Management Accounting
Exam Materials
Course Introduction
Management Accounting explores the process of preparing, analyzing, and interpreting financial information to support organizational decision-making, planning, and control. The course focuses on various cost concepts, budgeting methods, performance evaluation tools, and management control systems. Students will learn how to use accounting information to manage resources efficiently, set attainable objectives, monitor progress, and make strategic decisions that align with organizational goals. Emphasis is placed on real-world applications through case studies and problem-solving exercises relevant to manufacturing, service, and non-profit organizations.
Recommended Textbook
Horngren's Accounting The Managerial Chapters 10th Edition by Tracie L. Miller Nobles
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9 Chapters
1348 Verified Questions
1348 Flashcards
Source URL: https://quizplus.com/study-set/3558 Page 2
Chapter 1: Introduction to Managerial Accounting
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179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/70629
Sample Questions
Q1) What is the amount of direct labor incurred by Jasper in March?
A) $29,600
B) $39,870
C) $126,970
D) $23,030
Answer: D
Q2) You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company's bonds. Which of the IMA standards appears to have been violated here?
A) Integrity
B) Confidentiality
C) Competence
D) Objectivity
Answer: C
Q3) Management accounting information of a company is primarily used by:
A) its customers to understand the pricing of the product.
B) its creditors to understand the credibility of the business.
C) its employees to plan and control operations.
D) its investors to make their investment decisions.
Answer: C
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Chapter 2: Job Order Costing
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152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/70630
Sample Questions
Q1) Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has 4 public relations specialists, plus an office staff. At the beginning of 2014, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,200, and a total of 7,200 billable hours for the year. The office and administrative costs were estimated at $676,800. The allocation base for office and administrative costs is billable hours. A new client is contracting with Fogelin to promote a ballet tour in the U.S. Fogelin estimates that the job will require 40 billable hours of specialist time. If Fogelin wishes to make a 25% gross profit on the job, what price should Fogelin quote to the client?
A) $2,800
B) $6,000
C) $7,500
D) $4,700
Answer: C
Q2) Accounting firms, building contractors, and healthcare providers use process costing.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Process Costing
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144 Verified Questions
144 Flashcards
Source URL: https://quizplus.com/quiz/70631
Sample Questions
Q1) A production cost report can help managers in identifying the most profitable products.
A)True
B)False
Answer: True
Q2) Under process costing, the costs incurred by each department are recorded in a separate production cost report for each department.
A)True
B)False
Answer: True
Q3) Which of the following businesses is most likely to use a process costing system?
A) an accounting firm
B) a law firm
C) a soda manufacturer
D) a construction company
Answer: C
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Page 5
Chapter 4: Cost-Volume-Profit Analysis
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172 Verified Questions
172 Flashcards
Source URL: https://quizplus.com/quiz/70632
Sample Questions
Q1) If the variable cost per unit decreases, the total number of units required to breakeven will increase.
A)True
B)False
Q2) Nancy was reviewing the water bill for her dog day care and spa and determined that her highest bill, $3,800, occurred in May when she washed 400 dogs and her lowest bill, $2,400, occurred in November when she washed 200 dogs. What was the fixed cost associated with Nancy's water bill?
A) $2,400
B) $3,800
C) $1,000
D) $1,400
Q3) A company that sells multiple products will always set selling prices such that all products have the same contribution margin.
A)True
B)False
Q4) Higher fixed costs increase the total number of units required to break even.
A)True
B)False
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Chapter 5: Master Budgets
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114 Verified Questions
114 Flashcards
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Sample Questions
Q1) A company with different segments using different software configurations can easily combine budget data of different segments to create the master budget.
A)True
B)False
Q2) A manufacturer has provided the following details for goods purchased on account in different months.
\(\begin{array}{|l|r|}
\hline\text { jan } & \$ 35,000 \\
\hline \text { Feb } & 28,000 \\
\hline \text { March } & 34,000 \\
\hline \text { April } & 39,000 \\
\hline \text { May } & 32,000 \\
\hline \text { june } & 29,000\\\hline
\end{array}\) The terms of payment offered by the suppliers are to pay 70% in the month of purchase and 30% in the following month. Calculate the payments on account made during the first six months.
Q3) The cash budget is the prerequisite for the master budget.
A)True
B)False
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Page 7
Chapter 6: Flexible Budgets and Standard Cost Systems
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174 Verified Questions
174 Flashcards
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Sample Questions
Q1) Atlace Manufacturers uses standard costing system. Standards for manufacturing overhead are as follows:
Variable overhead: $30 per direct labor hour
Fixed overhead: $10 per direct labor hour
Actual overhead incurred (variable and fixed): $45,600
Standards for direct labor are as follows:
Hours per unit 0.5, Direct labor cost per hour $18.00
Actual direct labor for the month: 1,200 hours for a total cost of $24,000
Actual and planned production for the month: 3,000 units
The journal entry to allocate overhead cost (both variable and fixed) to production would be:
Q2) The static budget is used to compute flexible budget variance or price and efficiency variances.
A)True
B)False
Q3) An unfavorable flexible budget variance in variable expenses suggests a(n):
A) increase in price.
B) decrease in volume.
C) increase in variable expenses per unit.
D) decrease in fixed costs.
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Chapter 7: Cost Allocation and Responsibility Accounting
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130 Verified Questions
130 Flashcards
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Sample Questions
Q1) The responsibility report of Keith Paul, a manager of one of the divisions of a manufacturing company, includes profits as well as return on investment and residual income. Keith is most likely to the manager of a(n):
A) investment center.
B) profit center.
C) cost center.
D) revenue center.
Q2) Traditional costing systems employ multiple allocation rates, but an activity-based costing system uses only one rate for allocating manufacturing overhead.
A)True
B)False
Q3) Which of the following internal business perspective key performance indicators (KPIs) is commonly used to assess the innovation process?
A) number of new products developed
B) number of warranty claims
C) employee turnover rate
D) rate of on-time deliveries
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Chapter 8: Short-Term Business Decisions
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161 Verified Questions
161 Flashcards
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Sample Questions
Q1) What product and how many units should the company produce in a month to maximize profits?
A) 7,200 bread machines
B) 5,400 toaster ovens and 3,600 bread machines
C) 7,200 toaster ovens and 2,400 bread machines
D) 10,800 toaster ovens
Q2) Nordic Avionics makes aircraft instrumentation. Their basic navigation radio requires $80 in variable costs and requires $2,000 per month in fixed costs. Nordic sells 30 radios per month. If they process the radio further to enhance its functionality, it will require an additional $25 per unit of variable costs, plus an increase in fixed costs of $800 per month. The current price of the radio is $260. The marketing manager is sure that they can charge a higher price for the improved version. At what price level would the new, improved radio begin to improve operational earnings? Round to nearest whole dollar.
A) at a price of higher than $312
B) at a price of $309 or higher
C) at a price of lower than $420
D) at a price of $295 or higher
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Chapter 9: Capital Investment Decisions
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122 Verified Questions
122 Flashcards
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Sample Questions
Q1) A major criticism of the payback method is that it focuses only on time to recover the investment, and ignores profitability.
A)True
B)False
Q2) Calculate the payback period for Investment B.
A) 3 years
B) 2 years
C) 4 years
D) 5 years
Q3) Out of all methods of evaluating capital investments, the discounted cash flow methods are superior because they consider both the time value of money and the profitability of the investment.
A)True
B)False
Q4) When the internal rate of return is the same as the required rate of return, the net present value of an investment will be positive.
A)True
B)False
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