Introduction to Managerial Accounting Solved Exam Questions
Course Introduction
Introduction to Managerial Accounting provides students with a comprehensive understanding of how accounting information supports managerial decision-making in organizations. The course covers fundamental concepts such as cost behavior, budgeting, performance evaluation, and cost-volume-profit analysis. Through real-world examples and practical exercises, students learn how to interpret financial data, prepare internal reports, and use accounting tools for planning, controlling, and improving business operations. The aim is to equip future managers with the skills necessary to make informed financial decisions and contribute to the strategic goals of their organizations.
Recommended Textbook
Managerial Accounting The Cornerstone of Business Decision Making 7th Edition by Maryanne M.
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Chapter 1: Introduction to Managerial Accounting
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Sample Questions
Q1) Which of the following is true of profit maximization?
A) Profit maximization is achieved by considering the financial measures focused on only efficiency.
B) Profit maximization is an objective of financial accounting but not managerial accounting.
C) Profit maximization should be achieved through legal and ethical means.
D) Profit maximization results in maximum cost to and maximum production by a company.
Answer: C
Q2) Accountants that have a Certificate in Public Accounting (CPA):
A) are the only accountants permitted to serve as external auditors.
B) must pass a national examination and be licensed by the state in which they practice.
C) may be held responsible to provide assurance concerning the reliability of a firm's financial statements.
D) all of these statements are true.
Answer: D
Q3) The ____________________ is responsible for the finance function.
Answer: treasurer
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3
Chapter 2: Basic Managerial Accounting Concepts
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Sample Questions
Q1) A cost that increases in total as output increases
A)period cost
B)direct cost
C)opportunity cost
D)variable cost
E)indirect cost
F)fixed cost
G)product cost
Answer: D
Q2) Video rental
A)Tangible
B)Intangible
Answer: B
Q3) Expired costs are called assets.
A)True
B)False
Answer: False
Q4) Costs that can be easily and accurately traced to a cost object are called
Answer: direct costs
Page 4
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Chapter 3: Cost Behavior, Cost Forecasting, and Segmented Income Statements
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Sample Questions
Q1) is a statistical method
A)high-low method
B)scatter-graph method
C)method of least squares
Answer: C
Q2) __________________ is the general term for describing whether a cost changes when the level of output changes.
Answer: Cost behavior
Q3) The _____ limits the cost relationship to the range of operations that the firm normally expects to occur.
A) alternate range
B) relevant range
C) variant range
D) dependent range
Answer: B
Q4) The slope of a mixed cost line is equal to the fixed element of the cost.
A)True
B)False
Answer: False
Page 5
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Chapter 4: Job-Order Costing and Normal Cost Overhead Application
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Sample Questions
Q1) __________________________ is a costing system that accumulates production costs by process or by department for a given period of time.
Q2) Which of the following are fairly easy to trace to individual jobs?
A) Direct materials and maintenance
B) Direct materials and direct labor
C) Direct labor and overhead
D) Overhead and indirect labor
E) Depreciation on machinery and overhead
Q3) 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
Q4) _________________________ is the amount that appears as an expense on the income statement after the adjustment for the period's overhead variance is recorded.
Q5) When units are sold, their total cost is debited to _______________ and credited to ____________.
Q6) Applied overhead costs are charged to ________________. Page 6
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Page 7
Chapter 5: Activity-Based Costing and Management
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Sample Questions
Q1) Activity drivers can be classified as either ____ or ____.
A) unit-level; nonunit-level
B) exact; inexact
C) inputs; outputs
D) right; wrong
Q2) Calculate the cost of counting.
A) $54,000
B) $56,000
C) $52,000
D) $50,500
Q3) The time required to produce one unit of a product is the
A) efficiency.
B) velocity.
C) speed.
D) cycle time.
Q4) A work distribution matrix is derived from an interview or a written survey.
A)True
B)False
Q5) Activities necessary to remain in business are known as
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Chapter 6: Process Costing
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Sample Questions
Q1) What is the major advantage of the weighted average cost method?
A) simplicity
B) accuracy
C) it is the required method
D) it is the preferred method
Q2) Materials are added at the beginning of the process.Department Z's cost of goods transferred out using the FIFO method would be
A) $40,250.
B) $45,540.
C) $44,500.
D) $45,775.
Q3) Estimating the degree of completion of ending work in process requires:
A) judgement and ethical behavior
B) The degree of completion of beginning work in process
C) adjusting the degree of completion of completed units
D) use of the weighted average method
Q4) Costing system used by a home builder.
A)Process Costing
B)Job Order Costing
Page 9
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Chapter 7: Cost-Volume-Profit Analysis
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Sample Questions
Q1) Rocha & Noel Company makes and sells dolls.The price is $15 and the variable expense per unit is $10.What is the contribution margin ratio? (Note: Round answer to two decimal places.)
A) 62.55%
B) 37.45%
C) 55.67%
D) 33.33%
E) 60.27%
Q2) The linear equation for total cost is (Unit variable cost × Units) + Fixed cost.
A)True
B)False
Q3) In a multi-product firm, if the sales mix changes, the break-even points for each product will not change.
A)True
B)False
Q4) Variable expense per unit consists only of direct materials, direct labor, and variable overhead.
A)True
B)False
Q5) __________ is the relative combination of products being sold by a firm.
Page 10
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Chapter 8: Tactical Decision-Making and Relevant Costing
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Sample Questions
Q1) What is the contribution margin per unit of scarce resource (machine time) for Model P-4?
A) $6
B) $12
C) $24
D) $14
E) $28
Q2) A situation in which management tells divisions that they must reduce costs by 10% is called target costing.
A)True
B)False
Q3) Qualitative factors that should be considered when evaluating a make-or-buy decision are
A) the quality of the outside supplier's product.
B) whether the outside supplier can provide the needed quantities.
C) whether the outside supplier can provide the product when it is needed.
D) All of these.
Q4) Segmented reports are helpful for managers to make _______________ decisions.
Q5) ______________ is the point at which products become distinguishable after passing through a common process.
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Chapter 9: Profit Planning and Flexible Budgets
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Sample Questions
Q1) A company has provided a sales budget for the next four months.It bases its production budget on the sales budget, and has a policy that each month's ending inventory of finished product must be equal to 25% of the following month's sales needs.The direct materials purchases budget is based on the production budget.The company's policy for each month's ending inventory of raw materials is that they must be equal to 10% of the following month's production needs for raw materials.Given this information, the company can prepare direct materials purchases budgets for how many months?
A) One
B) Two
C) Three
D) Four
E) Five
Q2) Ideally, managers are held accountable for controllable costs.
A)True
B)False
Q3) When top management assumes total control of the budgeting process and only seeks superficial participation from lower-level managers this is known as
Q4) A _____________________ compares actual costs with budgeted costs.
Page 12
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Chapter 10: Standard Costing and Variance Analysis
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Sample Questions
Q1) The amount that should be paid for the quantity of the input to be used is known as the ______________.
Q2) During September, 40,000 units were produced.The standard quantity of material allowed per unit was 5 pounds at a standard cost of $2.50 per pound.If there was a favorable usage variance of $25,000 for September, the actual quantity of materials used must have been
A) 210,000 pounds.
B) 190,000 pounds.
C) 105,000 pounds.
D) 95,000 pounds.
Q3) Price changes of variable overhead items are easily controlled by production supervisors.
A)True
B)False
Q4) Calculate the variable overhead efficiency variance.
A) $36,850 U
B) $80,000 U
C) $36,850 F
D) $4,000 U
E) None of these.
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Chapter 11: Performance Evaluation and Decentralization
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Sample Questions
Q1) A ____________________ is a segment of the business whose manager is accountable for specific sets of activities.
Q2) The process value chain consists of
A) value, operations, and objectives.
B) innovation, satisfaction, and value.
C) innovation, operations, and post-sales service.
D) design, production, and selling.
E) design, satisfaction, and post-sales service.
Q3) What is the turnover for Division C?
A) 3.28
B) 0.20
C) 6.670
D) 1.500
Q4) A _________________ is the price charged for a component by the selling division to the buying division of the same company.
Q5) A(n) ________________ is when a manager is responsible only for sales.
Q6) Decreasing inventories leads to a reduction in return on investment (ROI).
A)True
B)False
Page 14
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Chapter 12: Capital Investment Decisions
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Sample Questions
Q1) When choosing among competing projects, the ___________________ model correctly identifies the best investment alternative.
Q2) Projects that if accepted preclude the acceptance of all other competing projects are called mutually exclusive projects.
A)True
B)False
Q3) The internal rate of return is the least widely used of the capital investment techniques.
A)True
B)False
Q4) Which of the following methods assumes that each cash inflow is reinvested at the rate at which the present value of a project's cash inflows equal the present value of its cash outflows?
A) The net present value
B) The average rate of return
C) The ratio analysis
D) The internal rate of return
E) None of these
Q5) The major disadvantage of a postaudit is that it is ____________.
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Chapter 13: Emerging Topics in Managerial Accounting:
Sustainability, Quality Cost, Lean Accounting, International
Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting
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Sample Questions
Q1) Which of the following is true of an interim quality cost report?
A) At the end of a period, an interim quality cost report compares the actual quality costs for the period with the budgeted costs.
B) It provides a chart or graph that tracks the change in quality from the beginning of the program to the present.
C) An interim quality cost report highlights the progress trend since the inception of the quality improvement program.
D) An interim quality cost report does not consider prevention costs.
Q2) In most countries and business environments, sustainability reporting must adhere to generally accepted accounting principles.
A)True
B)False
Q3) Lean manufacturing reduces wait and move times dramatically and allows the production of small batches of differing products.
A)True
B)False
Q4) The _________ is a model that explains the factors causing someone to commit fraud. Page 16
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Page 17
Chapter 14: Statement of Cash Flows
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Sample Questions
Q1) Under the indirect method, the net cash flow from operating activities is computed by adjusting net income to remove the effect of all deferrals of past operating cash receipts and payments, and all accruals of future operating cash receipts or payments.
A)True
B)False
Q2) Land is exchanged for common stock
A)Operating Activity, Source of Cash
B)Operating Activity, Use of Cash
C)Investing Activity, Source of Cash
D)Investing Activity, Use of Cash
E)Financing Activity, Source of Cash
F)Financing Activity, Use of Cash
G)Non-cash Investing & Financing Activity
Q3) The indirect method of reporting the cash flows from operating activities on the statement of cash flows is the method most widely used in practice.
A)True
B)False
Q4) Income statements are prepared on a (n) ______________.
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18
Chapter 15: Financial Statement Analysis
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Sample Questions
Q1) Which of the following is also referred to as horizontal analysis?
A) Progressive analysis
B) Variance analysis
C) Trend analysis
D) Budget analysis
Q2) A primary purpose of vertical analysis is to observe trends over a three-year period.
A)True
B)False
Q3) Which of the following characteristics of a company's financial position is analyzed by accounts receivable turnover and inventory turnover ratios?
A) The marketability
B) The profitability
C) The growth prospects
D) The liquidity
Q4) A ratio analysis of financial statements indicates:
A) the investment opportunities available to an organization.
B) the ability of an organization to meet short-term obligations.
C) the competitiveness of an organization.
D) the marketability of the finished product of an organization.
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