Introduction to Managerial Accounting Pre-Test Questions
Course Introduction
Introduction to Managerial Accounting provides students with the fundamental concepts and techniques used by managers to make informed business decisions. The course covers topics such as cost behavior, budgeting, performance evaluation, and internal reporting. Emphasis is placed on the use of accounting information for planning, controlling, and decision-making in various business settings. Through practical exercises and real-world case studies, students develop the skills needed to analyze financial data, prepare budgets, and recommend strategies to improve organizational efficiency and profitability. This course is essential for those seeking a career in management, accounting, or any role that requires a sound understanding of internal business operations.
Recommended Textbook
Managerial Accounting 3rd Edition by
Karen W. Braun Wendy M Tietz
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15 Chapters
3368 Verified Questions
3368 Flashcards
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Page 2
Chapter 1: Introduction to Managerial Accounting
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187 Flashcards
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Sample Questions
Q1) IFRS stands for
A)Important Foreign Registering Systems.
B)International and Foreign Registering Standards.
C)International and Foreign Reporting Systems.
D)International Financial Reporting Standards.
Answer: D
Q2) Torque Engine Company is considering opening a plant in China. It will cost $3,500,000 to set up the plant and $750,000 to train employees. An additional $100,000 will be spent to build relationships with the local suppliers. The company anticipates gross profit of $4,400,000 from this new plant. Do the benefits outweigh the costs or do the costs outweigh the benefits, and by how much?
A)Costs outweigh benefits by $150,000.
B)Benefits outweigh costs by $150,000.
C)Costs outweigh benefits by $50,000.
D)Benefits outweigh costs by $50,000.
Answer: D
Q3) CPA firms cannot provide consulting services for their current audit clients.
A)True
B)False
Answer: True
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Chapter 2: Building Blocks of Managerial Accounting
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273 Verified Questions
273 Flashcards
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Sample Questions
Q1) For a merchandising company, the costs of shipping inventory to the retail outlet is associated with which element of the value chain?
A)Design
B)Distribution
C)Production and Purchases
D)Customer Service
Answer: B
Q2) Product costs and period costs receive similar treatment when presented in the financial statements.
A)True
B)False Answer: False
Q3) The cost of lighting the factory would be classified as ________ when determining the cost of a manufactured product.
A)an indirect cost
B)a direct cost
C)a period cost
D)none of the above
Answer: A
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Page 4
Chapter 3: Job Costing
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331 Flashcards
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Sample Questions
Q1) When raw materials are transferred out of the storeroom to the factory, their cost is transferred out of raw materials inventory and into work in process inventory.
A)True
B)False
Answer: True
Q2) Which of the following would be an example of a typical manufacturing overhead cost?
A)Direct materials
B)Sales revenue
C)Direct labor
D)Depreciation on factory equipment
Answer: D
Q3) The total cost of a job shown on the job cost record is the sum of the direct labor traced to the job and the manufacturing overhead allocated to the job.
A)True
B)False
Answer: False
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Chapter 4: Activity-Based Costing, Lean Operations, and the Costs of Quality
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Sample Questions
Q1) The cost of evaluating potential raw material suppliers is an example of what type of cost?
A)Prevention cost
B)Internal failure cost
C)External failure cost
D)Appraisal cost
Q2) ABC tends to increase the unit cost of low-volume products and decrease the unit cost of high-volume products.
A)True
B)False
Q3) As a result of cost distortion, some products will be overcosted while other products will be undercosted.
A)True
B)False
Q4) A system in which companies purchase raw materials only when needed is called A)ABC.
B)external failure costs.
C)internal failure costs.
D)JIT production.
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Chapter 5: Process Costing
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254 Flashcards
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Sample Questions
Q1) Perfect Pigments has 3,500 gallons of paint in WIP inventory, with 80% of materials already added. What are equivalent units in ending WIP inventory for materials if the paint is 50% through the process?
A)2,800
B)1,750
C)0
D)1,050
Q2) The number of equivalent units is computed before computing the cost per equivalent unit.
A)True
B)False
Q3) Raw materials purchased were $18,640 and ending inventory of raw materials was $5,200. If raw materials beginning inventory was 30% of materials used in the process, what was the cost of materials used in production?
A)$ 9,408
B)$19,200
C)$34,057
D)$26,629
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Chapter 6: Cost Behavior
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Sample Questions
Q1) Sales revenue less variable expenses equals contribution margin.
A)True
B)False
Q2) When preparing a scatter plot, how should the data be graphed?
A)Volume data on the y-axis
B)Cost data on the x-axis
C)Cost data on the y-axis
D)Volume data on the z-axis
Q3) If the number of units produced equals the number of units sold for a manufacturer, both variable costing and absorption costing income statements will yield the same gross margin.
A)True
B)False
Q4) The Maple Company has total fixed costs of $400,000. It also has $200,000 in total variable costs. These costs exist at a production level of 100,000 units. The fixed cost per unit is
A)$2.00.
B)$6.00.
C)$1.50.
D)$4.00.
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Chapter 7: Cost-Volume-Profit Analysis
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249 Flashcards
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Sample Questions
Q1) To find a firm's operating leverage factor at a given level of sales, you
A)divide the contribution margin by fixed expenses.
B)divide the contribution margin by operating income.
C)divide variable expenses by fixed expenses.
D)divide relatively operating income by contribution margin.
Q2) The Settler's Chuck Wagon sells tickets for dinner and a show for $50 each. The cost of providing dinner is $23 per ticket and the fixed cost of operating the theater is $115,000 per month. The company can accommodate 13,500 patrons each month. What is the contribution margin per patron?
A)$1.85
B)$ 0.54
C)$27.00
D)$23.00
Q3) By multiplying ________ and then subtracting fixed costs, managers can quickly forecast the operating income.
A)projected sales units by the contribution margin ratio
B)projected sales revenue by the contribution margin ratio
C)projected sales revenue by the unit contribution margin
D)projected sales units by the variable cost ratio
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Page 9
Chapter 8: Relevant Costs for Short-Term Decisions
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Sample Questions
Q1) Common fixed costs that are allocated between departments are generally
A)direct fixed costs of the department.
B)relevant to the decision of whether to discontinue the department.
C)irrelevant to the decision of whether to discontinue the department.
D)direct fixed costs of other departments.
Q2) Fixed costs affect product mix considerations.
A)True
B)False
Q3) Qualitative factors play an important part in make or buy decisions.
A)True
B)False
Q4) For some merchandisers, the primary constraint may be cubic feet of display space. A)True
B)False
Q5) Big-box retailers such as Lowe's are considered price-takers because A)their products are not unique.
B)there is less competition in the home improvement retail sector.
C)their products are unique.
D)they emphasize cost-plus pricing.
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Chapter 9: The Master Budget
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Sample Questions
Q1) Which of the following budgets usually shows separate sections for fixed and variable costs?
A)Direct materials and manufacturing overhead budget
B)Manufacturing overhead budget and production budget
C)Production budget and manufacturing overhead budget
D)Operating expense budget and manufacturing overhead budget
Q2) Which of the following is a benefit of budgeting?
A)Focuses management's attention on the future
B)Improved decision-making processes
C)Improved motivation by employees
D)All of the above
Q3) Which of the following is not included in the operating budget?
A)Budgeted income statement
B)Sales budget
C)Inventory budget
D)Budgeted balance sheet
Q4) The budgeted cash collections from credit customers generally only reflect sales made in the current month.
A)True
B)False
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Chapter 10: Performance Evaluation
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207 Flashcards
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Sample Questions
Q1) A product line at PepsiCo (such as the Pepsi Max product line)is most likely treated as a(n)
A)cost center.
B)profit center.
C)investment center.
D)revenue center.
Q2) A graph of a flexible budget formula reflects fixed costs of $45,000 per month and total costs of $100,000 at a volume of 5,000 units. Assuming the relevant range is 1,000 to 20,000 units, the graph would reflect total monthly costs at 15,000 units of what dollar amount?
A)$210,000
B)$100,000
C)$345,000
D)$165,000
Q3) The number of repeat customers would be an example of measuring which perspective?
A)Customer
B)Financial
C)Internal business
D)Learning and growth
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Chapter 11: Standard Costs and Variances
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Sample Questions
Q1) DOT Safety Systems manufactures motorcycle helmets. What is the standard quantity of material used to manufacture each helmet if the material required is 1.2 pounds, and DOT allows for .25 pounds of waste and .35 pounds of rejected material?
A)1.80 pounds
B)1.45 pounds
C)1.55 pounds
D)1.20 pounds
Q2) How is the variable overhead rate variance calculated?
A)The difference between the actual overhead rate and the standard overhead rate multiplied by the actual hours
B)The difference between the actual overhead rate and the standard overhead rate multiplied by the standard hours allowed
C)The difference between the standard hours allowed and the actual hours used multiplied by the standard overhead rate
D)The difference between the standard hours allowed and the actual hours used multiplied by the actual overhead rate
Q3) Identify five benefits of standard costs.
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13
Chapter 12: Capital Investment Decisions and the Time
Value of Money
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Sample Questions
Q1) You have been awarded a scholarship that will pay you $500 per semester at the end of each of the next 8 semesters that you earn a GPA of 3.5 or better. You are a very serious student and you anticipate receiving the scholarship every semester. Using a discount rate of 3% per semester, which of the following is the correct calculation for determining the present value of the scholarship?
A)PV = $500 × 3% × 8
B)PV = $500 × (Annuity PV factor, i = 3%, n = 8)
C)PV = $500 × (Annuity FV factor, i = 6%, n = 4)
D)PV = $1,000 × (PV factor, i = 3%, n = 4)
Q2) One disadvantage of the payback method is that it does not consider the time value of money.
A)True
B)False
Q3) The process of making capital investment decisions is referred to as capital budgeting.
A)True
B)False
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Page 14
Chapter 13: Statement of Cash Flows
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Sample Questions
Q1) Under the direct method of cash flow, which is not included in the cash flow statement?
A)Changes in accounts receivable
B)Changes in accounts payable
C)Changes in inventories
D)Changes in amortization
Q2) On the statement of cash flows, which of the following items would be reported as an operating activity?
A)A purchase of treasury stock
B)A payment of dividends
C)A payment of interest
D)An issuance of stock
Q3) Which of the following items is one of the three sections on the statement of cash flows?
A)Retained earnings
B)Total liabilities
C)Total stockholder's equity
D)Cash from investing activities
Q4) List three ways that owners and investors use the statement of cash flows.
Q5) Identify and describe the three sections of the statement of cash flows.
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Chapter 14: Financial Statement Analysis
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Sample Questions
Q1) The A/R turnover ratio is the ratio of net credit sales to average net accounts receivable.
A)True
B)False
Q2) The times-interest-earned ratio is a measure of ability to cover debt.
A)True
B)False
Q3) A common size statement reports only percentages.
A)True
B)False
Q4) Managers use a variety of financial ratios to evaluate a company's performance.
A)True
B)False
Q5) Which type of analysis would reveal a sales increase of $5000 from Year 1 to Year 2?
A)Horizontal
B)Capital
C)Profitability
D)Vertical
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Chapter 15: Sustainability
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Sample Questions
Q1) Sustainability considers not only the needs of the present generation, but also the needs of future generations.
A)True
B)False
Q2) There are several reasons an organization might pursue sustainable initiatives. At one organization, employees approached management about implementing green practices throughout the business. This situation is an example of which type of reason to implement sustainable initiatives?
A)Cost reduction
B)Regulatory compliance
C)Stakeholder influence
D)Competitive strategy
Q3) ________ may include shareholders, bankers, special interest groups, employees, policy makers, customers, suppliers, or community members.
A)Stakeholders
B)Regulations
C)Constraints
D)None of the above
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