Financial Planning and Control
Exam Bank
Course Introduction
Financial Planning and Control explores the methods and tools organizations use to plan for their financial future and monitor performance against those plans. The course covers core topics such as budgeting, forecasting, variance analysis, and financial statement analysis, as well as the development and implementation of effective financial strategies. Students will learn how to evaluate financial resources, allocate budgets, and use control mechanisms to guide organizational decision-making, ensuring that goals and objectives are met efficiently and effectively. Emphasis is placed on both the theoretical concepts and practical techniques essential for successful financial management in contemporary business settings.
Recommended Textbook
Managerial Accounting 11th Canadian Edition by Ray Garrison
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14 Chapters
2025 Verified Questions
2025 Flashcards
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Page 2
Chapter 1: Managerial Accounting and the Business Environment
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49 Verified Questions
49 Flashcards
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Sample Questions
Q1) Budgeting is part of which of the following activities managers perform in organizations?
A) Controlling.
B) Directing.
C) Planning.
D) Motivating.
Answer: C
Q2) Professional accounting body in Canada (CPA)require their members to undertake professional development and/or continuing education.This practice is intended to directly satisfy which of these rules of ethical conduct in line with other code of ethics?
A) Integrity.
B) Objectivity.
C) Competence.
D) Confidentiality.
Answer: C
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Page 3
Chapter 2: Cost Terms,concepts,and Classifications
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105 Flashcards
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Sample Questions
Q1) Some companies classify labour fringe benefits for direct labour workers as part of the direct labour cost and some classify these costs as manufacturing overhead.
A)True
B)False
Answer: True
Q2) When a decision is made among a number of alternatives,the benefit that is lost by choosing one alternative over another is called what?
A) Realized cost.
B) Opportunity cost.
C) Conversion cost.
D) Accrued cost.
Answer: B
Q3) Variable costs are costs whose per unit costs vary as the activity level rises and falls.
A)True
B)False
Answer: False
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Chapter 3: Cost Behaviour: Analysis and Use
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Sample Questions
Q1) The linear equation Y = a + bX is often used to express cost formulas.Which of the following representations in this equation is correct?
A) The b term represents variable cost per unit of activity.
B) The a term represents variable cost in total.
C) The X term represents total costs.
D) The Y term represents total fixed costs.
Answer: A
Q2) What is the best estimate of the company's total fixed operating expenses per year?
A) $0.
B) $44,000.
C) $80,000.
D) $174,000.
Answer: D
Q3) The concept of the relevant range does not apply to fixed costs.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Cost-Volume-Profit Relationships
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140 Flashcards
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Sample Questions
Q1) If sales are zero,the company's operating loss equals its fixed expenses.
A)True
B)False
Q2) What is the company's margin of safety in dollars?
A) $400,000.
B) $600,000.
C) $120,000.
D) $880,000.
Q3) Which of the following is defined as the amount by which a company's sales can decline before operating losses are incurred?
A) Contribution margin.
B) Degree of operating leverage.
C) Margin of safety.
D) Contribution margin ratio.
Q4) The break-even in units sold will decrease if there is an increase in which of the following?
A) Unit sales volume.
B) Total fixed expenses.
C) Unit variable expenses.
D) Selling price.
Page 6
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Chapter 5: Systems Design: Job-Order Costing
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113 Flashcards
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Sample Questions
Q1) Arthur Manufacturing Company produces a single product.The controller has asked for your help in preparing a schedule of cost of goods manufactured for the month just ended.The following information is available:
1.)Eleven thousand units were sold at $22 per unit.
2.)Thirteen thousand units requiring one unit each of raw materials were produced.
3.)Raw materials inventory at the beginning of the month was 1,100 units at $4 each.
4.)During the month,two purchases of raw materials were made:
Purchase #1: 7,000 units at $5.00 each
Purchase #2: 6,000 units at $5.50 each
5.)The company uses the first-in,first-out method of determining raw materials inventories.
6.)The work-in-process inventories were:
Beginning of the month: 1,500 units valued at $17,000
End of the month: 1,500 units valued at $19,000
7.)Direct labour cost was $110,000.
8.)Overhead is applied to production on the basis of 65% of direct labour cost.
Required:
Prepare a schedule of cost of goods manufactured for the month.
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Page 7
Chapter 6: Systems Design: Process Costing
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131 Flashcards
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Sample Questions
Q1) What was the cost of the work-in-process inventory in the Finishing Department at the end of May?
A) $7,600.
B) $10,000.
C) $2,500.
D) $4,000.
Q2) Using the FIFO method,the cost per equivalent unit of materials for May is closest to which of the following?
A) $4.12.
B) $4.50.
C) $4.60.
D) $4.80.
Q3) The cost per equivalent unit will be greater when normal losses are charged to good output than when they are charged to manufacturing overhead.
A)True
B)False
Q4) There is only one method of accounting treatment for normal losses.
A)True
B)False
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Chapter 7: Activity-Based Costing: A Tool to Aid Decision Making
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126 Flashcards
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Sample Questions
Q1) The overhead cost per unit of Product B under the traditional costing system is closest to:
A) $22.38
B) $13.56
C) $73.74
D) $15.20
Q2) What would be the total overhead cost per order according to the activity-based costing system,rounded to the nearest whole cent? In other words,what would be the overall activity rate for the Filling Orders activity cost pool?
A) $273.00.
B) $292.50.
C) $302.00.
D) $312.00
Q3) Activity-based costing uses a number of activity cost pools,each of which is allocated to products on the basis of direct labour hours.
A)True
B)False
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Page 9
Chapter 8: Variable Costing: A Tool for Management
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Sample Questions
Q1) Variable costing is sometimes referred to as direct costing or marginal costing.
A)True
B)False
Q2) The total fixed manufacturing overhead costs of Cay Company are $100,000,and the total variable selling costs are $80,000.Under variable costing,how should these costs be classified?
\(\begin{array}{|l|l|}
\hline \text { Period Costs } & \text { Product Costs } \\
\hline \text { A) } \$ 0 & \$ 180,000 \\
\hline \text { B) } 80,000 & 100,000 \\
\hline \text { C) } 100,000 & 80,000 \\
\hline \text { D) } 180,000 & 0 \\
\hline
\end{array}\)
A) Option A
B) Option B
C) Option C
D) Option D
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10
Chapter 9: Budgeting
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Sample Questions
Q1) What total sales volume variance did Winnipeg Company report for January?
A) $3,500 U.
B) $9,000 U.
C) $25,000 U.
D) $27,500 U.
Q2) What are the budgeted cash disbursements for April?
A) $382,500.
B) $517,500.
C) $472,500.
D) $477,500.
Q3) The total overhead cost at an activity level of 5,200 guest-days per month should be:
A) $208,020
B) $230,880
C) $209,940
D) $190,920
Q4) The static budget is a good tool for assessing whether variable costs are under control or not.
A)True
B)False
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Chapter 10: Standard Costs and Overhead Analysis
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Sample Questions
Q1) In a certain standard costing system,the following results occurred last period: labour rate variance,$1,000 unfavourable; labour efficiency variance,$2,800 favourable; and the actual labour rate was $0.20 more per hour than the standard labour rate.What number of actual direct labour hours was used last period?
A) 4,800 hours.
B) 5,000 hours.
C) 5,400 hours.
D) 9,000 hours.
Q2) To record the incurrence of direct labour costs and its use in production,the general ledger would include what entry to the Labour Efficiency Variance account?
A) $240 debit.
B) $480 credit.
C) $1,200 debit.
D) $1,200 credit.
Q3) Purchase of poor quality materials will generally result in a favourable materials price variance and an unfavourable labour rate variance.
A)True
B)False
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Chapter 11: Reporting for Control
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Sample Questions
Q1) What was the minimum required rate of return for the past year?
A) 8%.
B) 12%.
C) 36%.
D) 40%.
Q2) What was the return on investment for the past year?
A) 8%.
B) 20%.
C) 28%.
D) 36%.
Q3) An increase in appraisal costs will usually result in an increase in internal failure costs.
A)True
B)False
Q4) If Axle sells 16,000 units per year,what would be the return on investment?
A) 12%.
B) 15%.
C) 16%.
D) 18%.
Q5) Describe the balanced scorecard concept and explain the reasoning behind it.
Page 13
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Chapter 12: Relevant Costs for Decision Making
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Sample Questions
Q1) The time and material approach pricing will result in attaining the company's desired profit only if forecasted billable activity is realized,holding all other things constant.
A)True
B)False
Q2) At what selling price per unit should Immanuel be indifferent between accepting or rejecting the special offer?
A) $4.90.
B) $6.40.
C) $7.40.
D) $7.70.
Q3) Two or more different products that are manufactured in the same production period are known as joint products.
A)True
B)False
Q4) In target costing,the anticipated competitive market price of a product determines its maximum allowable product cost.
A)True
B)False
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Chapter 13: Capital Budgeting Decisions
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Sample Questions
Q1) The present value of the total after-tax net cash inflows (outflows),excluding any CCA tax shield,in Year 4 is closest to which of the following? (Do not round your intermediate.)
A) ($7,105).
B) $23,684.
C) $35,525.
D) $38,269.
Q2) Why are the net present value and internal rate of return methods of capital budgeting superior to the payback method?
A) Because they are easier to implement.
B) Because they consider the time value of money.
C) Because they require less input.
D) Because they reflect the effects of depreciation and income taxes.
Q3) The payback period on the new machine is closest to which of the following?
A) 1.4 years.
B) 2.7 years.
C) 3.6 years.
D) 5.0 years.
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Chapter 14: Financial Statement Analysis
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Sample Questions
Q1) Larned Company's return on common shareholders' equity for Year 2 was closest to which of the following?
A) 26.9%.
B) 27.9%.
C) 29.8%.
D) 30.9%.
Q2) Laroche Company's dividend payout ratio for Year 2 was closest to which of the following?
A) 22.9%.
B) 38.0%.
C) 60.9%.
D) 62.4%.
Q3) Mariah Company had a times interest earned ratio of 3.0 for the year just ended.The company's tax rate was 40%,and the interest expense for the year was $25,000.What was Mariah Company's after-tax net income?
A) $25,000.
B) $30,000.
C) $50,000.
D) $75,000.
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Page 16