Intermediate Managerial Accounting Practice
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Course Introduction
Intermediate Managerial Accounting builds on foundational accounting concepts to deepen students understanding of how financial information supports internal decision-making processes. This course covers advanced topics such as budgeting, cost-volume-profit analysis, performance evaluation, variance analysis, and activity-based costing. Emphasizing the development of analytical skills, students learn how managers use accounting data to plan operations, control activities, and make strategic business decisions. Case studies and real-world scenarios allow students to apply theoretical concepts and develop practical competencies needed for careers in management accounting and business leadership.
Recommended Textbook Cornerstones of Managerial Accounting 3rd Canadian Edition by Maryanne Mowen
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14 Chapters
2190 Verified Questions
2190 Flashcards
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Chapter 1: Introduction to Managerial Accounting
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Sample Questions
Q1) What are the establishing objectives to include social and environmental impact called?
A)triple accounting
B)triple bottom line
C)triple cost analysis
D)triple threat
Answer: B
Q2) The controller is the Chief Executive Officer of a company.
A)True
B)False
Answer: False
Q3) Which of the following is a characteristic of financial accounting?
A)It has no regulatory or mandatory rules.
B)It is internally focused.
C)It is concerned with the firm as a whole.
D)It has an emphasis on the future.
Answer: C
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Page 3
Chapter 2: Basic Managerial Accounting Concepts
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Sample Questions
Q1) The T & T Company makes fishing rods.During the current month,direct materials costing $126,000 were put into production.Direct labour costs of $110,000 were incurred and overhead equalled $100,000.Selling and administrative expenses totalled $66,000 for the month,and the company manufactured 3,500 fishing rods.Assume there was no beginning inventory and that 3,000 fishing rods were sold.
Required:
A. Compute the per-unit product cost.
B. Compute the per-unit prime cost.
C. Compute the per-unit conversion cost.
D. What is cost of goods sold for the month?
E. What is the cost of ending finished goods for the month?
Answer: A. \(\quad ( \$ 126,000 + \$ 110,000 + \$ 100,000 ) / 3,500 = \$ 96\)
B. \(\quad ( \$ 126,000 + \$ 110,000 ) / 3,500 = \$ 67.43\)
C. \(\quad ( \$ 110,000 + \$ 100,000 ) / 3,500 = \$ 60\)
D. \(\quad ( \$ 96 \times 3,000 ) = \$ 288,000\)
E. \(\quad ( \$ 96 \times 500 ) = \$ 48,000\)
Q2) Costs are directly,NOT indirectly,associated with cost objects.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Cost Behaviour
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Sample Questions
Q1) Which of the following is an advantage of using the method of least squares rather than the high-low method?
A)It can be calculated without a calculator.
B)Two points are used to develop the cost function.
C)For a given set of data, it will always produce the same cost formulae.
D)The outlying observations have no effect on the cost function when the calculations are complete.
Answer: C
Q2) Mixed costs have both a fixed and a discretionary component.
A)True
B)False
Answer: True
Q3) Refer to the Figure.Assume that 400 machine hours are budgeted.What would be the budgeted cost for maintenance next month?
A)$985
B)$2,943
C)$3,928
D)$4,913
Answer: D
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Page 5
Chapter 4: Costvolumeprofit Analysis: a Managerial Planning Tool
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Sample Questions
Q1) Which of the following should be used to compute the sales mix so that the break-even computation is meaningful to management?
A)the expected mix
B)the most desirable mix
C)the least desirable mix
D)the traditional mix
Q2) What is the term for the units sold or expected to be sold,or the sales revenue earned or expected to be earned,above the break-even volume?
A)margin of safety
B)operating leverage
C)break-even point
D)contribution margin
Q3) At the break-even point,revenue is equal to the contribution margin.
A)True
B)False
Q4) The linear equation for total cost is (unit variable cost × units)+ fixed cost.
A)True
B)False
Q5) How can a multi-product firm determine its break-even point?
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Chapter 5: Job-Order Costing
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Sample Questions
Q1) The journal entry for overhead applied at the rate of $3 per direct labour hour when 210 direct labour hours were worked is:
\(\begin{array} { | l | l | l | }
\hline
\text { Work in Process }& 630 \\
\text { Applied Overhead }&& 630\\
\hline
\end{array}\)
A)True
B)False
Q2) In job-order costing,the journal entry for $7,200 raw materials requisitioned for use in production is:
\(\begin{array} { | c | l | l | }
\hline \text { Raw Materials } & 7,200 & \\
\text { Work in Process } && 7,200 \\
\hline
\end{array}\)
A)True
B)False
Q3) Discuss overapplied and underapplied overhead.
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Chapter 6: Process Costing
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Sample Questions
Q1) The costs transferred from a prior process to a subsequent process are referred to as transferred-out costs.
A)True
B)False
Q2) Similar percentage completion figures for manufacturing inputs pose a problem for the calculation of equivalent units,unit cost,and valuation of ending work in process.
A)True B)False
Q3) Which two methods determine the equivalent units of production in process costing?
A)weighted average and FIFO
B)FIFO and LIFO
C)actual costing and LIFO
D)weighted average and actual costing
Q4) Equivalent units of output are the complete units that could have been produced given the total amount of manufacturing effort expended for the period under consideration.
A)True B)False
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Chapter 7: Activity-Based Costing and Management
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Sample Questions
Q1) A production dictionary lists the activities in an organization along with some critical activity attributes.
A)True B)False
Q2) A company takes 10,000 hours to produce 20,000 units of a product.What is the cycle time?
A)0.50 hour
B)0.75 hour
C)1.00 hour
D)2.00 hours
Q3) Environmental costs are costs that are incurred because poor environmental quality exists.
A)True B)False
Q4) Activities necessary to remain in business are called value added activities. A)True B)False
Q5) A work distribution matrix is derived from an interview or a written survey. A)True B)False
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Chapter 8: Absorption and Variable Costing, and Inventory Management
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Sample Questions
Q1) If the number of units produced in a period is smaller than the number of units sold in period,absorption costing income will be higher than variable costing income.
A)True
B)False
Q2) Administrative expense
A)Variable costing income statement
B)Absorption costing income statement
C)Both types of income statements
Q3) Which of the following would NOT be considered a segment?
A)a division
B)a product line
C)a sales territory
D)a corporation
Q4) Refer to the Figure.What is the May ending inventory for Theele Corporation when using the absorption costing method?
A)$39,000
B)$45,000
C)$148,500
D)$300,000
10
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Chapter 9: Budgeting, production, cash, and Master Budget
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Sample Questions
Q1) Which of the following do many companies use when preparing the overhead budget?
A)activity-based costing
B)multiple drivers for a simple budget
C)participative costing
D)a unit-based driver such as direct labour hours
Q2) Myopic behaviour is one of the advantages of participative budgeting.
A)True
B)False
Q3) Flight Company makes luggage.One popular model is the Traveller (a 50 cm wheeled carry-on).Budgeted sales for this model are:
Desired ending inventory is 20% of the next month's sales.Inventory on March 1 is 3,500 units.Prepare a production budget for as many months as possible.
\(\begin{array}{ll}\text { Month }&\text { Unit Sales }\\
\text { March } & 28,000 \\
\text { April } & 35,000 \\
\text { May } & 48,000 \\
\text { June } & 80,000
\end{array}\)
Q4) Describe some problems with participative budgeting.
Page 11
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Chapter 10: Standard Costing: a Managerial Control Tool
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Sample Questions
Q1) Standards of perfection that require absolute efficiency.
A)Quantity standards
B)Ideal standards
C)Price standards
D)Standard cost sheet
E)Upper control limit
F)Currently attainable standards
G)Kaizen standards
Q2) A kaizen standard reflects the realized improvements for the past periods and a search for more improvements for the future.
A)True
B)False
Q3) Refer to the Figure.At the end of December,Cakers Express found that it had a favourable materials price variance of $1,000.What is the flour's standard cost per kilogram?
A)$0.95
B)$1.00
C)$1.05
D)$1.95
Q4) How are standards developed?
Page 12
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Chapter 11: Flexible Budgets and Overhead Analysis
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Sample Questions
Q1) Refer to the Figure.What is the variable overhead spending variance?
A)$24,000 U
B)$24,000 F
C)$136,900 U
D)$136,900 F
Q2) Refer to the Figure.
Required:
A. Prepare an overhead budget for the expected activity level for the coming year.
B. Prepare an overhead budget that reflects production that is 10% higher than expected (for both products).
C. Prepare an overhead budget that reflects production that is 10% lower than expected (for both products).
Q3) Which of the following is NOT a function of activity flexible budgeting?
A)improving performance reporting
B)allowing the prediction of activity costs as activity output changes
C)estimating revenues and costs by organizational units
D)improving the ability to plan and monitor activity improvements
Q4) Define static budget and flexible budget.What is each type used for?
Q5) What is a performance report?
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Chapter 12: Performance Evaluation and Decentralization
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Sample Questions
Q1) is the practice of delegating decision-making authority to lower levels.
A)Centralization
B)Revenue centre
C)Profit centre
D)Cost centre
E)Investment centre
F)Decentralization
Q2) The company as a whole may be harmed when divisions refuse to transfer goods with a market price transfer policy.
A)True
B)False
Q3) Refer to the Figure.What are the average operating assets for Division B?
A)$5,000
B)$25,000
C)$125,000
D)$208,333
Q4) How is EVA (economic value added)different from standard residual income calculations?
Q5) What are the advantages and disadvantages of return on investment (ROI)?
Q6) What is Strategy?
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Chapter 13: Short-Run Decision Making: Relevant Costing
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Q1) The second step in making a short-run decision is to define the problem.
A)True
B)False
Q2) Refer to the Figure.What is the contribution margin per unit of scarce resource (machine time)for Model K-3?
A)$6
B)$12
C)$14
D)$24
Q3) Sasha Company produced 50 defective units last month at a unit manufacturing cost of $40.The defective units were discovered before leaving the plant.Sasha can sell them "as is" for $30 or can rework them at a cost of $25 and sell them at the regular price of $60.Which of the following is NOT relevant to the sell-or-rework decision?
A)$25 for rework
B)$30 selling price of defective units
C)$40 manufacturing cost
D)$60 regular selling price
Q4) What are the six steps of the decision-making model?
Q5) Why does a special-order decision frequently ignore fixed factory overhead?
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Chapter 14: Capital Investment Decisions
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Sample Questions
Q1) Projects that affect the cash flows of other projects are called independent projects.
A)True
B)False
Q2) Which of the following measure results in the time required for a firm to recover its original investment?
A)the internal rate of return
B)the net present value
C)the life of the project
D)the payback period
Q3) Which of the following is NOT an advantage of postaudits?
A)They evaluate profitability rather than cash flows.
B)They may point to the need for additional funding for the project.
C)They tend to hold managers accountable for capital investment decision making.
D)The assumptions driving the original analysis may be invalidated by changes in the actual operating environment.
Q4) Taxes are NOT an important consideration in forecasting cash flows.
A)True
B)False
Q5) What are the limitations of Accounting Rate of Return?
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