Q3) Which one of the following is a variable cost for an insurance company?
A) rent of the building
B) CEO's salary
C) electricity expenses
D) property taxes
Answer: C
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Cost-Volume-Profit Analysis
Available Study Resources on Quizplus for this Chatper
211 Verified Questions
211 Flashcards
Source URL: https://quizplus.com/quiz/3755
Sample Questions
Q1) Sparkle Jewelry sells 500 units resulting in $10,000 of sales revenue, $4,000 of variable costs, and $1,500 of fixed costs. Calculate the variable cost per unit. (Round the final answer to the nearest cent.)
A) $12.00
B) $6.00
C) $2.00
D) $8.00
Answer: D
Q2) If the contribution margin ratio is 0.60, targeted operating income is $50,000, and fixed costs are $75,000, then sales volume in dollars is ________. (Round the final answer to the nearest dollar.)
A) $312,500
B) $208,333
C) $125,000
D) $83,333
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Job Costing
Available Study Resources on Quizplus for this Chatper
203 Verified Questions
203 Flashcards
Source URL: https://quizplus.com/quiz/3756
Sample Questions
Q1) In a job-costing system the cost object is an individual unit, batch, or lot of a distinct product or service.
A)True
B)False
Q2) Explain the procedure how overhead indirect costs become a part of work-in process inventory.
Q3) When calculating indirect cost rates, the longer the time period, the greater the influence of seasonal patterns on the amount of costs.
A)True
B)False
Q4) In a job-costing system, a manufacturing firm typically uses an indirect-cost rate to estimate the ________ allocated to a job.
A) direct materials
B) direct labor
C) manufacturing overhead costs
D) total costs
Q5) What are the direct costs of a job and in which source documents are they recorded?
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Activity-Based Costing and Activity-Based Management
Available Study Resources on Quizplus for this Chatper
176 Verified Questions
176 Flashcards
Source URL: https://quizplus.com/quiz/3757
Sample Questions
Q1) If the separate activities of design, process design, and prototyping are combined into one activity called "design" in an ABC system, management is forming one homogeneous cost pool.
A)True
B)False
Q2) Distribution can be a cost-driver for a manufacturing company under ABC system.
A)True
B)False
Q3) Which of the following is a sign that an ABC system will provide benefits?
A) There are relatively few indirect cost pools associated with the product and the indirect costs are a small percentage of total product cost
B) All the products produced are similar and sell in equal proportions (sales mix)
C) Operations staff has no substantial disagreements with the reported costs of manufacturing and marketing products and services.
D) All or most indirect costs are treated as output-unit level costs.
Q4) How are cost drivers selected in activity-based costing systems?
Q5) Is it advisable to ignore facility-sustaining cost drivers during product costing?
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Master Budget and Responsibility Accounting
Available Study Resources on Quizplus for this Chatper
226 Verified Questions
226 Flashcards
Source URL: https://quizplus.com/quiz/3758
Sample Questions
Q1) Which of the following departments is most likely to be a profit center?
A) the accounting department of a company that also assists in budgeting process
B) the research and development department of a company
C) the sales department of a company whose objective is to maximize the revenues
D) the consulting department of a law firm
Q2) Most computer-based financial planning models have difficulty incorporating sensitivity (what-if) analysis.
A)True
B)False
Q3) Describe the benefits of preparing an operating budget to an organization.
Q4) In general, which of the following budgets is prepared first?
A) sales budget
B) production budget
C) direct labor budget
D) overhead budget
Q5) The cost of goods sold budget is calculated by deducting beginning finished-goods from cost of goods available for sale.
A)True
B)False
Q6) Describe the concept of kaizen budgeting.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Flexible Budgets, Direct-Cost Variances, and Management Control
Available Study Resources on Quizplus for this Chatper
181 Verified Questions
181 Flashcards
Source URL: https://quizplus.com/quiz/3759
Sample Questions
Q1) A variance within an acceptable range is considered to be an "in-control occurrence" and calls for no investigation or action by managers.
A)True
B)False
Q2) The sales-volume variance is sometimes due to ________.
A) the difference between selling price and budgeted selling price
B) quality problems leading to customer dissatisfaction
C) unexpected increase in manufacturing labor time
D) unexpected increase in the use of quantities of inputs of raw material
Q3) A purchasing manager's performance is best evaluated using information such as
A) usage efficiency and direct materials price variance
B) direct materials flexible-budget variance
C) direct manufacturing labor flexible-budget variance
D) price and terms bargaining effectiveness, achievement of quality goals, and direct materials price variance
Q4) A flexible-budget variance can be subdivided into the static-budget variance and the sales-volume variance.
A)True
B)False
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Flexible Budgets, Overhead Cost Variances, and Management Control
Available Study Resources on Quizplus for this Chatper
176 Verified Questions
176 Flashcards
Source URL: https://quizplus.com/quiz/3760
Sample Questions
Q1) Define variable overhead spending variance. Briefly explain why a favorable variable overhead spending variance may not always be desirable.
Q2) Time and Again Company makes clocks. The fixed overhead costs for 2017 total $900,000. The company uses direct labor-hours for fixed overhead allocation and anticipates 200,000 hours during the year for 330,000 units. An equal number of units are budgeted for each month.
During June, 32,000 clocks were produced and $72,000 was spent on fixed overhead.
Required:
a.Determine the fixed overhead rate for 2017 based on units of input.
b.Determine the fixed overhead static-budget variance for June.
c.Determine the production-volume overhead variance for June.
Q3) Which of the following is the correct mathematical expression to calculate the fixed overhead spending variance?
A) Static-budget amount - Flexible-budget amount
B) Actual costs incurred - Flexible-budget amount
C) Static-budget amount - Fixed overhead allocated for actual output
D) Flexible-budget amount - Fixed overhead allocated for actual output
Q4) List the four steps to develop budgeted variable overhead cost-allocation.
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Inventory Costing and Capacity Analysis
Available Study Resources on Quizplus for this Chatper
209 Verified Questions
209 Flashcards
Source URL: https://quizplus.com/quiz/3761
Sample Questions
Q1) Advocates of throughput costing argue that ________.
A) fixed manufacturing costs must be included as inventoriable costs and provide less incentive than absorption costing to build-up inventory to increase profits
B) direct manufacturing labor is relatively fixed and therefore should not be included in inventory costs
C) direct materials costs are a cost of the period and therefore should not be included in inventoriable costs
D) including only direct materials as inventoriable costs provides less incentive than absorption costing to produce a build-up of inventory merely to increase profits
Q2) A company may use absorption costing for external reporting and still choose to use throughput costing for internal reports.
A)True
B)False
Q3) Both theoretical capacity and master-budget capacity measure capacity levels in terms of demand for the output of the plant.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Determining How Costs Behave
Available Study Resources on Quizplus for this Chatper
192 Verified Questions
192 Flashcards
Source URL: https://quizplus.com/quiz/3762
Sample Questions
Q1) The account analysis method estimates cost functions by classifying various cost accounts as variable, fixed, or mixed with respect to the identified level of activity.
A)True
B)False
Q2) Multicollinearity exists in multiple regression when two or more independent variables are highly correlated with each other.
A)True
B)False
Q3) One assumption frequently made in cost behavior estimation is that changes in total costs can be explained by changes in the level of a single activity.
A)True
B)False
Q4) The vertical difference, called the residual term, measures the distance between actual cost of one period and estimated cost of the next period.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Decision Making and Relevant Information
Available Study Resources on Quizplus for this Chatper
218 Verified Questions
218 Flashcards
Source URL: https://quizplus.com/quiz/3763
Sample Questions
Q1) A decision model involves a(n) ________.
A) informal method of making a choice at the lower level management using sensitivity analysis
B) formal method of making a choice that often involves both quantitative and qualitative analyses
C) informal method of making a choice which is discussed in detailed in the financial reports
D) formal method of making a choice at the lower level management using advanced management techniques such as balance scorecard
Q2) Which of following is a firm's risk of outsourcing the production of a part?
A) fluctuation in the manufacturing costs
B) leakage of intellectual property
C) increased need of skilled workers
D) scarcity of indirect labor
Q3) Outsourcing is purchasing from outside vendors parts and other goods instead of producing your own and contracting for services instead of providing them yourself.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
13
Chapter 12: Strategy, Balanced Scorecard, and Strategic
Profitability Analysis
Available Study Resources on Quizplus for this Chatper
172 Verified Questions
172 Flashcards
Source URL: https://quizplus.com/quiz/3764
Sample Questions
Q1) Engineered costs contain a higher level of uncertainty than discretionary costs. A)True
B)False
Q2) Partial productivity and total factor productivity measures work best together because both measures have the same kind of strengths and weaknesses.
A)True
B)False
Q3) Heliem Corp. uses the balanced scorecard technique to achieve its long term objectives. Managers of Heliem came to know that all the balanced scorecards objectives were achieved other than financial perspective measures for the previous period. While the learning and growth and internal business processes perspective measures were achieved with relative ease, Heliem had to strive extremely hard to achieve customer oriented measures. The company had failed miserably in achieving its financial measures. Using the given information, evaluate the strategy of Heliem and its implementation.
Q4) Explain the term cost leadership. What are the possible ways through which a company would try to become a cost leader? How far is it desirable to implement cost reduction measures?
Page 14
To view all questions and flashcards with answers, click on the resource link above.
Chapter 13: Pricing Decisions and Cost Management
Available Study Resources on Quizplus for this Chatper
210 Verified Questions
210 Flashcards
Source URL: https://quizplus.com/quiz/3765
Sample Questions
Q1) Which f the following methods focuses on reducing costs during the manufacturing stage?
A) Target costing
B) Kaizen costing
C) Cost-plus pricing
D) Life-cycle costing
Q2) A full-cost formula for pricing does not require the management accountant to perform a detailed analysis of cost-behavior patterns.
A)True
B)False
Q3) Which of the following best describes customer life-cycle costs?
A) costs incurred by the selling company to satisfy the customer.
B) costs to the customers for buying and using a product.
C) same as the selling life-cycle prices.
D) replacement costs of using a product or service.
Q4) A life-cycle budget is usually prepared to budget for costs and production for a period of one year.
A)True
B)False
Q5) What factors may influence the level of markups?
Page 15
To view all questions and flashcards with answers, click on the resource link above.
Chapter 14: Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis
Available Study Resources on Quizplus for this Chatper
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/3766
Sample Questions
Q1) The static-budget variance will be favorable, when ________.
A) budgeted unit sales are more than actual unit sales
B) the actual contribution margin is less than the static-budget contribution margin
C) the actual sales mix shifts toward the less profitable units
D) the flexible-budget and the sales-volume variance are favorable
Q2) A company has two distribution channels: wholesale and business sales. Which of the following costs would be allocated as distribution-channel-level costs when analyzing the profitability of customer distribution channels?
A) sales order costs
B) customer visit costs
C) salary of the wholesale distribution channel manager
D) corporate adminstration costs
Q3) Customer-profitability analysis is the reporting and assessment of revenues earned from customers and the costs incurred to earn those revenues.
A)True
B)False
Q4) Why do managers prepare cost-hierarchy-based operating incomes statements?
Q5) Should a company allocate its corporate costs to divisions?
Page 16
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Allocation of Support-Department Costs,
Common Costs, and Revenues
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/3767
Sample Questions
Q1) Emrald Corp currently uses a manufacturing facility costing $520,000 per year; 85% of the facility's capacity is currently being used. A start-up business has proposed a plan that would utilize the other 15% of the facility and increase the overall costs of maintaining the space by 12%. If the stand-alone method were used, what amount of cost would be allocated to the start-up business?
A) $75,660
B) $78,000
C) $66,300
D) $87,360
Q2) Under which allocation method are one-way reciprocal support services recognized?
A) direct method
B) artificial cost method
C) reciprocal method
D) step-down method
Q3) All contracts with U.S. government agencies must comply with the cost accounting standards issued by the SEC.
A)True
B)False
17
To view all questions and flashcards with answers, click on the resource link above.
Chapter 16: Cost Allocation: Joint Products and Byproducts
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/3768
Sample Questions
Q1) In joint costing, the physical measures are generally used for products or services that are processed and, after split-off, additional value is added to the product and a selling price can be determined.
A)True
B)False
Q2) The Berkel Corporation manufactures Widgets, Gizmos, and Turnbols from a joint process. June production is 7000 widgets; 10,500 gizmos; and 12,500 turnbols. Respective per unit selling prices at split-off are $80, $55, and $30. Joint costs up to the split-off point are $188,500. If joint costs are allocated based upon the sales value at split-off, what amount of joint costs will be allocated to the widgets? (Do not round any intermediary calculations.)
A) $23,492
B) $69,792
C) $46,736
D) $71,973
Q3) All products yielded from joint product processing have some positive value to the firm.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 18
Chapter 17: Process Costing
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/3769
Sample Questions
Q1) The journal entry for transfer from Department B to finished goods is:
Debit: Work in Process-Department B
Credit: Finished Goods Control
A)True
B)False
Q2) Under the weighted-average method, how would you calculate the cost per equivalent units with regards to conversion costs?
A) conversion costs for work done in the current period/units completed and transferred out in the current period
B) (total conversion costs in beginning work in process)/(units completed and transferred out during the period + equivalent units in ending inventory)
C) (total conversion costs in beginning work in process + conversion cost for work done in the current period)/(units completed and transferred out during the period + equivalent units in ending inventory)
D) (total direct labor costs in beginning work in process + conversion cost for work done in the current period)/(units completed and transferred out during the period + equivalent units in ending inventory)
Q3) List and describe the five steps in process costing.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 18: Spoilage, Rework, and Scrap
Available Study Resources on Quizplus for this Chatper
153 Verified Questions
153 Flashcards
Source URL: https://quizplus.com/quiz/3770
Sample Questions
Q1) When rework is normal and NOT attributable to a specific job, the costs of rework are charged to manufacturing overhead and are spread, through overhead allocation, over all jobs.
A)True
B)False
Q2) Which of the following defines spoilage?
A) units of production that do not meet the specifications required by customers but that are subsequently repaired and sold as good finished units
B) units of production whether fully or partially completed, that do not meet the specifications required by customers for good units and are discarded or sold at reduced prices
C) residual material that results from manufacturing a product
D) products of a joint production process that have low total sales values relative to the total sales value of the main product
Q3) Under the FIFO method, all spoilage costs are assumed to be related to the units completed during this period using the unit costs of the current period.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 19: Balanced Scorecard: Quality and Time
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/3771
Sample Questions
Q1) The implication of controlling a process at a Six Sigma level is that the process produces only 3.4 defects per million products produced.
A)True
B)False
Q2) Manufacturing cycle times affect both revenues and costs.
A)True
B)False
Q3) Examples of nonfinancial measures of quality include the ________.
A) inspection costs incurred
B) number of customer complaints
C) design engineering costs
D) quality training costs
Q4) Which of the following is a financial measure of quality?
A) operating income growth
B) percentage of highly satisfied customers
C) number of defective units shipped to customers as a percentage of total units shipped
D) interest costs
Q5) Manufacturing cycle times affect both revenues and costs. Explain.
Q6) What are ISO 9000 and ISO 14000?
To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 20: Inventory Management, Just-in-Time, and
Simplified Costing Methods
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/3772
Sample Questions
Q1) The EOQ model factors in the probability of stockouts.
A)True
B)False
Q2) In a backflush-costing system, no record of work in process appears in the accounting records.
A)True
B)False
Q3) A firm using a backflush costing system will always use actual costs rather than standard costs.
A)True
B)False
Q4) A system that comprises a single database that collects data and feeds it into software applications supporting all of a company's business activities is known as a(n)
A) economic order quantity (EOQ) system
B) enterprise resource planning (ERP) system
C) just-in-time (JIT) system
D) material requirements planning (MRP) system
Q6) Lean accounting is much simpler than traditional product costing. Why? Page 22
Q5) What are the principles of lean accounting? Are there any limitations? Discuss.
To view all questions and flashcards with answers, click on the resource link above.
Page 23
Chapter 21: Capital Budgeting and Cost Analysis
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/3773
Sample Questions
Q1) Diamond Manufacturing Company provides glassware machines for major department store retailers. The company has been investigating a new piece of machinery for its production department. The old equipment has a remaining life of eight years and the new equipment will cost $141,969 with a eight-year life. The expected additional cash inflows are $37,000 per year. What is the internal rate of return?
A) 13%
B) 15%
C) 20%
D) 23%
Q2) Investment A requires a net investment of $604,021 The required rate of return is 12% for the three-year annuity. What are the annual cash inflows if the net present value equals 0? (rounded)
A) $2,416,084
B) $251,466
C) $604,016
D) -$1,812,063
Q3) The higher the probability of customer churn, the higher the NPV of a customer.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 24
Chapter 22: Management Control Systems, Transfer
Pricing, and Multinational
Considerations
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/3774
Sample Questions
Q1) Which of the following is true of goal congruence?
A) It exists when the management's strategy is in line with the shareholders' requirements.
B) It exists when individuals and groups work toward achieving the organization's goals.
C) It exists when both internal and external stakeholders of an organization have similar goals.
D) It exists when an organization's goals are in line with the social acceptability of organizational goals.
Q2) Division A sells ground veal internally to Division B, which in turn, produces veal burgers that sell for $19 per pound. Division A incurs costs of $1.25 per pound while Division B incurs additional costs of $6.50 per pound. Which of the following formulas correctly reflects the company's operating income per pound?
A) $19 - ($1.25 + $6.50) = $11.25
B) $19 - ($3.25 + $6.50) = $9.25
C) $19 - ($1.25 + $9.75) = $8.00
D) $19 - ($0.75 + $3.25 + $3.25) = $5.50
Q3) Dual pricing is not widely used. Explain its disadvantages.
To view all questions and flashcards with answers, click on the resource link above. Page 25
Chapter 23: Performance Measurement, Compensation, and Multinational Considerations
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/3775
Sample Questions
Q1) Which of the following describes boundary control systems?
A) set limits by instituting and communicating standards of behavior and codes of conduct expected of all employees
B) articulate the mission, purpose, and core values of a company
C) are formal information systems managers use to focus the company's attention and learning on key strategic issues
D) describe the geographic limits of a company and help organize its layout
Q2) The credit rating agencies require detailed disclosures of the compensation arrangements of top-level executives.
A)True
B)False
Q3) Current cost return on investment is a better measure of the current economic returns from an investment than historical cost return on investment.
A)True
B)False
Q4) ROI, RI, or EVA measures are more appropriate than ROS to measure the performance of a company. Why?
To view all questions and flashcards with answers, click on the resource link above. Page 26