Introduction to Management Accounting Exam Review
Course Introduction
Introduction to Management Accounting provides students with a foundational understanding of how accounting information is used by managers within organizations to make informed business decisions. The course covers essential topics such as cost classification, allocation, and behavior; budgeting and forecasting; performance measurement; and variance analysis. Students will learn how to prepare, interpret, and apply management accounting reports and tools to support planning, controlling, and decision-making processes. Practical cases and real-world examples help bridge theory with actual business practices, equipping students with the analytical skills needed to add value in a managerial accounting context.
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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66 Verified Questions
66 Flashcards
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Sample Questions
Q1) Management accounting information is important for both for-profit and not-for-profit organizations.
A)True
B)False
Answer: True
Q2) 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
Q3) Which of the following is a characteristic of activity-based costing?
A)It is a traditional costing method.
B)It encourages process-value analysis.
C)It always results in a lower cost assigned to goods or services.
D)It assigns shared costs to jobs.
Answer: B
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Chapter 2: Basic Managerial Accounting Concepts
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222 Verified Questions
222 Flashcards
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Sample Questions
Q1) A&W Restaurant
A)Tangible
B)Intangible Answer: A
Q2) Cost of shipping goods to customers
A)Selling expense
B)Administrative expense
C)Direct materials
D)Direct labour
E)Overhead Answer: A
Q3) Research and development costs
A)Period
B)Product Answer: A
Q4) An opportunity cost is the benefit given up or sacrificed when one alternative is chosen over another.
A)True
B)False Answer: True
Page 4
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Chapter 3: Cost Behaviour
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222 Verified Questions
222 Flashcards
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Sample Questions
Q1) What is a committed fixed cost for a coffee shop?
A)property taxes
B)coffee cups
C)coffee beans
D)barista wages
Answer: A
Q2) Depreciation of robotic equipment
A)Variable
B)Fixed
Answer: B
Q3) Refer to the Figure.What is the cost formula for maintenance cost when using the result of regression?
A)$985 × machine hours
B)($4,686 ? $3,956)/(386 ? 310)
C)$9.82 × machine hours
D)$985 + ($9.82 × machine hours)
Answer: D
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Chapter 4: Costvolumeprofit Analysis: a Managerial Planning Tool
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161 Verified Questions
161 Flashcards
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Sample Questions
Q1) Refer to the Figure.What is the break-even point in sales dollars?
A)$21,670
B)$28,000
C)$58,330
D)$80,000
Q2) What formula is used to calculate the sales dollars needed to earn a desired profit?
A)(fixed costs + contribution margin)/(1 variable cost ratio)
B)(fixed costs + desired profit)/(1 variable cost ratio)
C)(fixed costs + variable costs)/(1 variable cost ratio)
D)(fixed costs + desired profit)/(1 sales ratio)
Q3) Which of the following is NOT an assumption used to prepare a cost-volume-profit graph?
A)Linear costs are within the relevant range.
B)Units produced equals units sold.
C)The sales mix is constant.
D)The constant cost fluctuates.
Q4) The contribution margin ratio is equal to the 1 minus the variable cost ratio.
A)True
B)False
Page 6
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Chapter 5: Job-Order Costing
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177 Verified Questions
177 Flashcards
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Sample Questions
Q1) White Mountain Company produces various types of snow skis.Estimated overhead for the year was $780,000 and estimated direct labour hours were 260,000.During the month of June,18,100 direct labour hours were worked,$55,400 of direct materials were used,and the average wage was $15 per hour.In June,10,000 pairs of skis were produced.
A. Calculate the predetermined overhead rate.
B. Calculate the overhead applied to production for June.
C. Calculate unit cost for each pair of skis.
Q2) A single overhead rate calculated using all estimated overhead for a factory divided by the estimated activity level across the entire factory
A)Predetermined overhead rate
B)Plantwide overhead rate
C)Departmental overhead rate
D)Overhead variance
E)Overapplied overhead
F)Underapplied overhead
G)Applied overhead
H)Normal cost of goods sold
Q3) Discuss overapplied and underapplied overhead.
Q4) What are the three steps of overhead application?
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Chapter 6: Process Costing
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157 Verified Questions
157 Flashcards
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Sample Questions
Q1) Refer to the Figure.What would be the equivalent unit conversion cost for October when using the weighted average method?
A)$5.65
B)$5.83
C)$6.00
D)$6.41
Q2) In parallel processing,two subcomponents can be worked on simultaneously in different processes and then brought together in a final process for completion.
A)True
B)False
Q3) Any product or service that is basically homogeneous and repetitively produced can take advantage of a process-costing approach.
A)True
B)False
Q4) Process costing accumulates costs by individual jobs rather than by processing departments.
A)True
B)False
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Chapter 7: Activity-Based Costing and Management
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154 Verified Questions
154 Flashcards
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Sample Questions
Q1) Activity drivers should be classified as either internal or external.
A)True
B)False
Q2) Which of the following is defined as a category of quality-related costs?
A)invention
B)controller
C)internal control
D)external failure
Q3) What is the term for a list of activities accompanied by information that describes each activity?
A)an activity manifesto
B)an activity journal
C)an activity dictionary
D)an activity note
Q4) Which ratio measures the proportion of an activity consumed by a product?
A)production ratio
B)consumption ratio
C)efficiency ratio
D)quality ratio
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Chapter 8: Absorption and Variable Costing, and Inventory Management
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97 Verified Questions
97 Flashcards
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Sample Questions
Q1) Refer to the Figure.Assume that beginning inventory was zero.What is the value of ending inventory under variable costing?
A)$2,000
B)$3,000
C)$3,720
D)$5,000
Q2) Variable selling expense
A)Variable costing income statement
B)Absorption costing income statement
C)Both types of income statements
Q3) Refer to the Figure.What is the value of the ending inventory using the absorption costing method?
A)$240,000
B)$360,000
C)$420,000
D)$600,000
Q4) JIT relies on a push system to control finished goods inventory.
A)True
B)False
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Q5) What are the traditional reasons for carrying inventory?
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Chapter 9: Budgeting, production, cash, and Master Budget
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165 Verified Questions
165 Flashcards
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Sample Questions
Q1) Which of the following budgets would be most important to bank loan officers when determining whether to give a company a loan?
A)sales budget
B)cash budget
C)budgeted income statement
D)budgeted balance sheet
Q2) Sessional Company finds that typically 30% of a month's sales are paid in cash.Payments on accounts receivable are 60% in the month of sale and 38% in the month following sale.Budgeted sales for June are $100,000,for July are $140,000,and for August are $120,000.What are the total cash receipts budgeted for July?
A)$85,400
B)$122,000
C)$127,400
D)$140,000
Q3) Comparing actual results with budgeted results on a periodic basis provides planning in a budgetary system.
A)True
B)False
Q4) What are the advantages of budgeting?
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Chapter 10: Standard Costing: a Managerial Control Tool
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173 Verified Questions
173 Flashcards
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Sample Questions
Q1) Acting Company has the following information:
\(\begin{array}{lrlr}\text { Direct Materials: }&&\text { Direct Labour: }\\
\text { Standard Quantity } & 11,000 & \text { Standard Hours } & 3,000 \\
\text { Actual Quantity } & 13,000 & \text { Actual Hours } & 2,875 \\
\text { Standard Price } & \$ 15 & \text { Standard Rate } & \$ 1 2\\
\text { Actual Price } & \$ 13 & \text { Actual Rate } & \$ 13 \end{array}\) A. Determine the materials price variance and whether it is favourable or unfavourable.
B. Determine the materials usage variance and whether it is favourable or unfavourable.
C. Determine the labour rate variance and whether it is favourable or unfavourable.
D. Determine the labour efficiency variance and whether it is favourable or unfavourable.
Q2) Which formula is used to calculate the labour rate variance?
A)(actual rate × actual hours) (standard rate × standard hours)
B)(standard rate × actual rate) (actual rate × actual hours)
C)(actual rate × standard hours) (standard rate × actual hours)
D)(actual rate × actual hours) (standard rate × actual hours)
Q3) How are standards developed?
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Chapter 11: Flexible Budgets and Overhead Analysis
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149 Verified Questions
149 Flashcards
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Sample Questions
Q1) Which of the following is characteristic of a performance report?
A)It uses static budgets.
B)It compares actual costs with budgeted costs.
C)It usually uses flexible budgets.
D)It does not include variances.
Q2) What is the formula for total fixed overhead variance?
A)total actual overhead total applied overhead
B)AFOH standard overhead rate × SH
C)AFOH SFOR × SH
D)AFOH SFOR × AH
Q3) Although general responsibility for the volume variance is usually assigned to the purchasing department,responsibility on occasion may be assigned to the production department.
A)True
B)False
Q4) Refer to the Figure.What is the fixed overhead volume variance?
A)$8,000 U
B)$24,000 U
C)$28,000 F
D)$32,000 F
Page 13
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Chapter 12: Performance Evaluation and Decentralization
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145 Verified Questions
145 Flashcards
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Sample Questions
Q1) Refer to the Figure.What is the residual income for Gamma Division with the additional project?
A)$4,200
B)$6,000
C)$6,600
D)$27,600
Q2) What does the process value chain consist of?
A)value, operations, and objectives
B)satisfaction, innovation, and value
C)innovation, operations, and postsales service
D)design, production, and selling
Q3) Which of the following is NOT an advantage of ROI?
A)It encourages managers of departments with high ROIs to invest in average ROI projects.
B)It encourages managers to pay careful attention to the relationships among sales, expenses, and investment.
C)It encourages cost efficiency.
D)It discourages excessive investment in operating assets.
Q4) How is EVA (economic value added)different from standard residual income calculations?
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Chapter 13: Short-Run Decision Making: Relevant Costing
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149 Verified Questions
149 Flashcards
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Sample Questions
Q1) The Tucker Company charges cost plus 30%.What is the price of an item with cost equal to $65?
A)$12.50
B)$50.00
C)$60.00
D)$84.50
Q2) In deciding the optimal mix of products that use a constrained resource,it is important to determine the contribution margin per unit of scarce resource.
A)True
B)False
Q3) Refer to the Figure.Assume Victor's Detailing uses target costing to set price on each job.The company requires a 40% profit on each job.What price should Victor's Detailing quote to a new customer?
A)$24
B)$30
C)$54
D)$57
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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153 Flashcards
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Sample Questions
Q1) A disadvantage of the payback period is that it ignores a project's total profitability.
A)True
B)False
Q2) In what way does the payback period provide information to help managers?
A)controls the risks associated with the uncertainty of past cash flows
B)maximizes the impact of an investment on a firm's liquidity problems
C)includes the present value of future cash flows
D)controls the effect of the investment on performance measures
Q3) Kendra Van Cleve has just invested $200,000 in a coffee shop.She expects to receive cash income of $50,000 a year.What is the payback period?
A)2.5 years
B)3 years
C)3.5 years
D)4 years
Q4) The accounting rate of return is used more often than the internal rate of return.
A)True
B)False
Q5) What is a postaudit? What are the advantages and disadvantages of the postaudit?
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