Financial Planning and Analysis
Test Preparation
Course Introduction
Financial Planning and Analysis is a comprehensive course that explores the essential concepts, tools, and techniques used to evaluate an organizations financial health and support strategic decision-making. Students will learn to develop financial forecasts, budgets, and long-term plans, assess financial performance using key metrics, and analyze variances between projected and actual results. The course emphasizes the integration of financial data with business strategies to optimize resource allocation, improve profitability, and maximize shareholder value. Through real-world case studies and practical exercises, students gain the analytical skills needed to interpret financial statements, perform scenario analysis, and provide actionable insights to stakeholders.
Recommended Textbook
MANAGERIAL ACCOUNTING Version 1.0 by Kurt Heisinger and Joe Hoyle
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13 Chapters
878 Verified Questions
878 Flashcards
Source URL: https://quizplus.com/study-set/3571
Page 2
Chapter 1: What Is Managerial Accounting
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83 Verified Questions
83 Flashcards
Source URL: https://quizplus.com/quiz/70918
Sample Questions
Q1) Financial accounting focuses on external users,while managerial accounting focuses on internal users.
A)True
B)False
Answer: True
Q2) All of the following are included in Balance Sheet accounts containing product costs except:
A)Work in Process Inventory.
B)Cost of Goods Sold.
C)Raw Materials.
D)Cost of Goods Manufactured.
E)None of the above.
Answer: B
Q3) Enterprise Resource Planning (ERP)systems should be implemented by all organizations since ERP systems are inexpensive and lead to better decisions.
A)True
B)False
Answer: False
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3
Chapter 2: How Is Job Costing Used to Track Production Costs
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44 Verified Questions
44 Flashcards
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Sample Questions
Q1) Which of the following companies would probably not use job order costing?
A)A window washing service.
B)A milk manufacturer.
C)A car repair business.
D)An electrician.
E)None of the answer choices is correct.
Answer: B
Q2) When a manufacturing company purchases raw materials,the Raw Materials Inventory account is debited.
A)True
B)False Answer: True
Q3) The entry to record the requisition of indirect materials in a job cost system includes a:
A)debit to Work in Process Inventory.
B)debit to Manufacturing Overhead.
C)credit to Accounts Payable.
D)credit to Work in Process Inventory.
E)None of the answer choices is correct.
Answer: B
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Chapter 3: How Does an Organization Use Activity-Based
Costing to Allocate Overhead Costs
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71 Verified Questions
71 Flashcards
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Sample Questions
Q1) Which of the following items is a unit-level activity?
A)Purchase requisitions issued for raw materials needed to produce groups of products.
B)Direct labor assembling products.
C)Maintenance performed on the factory building.
D)Quality inspections of groups of products.
E)None of the answer choices is correct.
Answer: B
Q2) All of the following can be performed using ABC and ABM except:
A)assessing profitability of products.
B)providing product cost information.
C)analyzing production processes.
D)evaluating employee and division performance.
E)All of the choices are correct.
Answer: E
Q3) Total companywide estimated overhead costs will change depending on if plant wide allocation or departmental allocation is used.
A)True
B)False
Answer: False
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Chapter 4: How Is Process Costing Used to Track
Production Costs
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58 Verified Questions
58 Flashcards
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Sample Questions
Q1) The unit cost information for process costing comes from the departmental production cost report.
A)True
B)False
Q2) Everlast Inc.had 12,000 units in WIP Inventory at December 1 that were 70% complete with respect to direct labor and overhead.During December,40,000 units were completed.On December 31,the 14,000 units in WIP Inventory were 30% complete as to direct labor and overhead.Direct materials are added at the beginning of the process.How many units were started during December?
A)42,000
B)66,000
C)38,000
D)32,000
E)None of the answer choices is correct.
Q3) The production cost report does all the following except:
A)calculates production for the next period.
B)shows the equivalent units of production.
C)helps in controlling costs.
D)shows the costs to transfer out.
E)None of the answer choices is correct.
Page 6
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Chapter 5: How Do Organizations Identify Cost Behavior
Patterns
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69 Verified Questions
69 Flashcards
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Sample Questions
Q1) Refer to Exhibit 5-7.Which of the following amounts represents total cost of goods sold?
A)$176,000
B)$126,000
C)$164,000
D)$424,000
E)None of the answer choices is correct.
Q2) Why do companies use the contribution margin income statement format?
A)To comply with generally accepted accounting principles (GAAP).
B)For external reporting purposes.
C)To present cost of goods sold to external users.
D)To predict how costs will behave with changes in activity.
E)None of the answer choices is correct.
Q3) Refer to Exhibit 5-4.What is the estimated total fixed cost?
A)$60,000
B)$140,000
C)$55,000
D)$70,000
E)None of the answer choices is correct.
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Chapter 6: How Is Cost-Volume-Profit Analysis Used for Decision Making
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79 Verified Questions
79 Flashcards
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Sample Questions
Q1) Refer to Exhibit 6-4.Assume the sales mix remains the same at all levels of sales. What is the weighted average contribution margin per unit?
A)$44
B)$56
C)$100
D)$50
E)None of the answer choices is correct.
Q2) Refer to Exhibit 6-3.What is the weighted average contribution margin per unit?
A)$620
B)$650
C)$1,160
D)$1,300
E)None of the answer choices is correct.
Q3) Which of the following is the correct profit equation?
A)Total sales - total variable costs
B)Total sales - total fixed costs
C)Total sales - total variable costs - total fixed costs
D)Total sales - total variable costs + total fixed costs
E)None of the answer choices is correct.
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Chapter 7: How Are Relevant Revenues and Costs Used to
Make Decisions
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76 Verified Questions
76 Flashcards
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Sample Questions
Q1) The theory of constraints starts with subordinating all nonbottleneck resources to the bottleneck.
A)True
B)False
Q2) Refer to Exhibit 7-9.If the physical quantities method is used to allocate the $12 in joint costs,how much will be allocated to Premium doughnuts?
A)$10.00
B)$7.20
C)$6.00
D)$4.80
E)None of the answer choices is correct.
Q3) Differential analysis can be used to decide whether to outsource production,but it is not used for product line decisions.
A)True
B)False
Q4) Sunk costs are costs incurred in the past that cannot be changed by future decisions.
A)True
B)False
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Chapter 8: How Is Capital Budgeting Used to Make Decisions
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71 Verified Questions
71 Flashcards
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Sample Questions
Q1) Refer to Exhibit 8-2.What is the net present value of Investment A (rounded to the nearest dollar)?
A)$72
B)$15,600
C)$30,000
D)$361,680
E)None of the answer choices is correct.
Q2) Lanyard Company is considering an investment that will generate $600,000 in cash inflows per year for 7 years and has $240,000 of cash outflows for the same period (before income taxes).The cost of the asset is $700,000 and it will be depreciated using straight-line depreciation over the 7 year life.The asset has no salvage value.Lanyard's tax rate is 40%.The cost of capital is 18%.
What is the annual after-tax cash flow associated with this investment?
A)$176,000
B)$260,000
C)$216,000
D)$256,000
E)None of the answer choices is correct.
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Chapter 9: How Are Operating Budgets Created
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68 Verified Questions
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Sample Questions
Q1) Merchandising companies and service organizations do not use production budgets.
A)True
B)False
Q2) Organizations use budgets to control operations,because budgets provide a means to evaluate employee and company performance.
A)True
B)False
Q3) The production budget for Ventura Company shows the company expects to produce 3,000 units in the first quarter and 3,200 units in the second quarter.Each unit requires 30 pounds of direct materials at a cost of $5 per pound.The company prefers to maintain raw materials inventory equal to 25 percent of next quarter's materials needed in production.Each unit of product requires four direct labor hours at a cost of $20 per hour.Variable overhead cost per unit is $5 for indirect materials,$8 for indirect labor,and $12 for other items.Fixed overhead cost per quarter is $90,000 for salaries,$50,000 for rent,and $10,000 for depreciation. Prepare a manufacturing overhead budget for the first quarter.
Q4) A direct labor budget is regarded as the starting point for the master budget.
A)True
B)False
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Chapter 10: How Do Managers Evaluate Performance Using Cost Variance Analysis
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69 Verified Questions
69 Flashcards
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Sample Questions
Q1) Which of the following would most likely be the reason for an unfavorable labor efficiency variance?
A)A higher mix of skilled workers made more efficient use of the labor hours.
B)The company used lower skilled workers than they anticipated to complete products.
C)High-quality materials resulted in less time spent working with materials waste.
D)An employee training program improved the efficient use of time.
E)None of the answer choices is correct.
Q2) Jake's Cheese Company produces gourmet cheese for resale at local grocery stores.Jake's expected to use 0.50 direct labor hours to produce one unit (batch)of product at a cost of $10 per hour.Actual results are in for last year,which indicates 45,000 batches of cheese were sold.The company's direct labor workforce worked 27,500 hours at $9 per hour.
(1)Calculate the labor rate variance.
(2)Calculate the labor efficiency variance.
(3)Suggest several possible reasons for the labor rate and efficiency variances.
Q3) A flexible budget is a revised master budget based on the actual activity level.
A)True B)False
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Chapter 11: How Do Managers Evaluate Performance in
Decentralized Organizations
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63 Verified Questions
63 Flashcards
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Sample
Questions
Q1) Refer to Exhibit 11-2.Assume the Refrigerator Division has average operating assets totaling $24,000,000 for the year and the company's cost of capital rate is 15 percent.What is the residual income for the Refrigerator division?
A)$2,200,000
B)$2,580,000
C)$6,400,000
D)$480,000
E)None of the answer choices is correct.
Q2) The percent cost of capital is typically the company's percentage cost to obtain investment funds.
A)True
B)False
Q3) Segments of an organization are often referred to as divisions.
A)True
B)False
Q4) Residual income is the portion of income produced by the division that is not related to its daily activities.
A)True
B)False
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Chapter 12: How Is the Statement of Cash Flows Prepared and Used
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65 Verified Questions
65 Flashcards
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Sample Questions
Q1) The capital expenditure ratio is calculated as:
A)Cash provided by operating activities divided by capital expenditures.
B)Cash provided by operating activities plus capital expenditures.
C)Cash provided by operating activities divided by current liabilities.
D)Capital expenditures divided by cash provided by operating activities.
E)None of the answer choices is correct.
Q2) Free cash flow provides information regarding how much cash generated from daily operations is remaining after investing in fixed assets.
A)True
B)False
Q3) The operating activities
A)True
B)False
Q4) Refer to Exhibit 12-5.How will the change in inventory be reported in the operating activities
A)The increase of $50,000 will be added to cost of goods sold.
B)The increase of $50,000 will be added to net income.
C)The increase of $50,000 will be subtracted from net income.
D)The increase of $50,000 will be subtracted from cost of goods sold.
E)None of the answer choices is correct.
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Chapter 13: How Do Managers Use Financial and
Nonfinancial Performance Measures
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62 Verified Questions
62 Flashcards
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Sample Questions
Q1) In general,managers prefer the profit margin ratio to decrease over time.
A)True
B)False
Q2) Most public companies present trend information in their annual reports.
A)True
B)False
Q3) Albany Company has net income before taxes of $90,000,interest expense of $36,000 and an income tax rate of 20%.Based on this information,the company's times interest earned ratio is:
A)12.5 times
B)2.5 times
C)3.5 times
D)4.0 times
E)None of the answer choices is correct.
Q4) Most accounting computer programs,such as QuickBooks,provide common-size analysis reports.
A)True
B)False
Page 15
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