Introduction to Management Accounting Exam Review
Course Introduction
Introduction to Management Accounting provides students with the foundational concepts and practices used by managers to make informed business decisions. The course covers essential topics such as cost classification, allocation, and behavior; budgeting and forecasting; variance analysis; and performance measurement. Emphasis is placed on the use of accounting information for planning, controlling, and evaluating operations within organizations. Students will learn how managerial accounting supports decision-making processes, strategic planning, and overall operational efficiency through practical examples and case studies.
Recommended Textbook
Managerial Accounting The Cornerstone of Business Decision Making 7th Edition by Maryanne M.
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15 Chapters
2443 Verified Questions
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Page 2
Chapter 1: Introduction to Managerial Accounting
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57 Verified Questions
57 Flashcards
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Sample Questions
Q1) A __________________________ has passed a comprehensive examination designed to ensure technical competence and has two years of experience.
Answer: Certified Internal Auditor
CIA
Q2) The managerial accounting system produces information for __________ users.
Answer: internal
Q3) The managerial activity of monitoring a plan's implementation and taking corrective action as needed is referred to as decision making.
A)True
B)False
Answer: False
Q4) Positions that are supportive in nature and have only indirect responsibility for an organization's basic objectives are called ________________________.
Answer: staff positions
Q5) __________________________ organizes costs according to the value chain and collects both financial and nonfinancial information.
Answer: Lean accounting
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Chapter 2: Basic Managerial Accounting Concepts
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216 Flashcards
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Sample Questions
Q1) CPA firm
A)Tangible
B)Intangible
Answer: B
Q2) A professor's salary at a university
A)selling expense
B)administrative expense
C)direct materials
D)direct labor
E)overhead
Answer: D
Q3) What was the cost of goods manufactured for July?
A) $70,500
B) $70,700
C) $76,560
D) $76,650
Answer: C
Q4) Organizations that produce products are called _______________________. Answer: manufacturing organizations
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Chapter 3: Cost Behavior, Cost Forecasting, and Segmented Income Statements
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261 Verified Questions
261 Flashcards
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Sample Questions
Q1) When monthly production volume and sales are the same, ____.
A) absorption income equals variable income
B) absorption income is greater than variable income
C) the cost of goods sold equals miscellaneous expenses
D) the cost of goods sold is greater than miscellaneous expenses
Answer: A
Q2) The relevant range is the range of output within which the assumed cost relationship is valid for the normal operations of the firm.
A)True
B)False
Answer: True
Q3) cost of transporting cars to dealerships
A)variable
B)fixed
Answer: A
Q4) factory insurance
A)variable
B)fixed
Answer: B
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Chapter 4: Job-Order Costing and Normal Cost Overhead Application
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175 Flashcards
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Sample Questions
Q1) Trust Construction builds custom houses for individual buyers.On April 1, it had one job, started with a beginning Work-in-Process of $70,000.During April the job was finished and sold.Direct labor for the job in April was $90,000 and direct materials used were $66,000.Overhead is computed at a rate of 55% of direct labor.There is a markup of 40% on all sales.What was the selling price of the house?
A) $385,700
B) $200,750
C) $98,862
D) $272,600
E) $340,087
Q2) When finished goods are sold, the _____ account is debited.
A) Work in Process
B) Overhead Control
C) Accounts Payable
D) Cost of Goods Sold
E) Sales Revenue
Q3) __________________________ is a costing system that accumulates production costs by process or by department for a given period of time.
Q4) A _______ is one distinct unit or set of units.
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Chapter 5: Activity-Based Costing and Management
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123 Verified Questions
123 Flashcards
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Sample Questions
Q1) When a new product can be designed to use components already being used by other products this is known as ________________.
Q2) Calculate the consumption ratio for setups on the digital cameras.(Note: Round answer to two decimal places.)
A) 0.56
Q3) The value-added standard is the waste-free component of the value-added activity.
A)True
B)False
Q4) Discretionary activities are necessary to comply with legal mandates. A)True B)False
Q5) Activities necessary to remain in business are known as _____________________.
Q6) ___________________ are performed each time a unit is produced.
Page 7
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Chapter 6: Process Costing
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Sample Questions
Q1) Transferred-in costs are a type of raw material cost.
A)True
B)False
Q2) If Forward Co.incurred production costs of $34,980, what was Forward's cost per equivalent unit for the period? (Note: Round your answer to two decimal places.)
A) $2.51
B) $3.00
C) $2.75
D) $3.25
Q3) Under the FIFO production costing method, the two categories of completed units used to compute the total cost of units completed during a period are:
A) beginning work-in-process units and units started.
B) units started and completed and ending work-in-process units.
C) beginning work-in-process units and units started and completed during the current period.
D) other categories.
Q4) The number of physical units is multiplied by the _____________________ to calculate equivalent units.
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8
Chapter 7: Cost-Volume-Profit Analysis
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154 Verified Questions
154 Flashcards
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Sample Questions
Q1) Hill & Scott Company sells a product for $20.Variable costs are $15 per unit, and total fixed costs are $7,000.How many units must be sold by Hill & Scott to earn a profit of $1,000?
A) 1,600 units
B) 1,400 units
C) 1,040 units
D) 62 units
E) 247 units
Q2) The cost-volume profit graph depicts the relationships among cost, volume, and profits, by plotting the total revenue line and the total cost line on the graph.
A)True
B)False
Q3) The break-even point is where total sales revenue equals total cost. A)True
B)False
Q4) Operating leverage is the use of fixed cost to extract higher percentage changes in profits as sales activity changes.
A)True
B)False
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Chapter 8: Tactical Decision-Making and Relevant Costing
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164 Flashcards
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Sample Questions
Q1) Raffles Company routinely bids on construction jobs.Raffles first determines the budgeted product cost of the job and then applies a markup of 50%.If a bid of $15,000 is submitted for a new job, which of the following is true?
A) Budgeted product cost is $15,000.
B) $5,000 is pure profit.
C) All costs pertaining to the job total $15,000.
D) $5,000 includes fixed overhead, selling and administrative expense, and profit.
E) $5,000 includes selling and administrative expense, and profit.
Q2) On a segmented income statement, fixed expenses are broken down into _____________ and ______________.
Q3) Segmented reports are helpful for managers to make _______________ decisions.
Q4) A ____________ is a subunit of a company of sufficient importance to warrant the production of performance reports.
Q5) Flexible resources may have unused capacity.
A)True
B)False
Q6) The profit contribution each segment makes toward covering a company's common fixed costs is called ______________.
Page 10
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Chapter 9: Profit Planning and Flexible Budgets
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Sample Questions
Q1) Bickford Company plans to sell 135,000 units in November and 180,000 units in December.Bickford's policy is that 10% of the following month's sales must be in ending inventory.On November 1, there were 14,000 units in inventory. It takes 30 minutes of direct labor time to make one unit.Direct labor wages average $17 per hour.Variable overhead is applied at the rate of $5 per direct labor hour.Fixed overhead is budgeted at $56,500 per month.What is the direct labor cost budgeted for November?
A) $1,181,500
B) $950,600
C) $707,600
D) $2,152,000
E) $622,800
Q2) What is the budgeted amount of component A to be purchased in May?
A) 41,760
B) 142,800
C) 154,560
D) 164,600
E) 66,600
Q3) A _____________________ compares actual costs with budgeted costs.
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Page 11
Chapter 10: Standard Costing and Variance Analysis
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Sample Questions
Q1) Actual Costs
A)Actual Quantity × Actual Price
B)(Actual Hours × Actual Rate) (Standard Hours × Standard Rate)
C)(Actual Quantity × Actual Price) (Standard Quantity × Standard Price)
D)(Actual Hours Standard Hours) × Standard Rate
E)(Actual Price Standard Price) × Actual Quantity
F)Standard Quantity × Standard Price
G)(Actual Rate Standard Rate) × Actual Hours
H)(Actual Quantity Standard Quantity) × Standard Price
Q2) The sum of the labor rate and labor efficiency variances will always add up to the total labor variance.
A)True
B)False
Q3) Which of the following is not true concerning control limits?
A) Control limits are the top and bottom measures of the allowable range.
B) The upper control limit is the standard plus the allowable deviation.
C) The lower control limit is the standard minus the allowable deviation.
D) In current practice, control limits are set objectively using standard formulas.
E) Variances that fall outside the control limits are investigated.
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Page 12
Chapter 11: Performance Evaluation and Decentralization
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Sample Questions
Q1) JetSky Airways has three divisions, the Western Division, the Eastern Division, and the Northern Division.The manager of the Western Division had wanted to purchase replacement airplanes for the division.However, he decided against it because, although revenues would increase and the new planes would be less expensive to operate, the initial cost of the planes was quite large.The Western Division is most probably accounted for as a(n)
A) cost center.
B) investment center.
C) profit center.
D) revenue center.
E) None of these.
Q2) When a manager is responsible for only costs it is known as a(n) _______________.
Q3) _________________ is found by dividing sales by average operating assets.
Q4) If there is a competitive outside market for the transferred product, then the best transfer price is the _____________.
Q5) A _________________ is the price charged for a component by the selling division to the buying division of the same company.
Q6) _____________ is the ratio of operating income to sales.
Page 13
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Chapter 12: Capital Investment Decisions
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Sample Questions
Q1) The payback period considers the profitability of a project over its entire life span.
A)True
B)False
Q2) Which of the following refers to a series of equal future cash flows?
A) Overhead
B) Future earning
C) Annuity
D) The discount factor
E) Insurance
Q3) Suppose that the actual cost of capital is 10%, but the firm chooses a discount rate of 18%.Managers of that company will be more likely to choose relatively short term investments.
A)True
B)False
Q4) A disadvantage of postaudits is that they are costly.
A)True
B)False
Q5) The two types of capital budgeting projects are ________________ and _______________.
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Issues, Enterprise Risk Management, the Managerial
Accountant in Forensicfraud Accounting
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Sample Questions
Q1) Which of the following is true of a residual risk?
A) A residual risk is a risk that exists absent of any risk management action to reduce or avoid the risk.
B) A residual risk is a risk that can be avoided by enacting some particular procedure to decrease the residual risk to a lower inherent risk level.
C) A residual risk is a risk that remains after any risk management action has been taken.
D) A residual risk is the probability or likelihood of a risk occurring multiplied by the impact should it actually occur.
Q2) Which of the following is true of risk response cost?
A) Risk response cost is not used to estimate the net benefit of each risk response alternative.
B) It is easy to accurately estimate risk response cost.
C) Risk response cost includes only indirect costs.
D) It is the incremental cost incurred by the company to implement the given risk response.
Q3) _________ is measured as the benefit of risk response minus the cost of risk response. Page 15
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Page 16
Chapter 14: Statement of Cash Flows
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Sample Questions
Q1) Investments in stock are reported as an investing activity on the statement of cash flows.
A)True
B)False
Q2) An advantage to using a worksheet to organize the information of preparation of the statement of cash flows is that it uses a spreadsheet format allowing the preparer to use a PC and spreadsheet software.
A)True
B)False
Q3) Cash inflows that enter into the determination of net income are classified as financing activities on a statement of cash flows.
A)True
B)False
Q4) Which of the following activities includes cash flows from acquiring and retiring long-term debt?
A) Selling activities
B) Investing activities
C) Financing activities
D) Manufacturing activities
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Chapter 15: Financial Statement Analysis
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Sample Questions
Q1) A high accounts receivable turnover ratio indicates
A) customers are making payments quickly.
B) a large portion of the company's sales are on credit.
C) many customers are not paying their receivables.
D) the company's sales have increased.
Q2) Which of the following types of analysis is useful in computing the relationships among the components of the financial statements for the same period?
A) Vertical analysis
B) Horizontal analysis
C) Operational analysis
D) Ratio analysis
Q3) The dividend payout ratio is equal to common dividends divided by (Net Income Preferred Dividends).
A)True
B)False
Q4) Terms of sale can produce statistical variations among companies within the same industry.
A)True B)False
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