Introduction to Managerial Accounting Practice Questions
Course Introduction
Introduction to Managerial Accounting provides students with the foundational concepts and techniques used by managers to make informed business decisions. The course focuses on the identification, measurement, analysis, and interpretation of accounting information for internal use within organizations. Topics include cost behavior, budgeting, performance evaluation, variance analysis, and decision-making processes. Students will learn how to prepare and utilize managerial reports, evaluate operational efficiency, and apply accounting data to strategic planning. By the end of the course, students will be equipped with the skills necessary to support effective management and organizational success.
Recommended Textbook
Managerial Accounting 3rd Canadian Edition by Karen
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12 Chapters
3096 Verified Questions
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W. Braun
Page 2
Chapter 1: Introduction to Managerial Accounting
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Sample Questions
Q1) Match the following:
A) Controlling
B) Directing
C) Decision making
D) Planning
1) Setting goals and objectives.
2) The process in which management engages while it plans directs and controls operations.
3) Evaluating results of business operations.
4) Determining how to achieve company goals.
5) Overseeing the company's day to day operations.
Answer: Answers: 1) D 2) C 3) A 4) D 5) B
Q2) Evaluating the results of business operations against a plan and then making adjustments to that plan is called budgeting.
A)True
B)False
Answer: False
Q3) Discuss at least four differences between financial accounting and managerial accounting.
Answer: 11ea895a_9460_6ae2_861b_d9f5afb1f84f_TB1238_00
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Chapter 2: Building Blocks of Managerial Accounting
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Sample Questions
Q1) Which of the following, in addition to cost of goods manufactured, is needed to compute the cost of goods sold for a manufacturer?
A) Beginning work in process inventory less ending work in process inventory
B) Ending work in process inventory less beginning work in process inventory
C) Beginning finished goods less ending finished goods
D) Ending finished goods less beginning finished goods
Answer: C
Q2) What is Montreal's cost of goods sold during the year?
A) $260,000
B) $232,000
C) $200,000
D) $240,000
Answer: A
Q3) What is the cost of goods available for sale at the Olde Tyme Beverage Company?
A) $128,000
B) $132,000
C) $63,000
D) $144,000
Answer: D
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Chapter 3: Cost Behaviour
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Sample Questions
Q1) If $10,000 of the total costs are fixed, what is the variable cost of producing each birdhouse?
A) $25.00
B) $17.50
C) $35.00
D) $40.00
Answer: C
Q2) Using the high-low method, what is the monthly fixed manufacturing cost at Snow Enterprises?
A) $800
B) $11,000
C) $3,915
D) $1,985
Answer: C
Q3) After performing account analysis, a mixed cost account can be separated into its fixed and variable amounts.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Cost-Volume-Profit Analysis
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Sample Questions
Q1) If a unit sells for $11.40 and has a variable cost of $3.80, its contribution margin per unit is $7.60.
A)True
B)False
Q2) What is the monthly margin of safety as a percentage of target sales in dollars at Southwest Electric Co-op?
A) 175.00%
B) 25.00%
C) 33.33%
D) 80.00%
Q3) Happy Feet hiking socks have variable cost of $6 per pair which are then sold for $10 per pair. Monthly fixed costs are $18,000; current sales are 12,000 pairs per month. Required:
1. Compute the break-even sales in units.
2. Compute ABC's margin of safety in units and sales dollars.
3. Compute ABC's margin of safety as a percentage.
4. Compute ABC's operating leverage factor.
5. Compute ABC's % of operating income decline if sales fall by 20%.
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Chapter 5: Job Costing
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Sample Questions
Q1) The cost of direct labour used in production is recorded as a A) credit to Manufacturing Overhead.
B) credit to Work in Process Inventory.
C) credit to Wages Payable.
D) credit to Wages Expense.
Q2) The journal entry to issue $500 of direct materials and $30 of indirect materials involves a debit to
A) Manufacturing Overhead for $530.
B) Work in Process Inventory for $530.
C) Work in Process Inventory for $500 and a credit to Manufacturing Overhead for $30.
D) Work in Process Inventory for $500 and a debit to Manufacturing Overhead for $30.
Q3) At a service company, the indirect costs of serving the client consists of operating expenses.
A)True
B)False
Q4) A receiving report is used to order needed materials from suppliers.
A)True
B)False
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Chapter 6: Process Costing
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Sample Questions
Q1) What is the cost per equivalent unit for conversion costs at OxyCorp?
A) $2.42
B) $2.33
C) $2.61
D) $2.60
Q2) The cost assigned to ending work in process at Hannish Orchards would be closest to
A) $2,336.
B) $4,616.
C) $1,900.
D) $2,991.
Q3) Which of the following is an error when accounting for transferred-in costs?
A) Including transferred-in costs from previous departments
B) Costing units at average costs
C) Converting units to a common measurement when transferred in
D) Consider costs assigned at the beginning of the period when calculating costs to be transferred on a weighted average basis
Q4) In a job cost system, all costs flow to a particular job.
A)True
B)False
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Chapter 7: Activity Based Costing
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Sample Questions
Q1) Non-value-added activities are activities that neither enhance the customer's image of the product or service nor provide a competitive advantage.
A)True
B)False
Q2) The overhead cost per unit of Pops would be closest to
A) $10.59.
B) $9.54.
C) $3.53.
D) $26.80.
Q3) The benefits of using the ABC costing system are higher if the company
A) has high indirect costs.
B) produces many different products that use differing amounts of resources.
C) produces only one product.
D) has high indirect costs and produces many different products that use differing amounts of resources.
Q4) PD Company has re-engineered its production process and should now review and potentially revise its activity-based costing system.
A)True
B)False
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Chapter 8: Short-Term Business Decisions
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Sample Questions
Q1) If $25,000 of fixed costs will be eliminated by discontinuing the Fashion line, how will operating income be affected?
A) Increase $5,000
B) Decrease $45,000
C) Increase $54,000
D) Increase $103,000
Q2) Companies with production constraints and irrelevant fixed costs will be most profitable when they maximize production of the product with the highest A) sales price.
B) demand for the product.
C) contribution margin per unit.
D) contribution margin per unit of the constraint.
Q3) Using a cost-plus approach, what price should Philadelphia Swim Club charge for a membership?
A) $41.00
B) $37.50
C) $29.00
D) $ 0.17
Q4) What the reasons a firm would adopt target costing?
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Chapter 9: The Master Budget and Responsibility Accounting
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Sample Questions
Q1) What are Blaney Lumber's budgeted cash payments in June for inventory purchases?
A) $495,000
B) $315,750
C) $168,150
D) $164,850
Q2) Which of the following budgets is not applicable to a merchandising company?
A) Sales
B) Operating expense
C) Cost of goods sold, inventory and purchases
D) Direct materials
Q3) On the direct materials budget, the total quantity of direct materials needed is computed as
A) units to be produced + desired end inventory of DM - beginning inventory of DM.
B) quantity needed for production + desired end inventory of DM - beginning inventory of DM.
C) units to be produced - desired end inventory of DM +beginning inventory of DM.
D) quantity needed for production - desired end inventory of DM + beginning inventory DM.
Page 11
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Chapter 10: Flexible Budgets and Standard Costs
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Sample Questions
Q1) A.C. Catering reported actual operating income for the current year of $40,000. The flexible budget's operating income for actual volume achieved is $38,000, while the static budget's operating income is $35,000. What is the flexible budget variance for operating income?
A) $2,000 favourable
B) $5,000 favourable
C) $5,000 unfavourable
D) $2,000 unfavourable
Q2) What is the Kid Adventures Company's flexible budget variance for variable expenses?
A) $32,400 favourable
B) $29,700 unfavourable
C) $32,400 unfavourable
D) $29,700 favourable
Q3) A company's flexible budget for 80,000 units of production showed sales of $240,000; variable costs of $120,000; and fixed costs of $80,000. What net operating income would you expect the company to earn if it produces and sells 83,000 units? (Assume 83,000 units is in the relevant range.)
Q4) Identify five benefits of standard costs.
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Chapter 11: Performance Evaluation and the Balanced Scorecard
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Sample Questions
Q1) Return on Investment (ROI) is defined as operating income divided by total assets.
A)True
B)False
Q2) The manager of a local Walmart would be in charge of a(n)
A) cost centre.
B) investment centre.
C) profit centre.
D) revenue centre.
Q3) The central reservation office at American Airlines is most likely treated as a(n) A) cost centre.
B) investment centre.
C) profit centre.
D) revenue centre.
Q4) What is the First Electronics Corporation cell phone division's profit margin?
A) 200.00%
B) 15.00%
C) 25.00%
D) 30.00%
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Chapter 12: Capital Investment Decisions and the Time
Value of Money
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Sample Questions
Q1) The Internal Rate of Return and the Accounting Rate of Return are the only recognized capital budgeting methods.
A)True
B)False
Q2) What is the payback period for Project 2?
A) 4.00 years
B) 5.56 years
C) 10.00 years
D) 16.00 years
Q3) The payback period for the Kentucky proposal is closest to
A) 4.5 years.
B) 4.8 years.
C) 6.0 years.
D) 7.0 years.
Q4) How long is the payback period for Investment B at Boyle Company?
A) 2.40 years
B) 3.38 years
C) 3.75 years
D) 10.00 years
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