Introduction to Management Accounting Final Exam Questions
Course Introduction
Introduction to Management Accounting provides students with foundational knowledge and skills in the internal use of accounting information for decision making, planning, and control within organizations. This course explores key topics such as cost behavior, budgeting, performance measurement, variance analysis, and relevant costing.
Students gain practical insight into how managers use accounting data to allocate resources, maximize efficiency, and support strategic objectives. The course blends conceptual understanding with real-world applications, equipping learners with essential tools for effective management and leadership in diverse business environments.
Recommended Textbook
MANAGERIAL ACCOUNTING Version 1.0 by
Kurt Heisinger and Joe Hoyle
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13 Chapters
878 Verified Questions
878 Flashcards
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Page 2
Chapter 1: What Is Managerial Accounting
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Sample Questions
Q1) All of the following are steps outlined by the Institute of Management Accountants (IMA)for resolving ethical conflicts except:
A)consulting an objective advisor such as an attorney.
B)following the policies of the organization for resolving ethical conflicts.
C)presenting the matter to the audit committee,if a satisfactory resolution is not reached by all higher levels of management.
D)bringing the matter to the attention of local news agencies.
E)None of the above.
Answer: D
Q2) Regardless of size,all companies have a chief financial officer (CFO)and a treasurer.
A)True
B)False
Answer: False
Q3) Tax accountant
Answer: E
Q4) Financial accountant
Answer: C
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3
Chapter 2: How Is Job Costing Used to Track Production Costs
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Sample Questions
Q1) All of the following are examples of firms who would use job costing except:
A)An automobile repair business.
B)A custom sailboat builder.
C)An interior designing firm.
D)A sport drink manufacturing company.
E)None of the answer choices is correct.
Answer: D
Q2) The predetermined overhead rate is calculated as the estimated activity in the allocation base divided by the estimated overhead costs.
A)True
B)False
Answer: False
Q3) A movie production company would likely use a job costing system to track revenues and costs.
A)True
B)False
Answer: True
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Page 4
Chapter 3: How Does an Organization Use Activity-Based
Costing to Allocate Overhead Costs
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Sample Questions
Q1) Companies with one product that requires very little variation in production may not benefit from an ABC system as much as companies with multiple products and complex production processes.
A)True
B)False
Answer: True
Q2) Which of the following items is not a batch-level activity?
A)Direct materials used by workers to assemble products.
B)Machines set up to produce groups of products.
C)Purchase requisitions issued for raw materials needed to produce groups of products.
D)Quality inspections of groups of products.
E)None of the answer choices is correct.
Answer: A
Q3) Activity-based costing and activity-based management are two terms used to describe the same concept.
A)True
B)False
Answer: False
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Chapter 4: How Is Process Costing Used to Track
Production Costs
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Sample Questions
Q1) When preparing a production cost report using the weighted average process costing method,"units to be accounted for" include:
A)units in beginning WIP Inventory plus units started during the period.
B)units transferred out plus units in beginning WIP Inventory.
C)units started during the period plus units transferred out.
D)units in beginning WIP Inventory plus units in ending WIP Inventory.
E)None of the answer choices is correct.
Q2) The cost per equivalent unit in the production cost report equals the "costs to be accounted for" divided by the number of:
A)units sold.
B)equivalent units produced.
C)units completed.
D)units started.
E)None of the answer choices is correct.
Q3) Because direct materials,direct labor,and overhead may enter a process at varying stages,equivalent units in Work-in-Process Inventory may be different for each of these components of production.
A)True
B)False
Page 6
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Chapter 5: How Do Organizations Identify Cost Behavior
Patterns
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Sample Questions
Q1) Why do companies use the contribution margin income statement format?
A)To comply with generally accepted accounting principles (GAAP).
B)For external reporting purposes.
C)To present cost of goods sold to external users.
D)To predict how costs will behave with changes in activity.
E)None of the answer choices is correct.
Q2) Examples of variable costs include factory building insurance and wages for hourly workers.
A)True
B)False
Q3) All costs behave in a linear manner.
A)True
B)False
Q4) Variable costs such as direct labor and direct materials typically stay constant on a per unit basis.
A)True
B)False
Q5) Total fixed costs change with changes in volume of activity.
A)True
B)False
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Chapter 6: How Is Cost-Volume-Profit Analysis Used for Decision Making
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Sample Questions
Q1) All of the following are assumptions required to perform break-even and target profit calculations except:
A)Costs can be separated into fixed and variable components.
B)Contribution margin ratio remains constant for each product,segment,or department.
C)Break-even points can only be calculated for single product companies.
D)Sales mix remains constant with changes in sales volume.
E)None of the answer choices is correct.
Q2) Refer to Exhibit 6-7.What is the unit product cost using absorption costing?
A)$4.00
B)$6.07
C)$8.57
D)$9.42
E)None of the answer choices is correct.
Q3) Absorption costing treats all manufacturing costs as period costs.
A)True
B)False
Q4) A change in the sales mix will always decrease the break-even point.
A)True
B)False
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Chapter 7: How Are Relevant Revenues and Costs Used to
Make Decisions
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Sample Questions
Q1) Refer to Exhibit 7-3.What are the total production costs if the hats are outsourced?
A)$130,000
B)$145,000
C)$100,000
D)$60,000
E)None of the answer choices is correct.
Q2) Barkley Company currently makes a product internally,but is considering outsourcing production.Barkley rents a special machine used to make the product,and would no longer need this machine if the part is outsourced.The rent on the machine is what type of cost for this make-or-buy decision?
A)sunk and not differential.
B)avoidable and differential.
C)unavoidable and differential.
D)avoidable and not differential.
E)None of the answer choices is correct.
Q3) Avoidable costs are as also called differential costs.
A)True
B)False
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Chapter 8: How Is Capital Budgeting Used to Make Decisions
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Sample Questions
Q1) When using Excel,all of the following are needed to calculate the internal rate of return except:
A)an estimate of the internal rate of return.
B)the net present value.
C)the annual cash inflows and outflows.
D)the initial cash outflows.
E)None of the answer choices is correct.
Q2) Reinhart Company would like to purchase a new machine for $5,000,000.The machine is expected to have a life of five years,and a salvage value of $1,000,000.Annual maintenance costs will total $300,000.Annual labor and material savings are predicted to be $2,000,000.The company's required rate of return is 26 percent. What is the payback period for this investment (round to the nearest month)?
A)1 year,11 months.
B)1 year,9 months.
C)2 years,9 months.
D)2 years,11 months.
E)None of the answer choices is correct.
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Page 10
Chapter 9: How Are Operating Budgets Created
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Sample Questions
Q1) The amount of cash paid out for overhead each period does not equal the total overhead costs incurred during the period because:
A)overhead expenses rarely require cash payments.
B)overhead expenses only require cash payments for factory rent.
C)overhead expenses only require cash payments for indirect materials.
D)depreciation expense does not require a cash payment.
E)None of the answer choices is correct.
Q2) An operating budget is similar to a capital budget in that both are long-term budgets.
A)True
B)False
Q3) A direct labor budget is regarded as the starting point for the master budget.
A)True B)False
Q4) All of the following appear on the direct materials purchases budget except: A)units to be produced.
B)projected sales in units.
C)quantity of direct materials to be purchased.
D)quantity of desired direct materials ending inventory.
E)None of the answer choices is correct.
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Chapter 10: How Do Managers Evaluate Performance Using Cost Variance Analysis
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Sample Questions
Q1) Refer to Exhibit 10-2.What is the standard cost per unit for variable manufacturing overhead?
A)$16.00
B)$4.80
C)$1.44
D)$10.00
E)None of the answer choices is correct.
Q2) If an analysis shows an unfavorable labor rate variance of $18,000 and a favorable labor efficiency variance of $10,000,the entry to record the cost of direct labor and related variances would include:
A)a debit to Labor Rate Variance for $18,000.
B)a credit to Work in Process inventory for $18,000.
C)a debit to Labor Efficiency Variance for $10,000.
D)a debit to Cost of Goods Sold for $10,000.
E)None of the answer choices is correct.
Q3) Companies using standard costing systems wait for actual product cost data before recording transactions related to production.
A)True
B)False
Page 12
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Chapter 11: How Do Managers Evaluate Performance in
Decentralized Organizations
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Sample Questions
Q1) Which of the following statements is true regarding the use of the operating profit margin as a performance measure?
A)It includes the assets that produced the income.
B)It ignores the assets that produced the income.
C)It is calculated as net income divided by sales.
D)It is calculated as sales divided by operating income.
E)None of the answer choices is correct.
Q2) Operating assets would include office buildings leased to other companies. A)True B)False
Q3) Refer to Exhibit 11-4.What is the ROI for the Chair Division (rounded to the nearest tenth of a percent)?
A)66.7%
B)14.0%
C)33.3%
D)9.3%
E)None of the answer choices is correct.
Q4) Segments of an organization are often referred to as divisions.
A)True B)False
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Chapter 12: How Is the Statement of Cash Flows Prepared and Used
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Sample Questions
Q1) The bottom of the statement of cash flows shows a net increase in cash of $350,000.What is this increase linked to elsewhere in the financial statements?
A)The income statement.
B)The statement of owners' equity.
C)The balance sheet.
D)The income statement,the balance sheet,and the statement of owners' equity.
E)None of the answer choices is correct.
Q2) With respect to the statement of cash flows,activities that affect common stock accounts are referred to as:
A)capital activities.
B)operating activities.
C)investing activities.
D)financing activities.
E)None of the answer choices is correct.
Q3) Free cash flow is computed by subtracting current liabilities from cash provided by operating activities.
A)True
B)False
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Chapter 13: How Do Managers Use Financial and
Nonfinancial Performance Measures
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Sample Questions
Q1) In general,managers prefer expenses as a percent of net sales to increase over time.
A)True
B)False
Q2) Return on assets is a market valuation measure.
A)True
B)False
Q3) Belden Company has a profit margin ratio of 10%.This means that for every dollar of net sales the company makes,it generates ten dollars in net income.
A)True
B)False
Q4) If a company's return on assets is higher than its return on shareholders' equity,then it has positive financial leverage.
A)True
B)False
Q5) The price-earnings ratio measures the premium investors are willing to pay for a company's stock relative to its earnings.
A)True
B)False
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