Intermediate Management Accounting Exam
Bank
Course Introduction
Intermediate Management Accounting builds on foundational accounting principles to deepen students' understanding of managerial accounting practices and decision-making processes. The course covers topics such as cost behavior analysis, budgeting, performance evaluation, variance analysis, and the use of accounting information in planning and controlling organizational activities. Students will engage in the application of techniques for internal reporting, strategic decision-making, and the evaluation of business operations, preparing them to analyze financial data more effectively and contribute to organizational goals.
Recommended Textbook
Managerial accounting 10th Canadian Edition by Ray Garrison
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Chapter 1: Managerial Accounting and the Business Environment
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Q1) Companies that choose an operational excellence strategy are in essence saying to their customers,"Choose us rather than our competitors because we strive for zero defects."
A)True
B)False
Answer: False
Q2) Which of the following best describes the role of a staff position in an organization?
A) It relates directly to the carrying out of the basic objectives of the organization.
B) It is supportive in nature,providing service and assistance to other parts of the organization.
C) It is superior in authority to a line position.
D) It receives assistance from other parts of organization It relates directly to achieve the basic objectives of organization embedded in them and it is superior in authority to a line position.
Answer: B
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Chapter 2: Cost Terms, Concepts, and Classifications
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Q1) Manufacturing overhead combined with direct materials is known as conversion cost.
A)True
B)False
Answer: False
Q2) What was the cost of goods manufactured (finished)for the year (in thousands of dollars)?
A) $450.
B) $460.
C) $530.
D) $540.= 170 + 100 + 190 + 70 - 80 = $450
Answer: A
Q3) What does conversion cost consist of?
A) Manufacturing overhead cost.
B) Direct materials and direct labour cost.
C) Direct labour cost.
D) Direct labour and manufacturing overhead cost.
Answer: D
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Chapter 3: Cost Behaviour: Analysis and Use
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Q1) Modern technology is causing shifts away from variable costs toward more fixed costs in many industries.
A)True
B)False
Answer: True
Q2) Contribution margin is the excess of revenues over which of the following?
A) Cost of goods sold.
B) Manufacturing cost.
C) All direct costs.
D) All variable costs.
Answer: D
Q3) What is the expected gross margin next month?
A) $11,200.
B) $14,400.
C) $16,400.
D) $17,600.
Answer: D
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Page 5
Chapter 4: Cost-Volume-Profit Relationships
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Q1) What is the break-even point in units per year?
A) 15,200 units.
B) 26,600 units.
C) 38,000 units.
D) 40,000 units.FC = 208,000 + 324,000 = $532,000.B/E = 532,000/14 = 38,000 units.
Q2) Last year,Twins Company reported $750,000 in sales (25,000 units)and an operating income of $25,000.At the break-even point,the company's total contribution margin equals $500,000.Based on this information,which of the following statements is true?
A) The company's contribution margin ratio is 40%.
B) The company's break-even point is 24,000 units.
C) The company's variable expense per unit is $9.
D) The company's variable expenses are 60% of sales.
Q3) What is the company's margin of safety percentage?
A) 25%.
B) 20%.
C) 40%.
D) 10%.
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Chapter 5: Systems Design: Job-Order Costing
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Q1) What is the indirect labour cost?
A) $5,000.
B) $12,000.
C) $15,000.
D) $35,000.
Q2) Job cost sheets supporting a normal job-order costing system contain entries for actual direct material,actual direct labour,and actual manufacturing overhead cost incurred in completing a job.
A)True
B)False
Q3) In a job-order costing system,direct labour costs usually are recorded initially with a debit to which of the following accounts?
A) Manufacturing Overhead.
B) Finished Goods inventory.
C) Direct Labour Expense.
D) Work in Process.
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Chapter 6: Systems Design: Process Costing
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Q1) Using the weighted-average method,the total cost of the units in ending work-in-process inventory is closest to which of the following?
A) $156,960.
B) $86,400.
C) $153,960.
D) $154,800.
Q2) The "Total cost accounted for" section of the production report for October will show an amount equal to which of the following?
A) $110,000.
B) $391,250.
C) $350,000.
D) $428,750.
Q3) Assuming that the company uses the weighted-average method,what is the cost per equivalent unit for conversion costs for June,rounded to the nearest cent?
A) $1.64.
B) $1.56.
C) $1.74.
D) $1.48.
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Chapter 7: Activity-Based Costing: a Tool to Aid Decision Making
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Q1) How much cost,in total,should not be allocated to orders and customer support in the second stage of the allocation process if the activity-based costing system is used for internal decision making?
A) $0.
B) $82,000.
C) $104,000.
D) $164,000.
Q2) How much cost,in total,would be allocated in the first-stage allocation to the Customer Support activity cost pool?
A) $116,000.
B) $304,500.
C) $428,000.
D) $493,000.
Q3) (Appendix 7A)The total cost of a unit of product C43S under the activity-based costing system is closest to:
A) $165.34
B) $233.26
C) $162.22
D) $105.34
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Chapter 8: Variable Costing: a Tool for Management
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Q1) Which of the following costs/expenses is included in product costs under both absorption costing and variable costing?
A) Supervisory salaries.
B) Office equipment depreciation.
C) Variable manufacturing costs.
D) Variable selling expenses.
Q2) What was the total period cost for the month under the variable costing approach?
A) $140,300.
B) $140,800.
C) $232,300.
D) $281,100.
Q3) Absorption costing treats fixed manufacturing overhead as a period cost,rather than as a product cost.
A)True
B)False
Q4) Sales volume is the only driver of operating income under absorption costing.
A)True
B)False
Q5) The following information pertains to Malcolm Corporation for a period:
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Chapter 9: Budgeting
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Q1) In a budgeted balance sheet,what would be the merchandise inventory on February 28?
A) $3,200.
B) $4,800.
C) $7,500.
D) $9,600.
Q2) What are the budgeted cash disbursements for December?
A) $382,500.
B) $442,500.
C) $472,500.
D) $477,500.
Q3) What would be the expected cash disbursements during April for operating expenses?
A) $15,000.
B) $23,000.
C) $30,000.
D) $38,000.
Q4) Budgets are used for planning rather than for control of operations. A)True B)False
Page 11
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Chapter 10: Standard Costs and Overhead Analysis
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Sample Questions
Q1) Under which product costing system for a manufacturing company would there be no fixed manufacturing overhead volume variance?
A) Standard absorption costing.
B) Standard variable costing.
C) Job order costing.
D) Process costing.
Q2) What was the amount of fixed manufacturing overhead cost applied to work in process during September?
A) $54,150.
B) $57,000.
C) $59,850.
D) $61,400.
Q3) The production manager is usually held responsible for the labour efficiency variance.
A)True
B)False
Q4) Standard costs should generally be based on the actual costs of prior periods.
A)True
B)False
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Chapter 11: Reporting for Control
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Sample Questions
Q1) Since the sales figure is neutral in the return on investment (ROI)formula,ROI = Margin x Turnover,a change in total sales will NOT affect ROI.
A)True B)False
Q2) Segmented statements for internal use should be prepared in the contribution format.
A)True B)False
Q3) (Appendix 11A)What will be the total appraisal cost appearing on the quality cost report?
A) $102,000.
B) $108,000.
C) $121,000.
D) $247,000.
Q4) What were Ieso Company's total fixed expenses for the year?
A) $40,000.
B) $100,000.
C) $140,000.
D) $170,000.
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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Q1) Suppose the company is already operating at capacity when the special order is received from the overseas customer.What would be the opportunity cost of each unit delivered to the overseas customer?
A) $7.20.
B) $8.40.
C) $9.70.
D) $32.50.
Q2) What maximum amount (rounded to the nearest whole cent)should the company be willing to pay for one additional minute of grinding machine time if the company has made the best use of the existing grinding machine capacity?
A) $0.
B) $10.60.
C) $19.25. D) $21.90.
Q3) Opportunity costs are recorded in the accounts of an organization. A)True B)False
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Chapter 13: Capital Budgeting Decisions
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Q1) (Appendix 13A and 13B)A company anticipates a capital cost allowance (CCA)deduction of $20,000 in year 2 of a project.The company's tax rate is 30%,and its discount rate is 12%.What is the approximate present value of the CCA tax shield resulting from this deduction? (Do not round your intermediate calculations and round the final answer to the nearest whole dollar. )
A) $4,783.
B) $6,000.
C) $11,161.
D) $14,000.
Q2) (Appendix 13A)Kipling Company has invested in a project that has an eight-year life.It is expected that the annual cash inflow from the project will be $20,000.Assuming that the project has an internal rate of return of 12%,how much was the initial investment in the project? (Ignore income taxes in this problem. )(Round your PV factor to 5 decimal places and final answer to nearest whole dollar amount. )
A) $64,648.
B) $80,800.
C) $99,353.
D) $160,000.
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Chapter 14: Financial Statement Analysis Online
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Q1) Karma Company has total assets of $190,000 and total liabilities of $90,000.The company's debt-to-equity ratio is closest to which of the following?
A) 0.32 to 1.
B) 0.47 to 1.
C) 0.53 to 1.
D) 0.90 to 1.
Q2) Marcial Company's average sale period (turnover in days)for Year 2 was closest to which of the following? Do not round intermediate calculations.
A) 24.6 days.
B) 30.2 days.
C) 35.2 days.
D) 43.2 days.
Q3) Orange Company's accounts receivable turnover for Year 2 was closest to which of the following?
A) 11.0 times.
B) 12.4 times.
C) 15.7 times.
D) 17.7 times.
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