Financial Planning and Control
Exam Questions
Course Introduction
This course explores the fundamental principles and practices of financial planning and control within organizations. Students will learn how to develop financial plans, set strategic objectives, and implement budgeting processes to guide business decision-making. Topics include forecasting techniques, variance analysis, cost management, performance evaluation, and risk assessment. Emphasis is placed on the integration of financial information into long-term planning and the use of control mechanisms to monitor and improve organizational performance. The course prepares students to analyze financial data, create actionable plans, and apply tools for effective financial management in a variety of business contexts.
Recommended Textbook
Introduction to Managerial Accounting 8th Edition by Peter Brewer
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Chapter 1: Managerial Accounting and Cost Concepts
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Sample Questions
Q1) Which of the following is an example of a period cost in a company that makes clothing?
A)Fabric used to produce men's pants.
B)Advertising cost for a new line of clothing.
C)Factory supervisor's salary.
D)Monthly depreciation on production equipment.
Answer: B
Q2) If 4,000 units are sold, the total variable cost is closest to:
A)$67,000
B)$47,600
C)$51,400
D)$58,800
Answer: C
Q3) If 4,000 units are sold, the variable cost per unit sold is closest to:
A)$16.55
B)$11.60
C)$12.65
D)$14.60
Answer: C
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Chapter 2: Job-Order Costing: Calculating Unit Product Costs
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Sample Questions
Q1) Job cost sheets contain entries for actual direct material, actual direct labor, and actual manufacturing overhead cost incurred in completing a job.
A)True
B)False
Answer: False
Q2) The estimated total manufacturing overhead is closest to:
A)$416,003
B)$248,000
C)$664,000
D)$416,000
Answer: C
Q3) The unit product cost for Job T687 is closest to:
A)$99.00
B)$68.00
C)$172.50
D)$204.00
Answer: D
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Chapter 3: Job-Order Costing: Cost Flows and External Reporting
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256 Flashcards
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Sample Questions
Q1) The cost of goods manufactured for May was:
A)$97,110
B)$110,600
C)$98,770
D)$100,535
Answer: D
Q2) How much is the adjusted cost of goods sold on the Schedule of Cost of Goods Sold?
A)$136,000
B)$185,000
C)$144,000
D)$141,000
Answer: D
Q3) When raw materials are purchased, they are recorded as an asset.
A)True
B)False
Answer: True
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Chapter 4: Activity-Based Costing
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Sample Questions
Q1) If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the predetermined overhead rate would be closest to:
A)$32.59 per DLH
B)$44.54 per DLH
C)$69.99 per DLH
D)$93.63 per DLH
Q2) If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the overhead assigned to each unit of Product G2 would be closest to:
A)$839.88 per unit
B)$534.48 per unit
C)$1,123.56 per unit
D)$391.08 per unit
Q3) The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to:
A)$118.82 per DLH
B)$368.75 per DLH
C)$178.23 per DLH
D)$41.92 per DLH
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Page 6
Chapter 5: Process Costing6 Cost-Volume-Profit Relationships
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Sample Questions
Q1) In July, one of the processing departments at Okamura Corporation had beginning work in process inventory of $13,000 and ending work in process inventory of $18,000.During the month, the cost of units transferred out from the department was $148,000.In the department's cost reconciliation report for July, the total cost to be accounted for under the weighted-average method would be:
A)$31,000
B)$119,000
C)$132,000
D)$166,000
Q2) In the cost reconciliation report under the weighted-average method, the "Costs to be accounted for" section contains which of the following items?
A)Cost of beginning work in process inventory
B)Cost of ending work in process inventory
C)Cost of units transferred out
D)Cost of ending finished goods inventory
Q3) In a process costing system, costs are traced directly to jobs.
A)True
B)False
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Chapter 6: Cost-Volume-Profit Relationships
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Sample Questions
Q1) This question is to be considered independently of all other questions relating to Lemelin Corporation.Refer to the original data when answering this question. The marketing manager would like to introduce sales commissions as an incentive for the sales staff.The marketing manager has proposed a commission of $20 per unit.In exchange, the sales staff would accept a decrease in their salaries of $113,000 per month.(This is the company's savings for the entire sales staff.)The marketing manager predicts that introducing this sales incentive would increase monthly sales by 300 units.What should be the overall effect on the company's monthly net operating income of this change?
A)decrease of $224,500
B)increase of $107,000
C)increase of $1,500
D)increase of $806,500
Q2) The total volume in sales dollars that would be required to attain a given target profit is determined by dividing the target profit by the contribution margin ratio.
A)True
B)False
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Chapter 7: Variable Costing and Segment Reporting: Tools for Management
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Sample Questions
Q1) The net operating income (loss)under variable costing in Year 2 is closest to:
A)$31,000
B)$160,000
C)$200,000
D)$26,000
Q2) Variable costing net operating income is usually closer to the net cash flow of a period than is absorption costing net operating income.
A)True
B)False
Q3) All other things the same, if a division's traceable fixed expenses decrease then the division's segment margin will decrease.
A)True
B)False
Q4) The carrying value on the balance sheet of the ending inventory of finished goods under variable costing would be:
A)the same as absorption costing.
B)$6,800 greater than under absorption costing.
C)$6,800 less than under absorption costing.
D)$4,000 less than under absorption costing.
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Chapter 8: Master Budgeting
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Sample Questions
Q1) The selling and administrative expense budget lists all costs of production other than direct materials and direct labor.
A)True
B)False
Q2) The estimated cost of goods sold for February is closest to:
A)$846,000
B)$270,000
C)$738,000
D)$1,008,000
Q3) If 54,480 pounds of raw materials are required for production in June, then the budgeted raw material purchases for May is closest to:
A) 74,376 pounds
B) 44,640 pounds
C) 47,592 pounds
D) 60,984 pounds
Q4) The selling and administrative budget is typically prepared before the cash budget. A)True
B)False
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Chapter 10: Performance Measurement in Decentralized Organizations
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Sample Questions
Q1) The division's residual income is closest to:
A)$2,808,960
B)$4,088,960
C)$(3,027,840)
D)$1,528,960
Q2) The margin for this year's investment opportunity considered alone is closest to:
A)56.0%
B)50.0%
C)6.0%
D)44.0%
Q3) For the past year, the return on investment was:
A)6%
B)30%
C)18%
D)26%
Q4) The basic objective of responsibility accounting is to charge each manager with those costs and/or revenues over which he has control.
A)True
B)False
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Chapter 11: Differential Analysis: The Key to Decision Making
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Sample Questions
Q1) If management decides to buy part Z43 from the outside supplier rather than to continue making the part, what would be the annual financial advantage (disadvantage)?
A)($34,500)
B)($30,500)
C)($15,500)
D)($38,500)
Q2) If the special order from Woolgar Symphony Orchestra is accepted, the financial advantage (disadvantage)Bharu for the year should be:
A)$40,000
B)($10,000)
C)($22,000)
D)($28,000)
Q3) What is the financial advantage (disadvantage)for the company of processing Product X beyond the split-off point?
A)($3,500)
B)$27,700
C)$20,500
D)$3,700
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Page 12
Chapter 12: Capital Budgeting Decisions
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Sample Questions
Q1) The internal rate of return is computed by finding the discount rate that equates the present value of a project's cash outflows with the present value of its cash inflows.
A)True
B)False
Q2) (Ignore income taxes in this problem.)Jark Corporation has invested in a machine that cost $60,000, that has a useful life of six years, and that has no salvage value at the end of its useful life.The machine is being depreciated by the straight-line method, based on its useful life.It will have a payback period of four years.Given these data, the simple rate of return on the machine is closest to:
A)8.3%
B)7.2%
C)9.5%
D)25%
Q3) The simple rate of return for the new machine is closest to:
A)20%
B)37.5%
C)27.5%
D)80.0%
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Chapter 9: Flexible Budgets Standard Costs and Variance Analysis
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Sample Questions
Q1) The facility expenses in the flexible budget for January would be closest to:
A)$24,793
B)$24,023
C)$24,070
D)$24,953
Q2) The facility expenses in the flexible budget for January would be closest to:
A)$22,660
B)$21,996
C)$22,653
D)$22,852
Q3) The labor efficiency variance for January is:
A)$4,246 U
B)$4,246 F
C)$4,400 U
D)$4,400 F
Q4) The facility expenses in the flexible budget for January would be closest to:
A)$14,157
B)$14,712
C)$15,170
D)$15,062
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Chapter 13: Statement of Cash Flows
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Sample Questions
Q1) Paying taxes to governmental bodies is considered a cash outflow in the operating activities section on the statement of cash flows.
A)True
B)False
Q2) What is Stone's net cash provided by (used in)operating activities?
A)$(18,000)
B)$(33,000)
C)$69,000
D)$84,000
Q3) Which of the following would be considered a cash inflow in the financing activities section of the statement of cash flows?
A)Issuing bonds payable.
B)Receiving cash from customers.
C)Sale of equipment.
D)Collection of a loan made to another company.
Q4) The direct method of preparing the statement of cash flows will show the same increase or decrease in cash as the indirect method.
A)True
B)False
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Chapter 14: Financial Statement Analysis
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Sample Questions
Q1) All other things the same, when a company increases its inventories in anticipation of later higher sales, the accounts receivable turnover ratio for the current period increases.
A)True
B)False
Q2) The company's inventory turnover for Year 2 is closest to:
A)5.17
B)5.56
C)6.00
D)0.86
Q3) The company's total asset turnover for Year 2 is closest to:
A)5.29
B)0.19
C)1.04
D)0.96
Q4) The formula for the times interest earned ratio is: Times interest earned = Earnings before interest expense and income taxes ÷ Interest expense.
A)True
B)False
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Page 16
Chapter 15: Job-Order Costing: Cost Flows and External Reporting
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Sample Questions
Q1) In the Excel, or spreadsheet, approach to recording financial transactions, direct labor paid in cash is recorded as a decrease in the Cash column and as an increase in the Work in Process column.
A)True
B)False
Q2) In the Excel, or spreadsheet, approach to recording financial transactions, cash paid to creditors is recorded as a decrease in the Cash column and as a decrease in the Retained Earnings column.
A)True
B)False
Q3) In the Excel, or spreadsheet, approach to recording financial transactions, an advertising expense paid in cash is recorded as a decrease in the Cash column and as a decrease in the Retained Earnings column.
A)True
B)False
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Chapter 16: Process Costing6 Cost-Volume-Profit Relationships
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Sample Questions
Q1) What are the equivalent units for materials for the month in the first processing department?
A)975
B)8,250
C)9,300
D)7,100
Q2) Using the weighted-average method, the equivalent units for materials for March would be:
A)65,000
B)67,000
C)68,050
D)70,000
Q3) In February, one of the processing departments at Encinias Corporation had beginning work in process inventory of $27,000 and ending work in process inventory of $21,000.During the month, $316,000 of costs were added to production and the cost of units transferred out from the department was $322,000.The company uses the FIFO method in its process costing system. Required:
Construct a cost reconciliation report for the department for the month of February.
Page 18
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Chapter 17: Cost-Volume-Profit Relationships
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Sample Questions
Q1) Using the high-low method, the estimate of the fixed component of office expense per month is closest to:
A)$7,685
B)$7,182
C)$6,678
D)$5,182
Q2) The R<sup>2</sup> (i.e., R-squared)tells us the percentage of the variation in the dependent variable (cost)that is explained by variation in the independent variable (activity).
A)True
B)False
Q3) The best estimate of the total monthly fixed manufacturing cost is:
A)$221,200
B)$391,800
C)$173,800
D)$126,400
Q4) The highest and lowest costs are always used to analyze a mixed cost under the high-low method.
A)True
B)False
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Chapter 18:Flexible Budgets, Standard Costs, and Variance Analysis
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Sample Questions
Q1) The fixed component of the predetermined overhead rate is closest to:
A)$8.25 per machine-hour
B)$12.38 per machine-hour
C)$5.69 per machine-hour
D)$8.54 per machine-hour
Q2) The economic impact of the inability to reach a target denominator level of activity would best be measured by:
A)the amount of the volume variance.
B)the contribution margin lost by failing to meet the target denominator level of activity.
C)the amount of the fixed manufacturing overhead budget variance.
D)the amount of the variable overhead efficiency variance.
Q3) The fixed overhead budget variance is:
A)$2,856 U
B)$15,000 F
C)$2,856 F
D)$15,000 U
Q4) There can be no volume variance for variable manufacturing overhead.
A)True
B)False
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Chapter 19: Flexible Budgets, Standard Costs, and Variance Analysis
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Sample Questions
Q1) When the direct labor cost is recorded, which of the following entries will be made?
A)($11,912)in the Labor Rate Variance column
B)$11,912 in the Labor Efficiency Variance column
C)($11,912)in the Labor Efficiency Variance column
D)$11,912 in the Labor Rate Variance column
Q2) When the direct labor cost is recorded in transaction (c)above, which of the following entries will be made?
A)($6,150)in the Labor Rate Variance column
B)$6,150 in the Labor Efficiency Variance column
C)$6,150 in the Labor Rate Variance column
D)($6,150)in the Labor Efficiency Variance column
Q3) The adjusted Cost of Goods Sold after closing all of the variances to Cost of Goods Sold will be closest to:
A)$1,128,750
B)$1,262,370
C)$1,195,560
D)$1,303,710
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Chapter 20: A Capital Budgeting Decisions
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Sample Questions
Q1) (Ignore income taxes in this problem.)How much would you have to invest today in the bank at an interest rate of 8% to have an annuity of $4,800 per year for 7 years, with nothing left in the bank at the end of the 7 years? Select the amount below that is closest to your answer.
A)$33,600
B)$2,798
C)$24,989
D)$31,111
Q2) (Ignore income taxes in this problem.)A company wants to have $40,000 at the end of a five-year period through investment of a single sum now.How much needs to be invested in order to have the desired sum in five years, if the money can be invested at 10%:
A)$10,551
B)$8,000
C)$24,840
D)$12,882
Q3) The present value of a given future cash flow will decrease as the discount rate decreases.
A)True
B)False
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Chapter 21: A Statement of Cash Flows
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Sample Questions
Q1) The net cash provided by (used in)financing activities for the year was:
A)$(42)
B)$3
C)$11
D)$(28)
Q2) The ending balance of accounts receivable was $69,000.Sales, adjusted to a cash basis using the direct method on the statement of cash flows, were $354,000.Sales reported on the income statement were $378,000.Based on this information, the beginning balance in accounts receivable was:
A)$93,000
B)$24,000
C)$94,000
D)$45,000
Q3) On the statement of cash flows, the income tax expense adjusted to a cash basis would be:
A)$47,000
B)$39,000
C)$31,000
D)$49,000
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