Management Accounting
Exam Materials
Course Introduction
Management Accounting focuses on the process of identifying, measuring, analyzing, interpreting, and communicating financial information to managers for the pursuit of an organizations goals. This course introduces students to key concepts such as cost behavior, budgeting, performance measurement, and decision-making techniques that support internal planning and control. Through real-world examples and practical exercises, students learn how to use accounting information to assess business performance, allocate resources efficiently, and make strategic business decisions.
Recommended Textbook
Managerial accounting 10th Canadian Edition by Ray Garrison
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14 Chapters
2164 Verified Questions
2164 Flashcards
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Chapter 1: Managerial Accounting and the Business Environment
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Sample Questions
Q1) Persons occupying staff positions provide support and assistance to other parts of the organization.
A)True
B)False
Answer: True
Q2) Which of the following would be an example of a performance report?
A) An income statement reporting actual results for the past month.
B) An income statement showing the amounts budgeted for the past month.
C) A balance sheet showing the actual financial position at the end of the past month.
D) A production report showing budgeted and actual production for the past month.
Answer: D
Q3) Managerial accounting is NOT governed by generally accepted accounting principles (GAAP).
A)True
B)False
Answer: True
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Page 3
Chapter 2: Cost Terms, Concepts, and Classifications
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Sample Questions
Q1) Haack Inc.is a merchandising company.Last month,the company's cost of goods sold was $84,000.The company's beginning merchandise inventory was $20,000,and its ending merchandise inventory was $18,000.What was the total amount of the company's merchandise purchases for the month?
A) $86,000.
B) $82,000.
C) $84,000.
D) $122,000.
Answer: B
Q2) If raw materials costing $35,000 were purchased during January,what were the total manufacturing costs for the month?
A) $145,000.
B) $144,000.
C) $151,000.
D) $146,000.= (32,000 + 35,000 - 31,000)+ 40,000 + 70,000 = $146,000
Answer: D
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4
Chapter 3: Cost Behaviour: Analysis and Use
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Sample Questions
Q1) Which of the following best describes the contribution approach to the income statement?
A) It organizes costs on a functional basis.
B) It shows data based on the cost behavior aspect of fixed and variable.
C) It shows a contribution margin rather than an operating income figure at the bottom of the statement.
D) It can be used only by manufacturing companies.
Answer: B
Q2) At an activity level of 6,000 units,the cost for maintenance is $7,200;at 10,000 units,the cost for maintenance is $11,600.Using the high-low method,what is the cost formula for maintenance?
A) $1.16 per unit.
B) $1.20 per unit.
C) $600 plus $1.10 per unit.
D) $1,200 plus $1.10 per unit.FC = 11,600 - 10,000 * .75 = $600
Answer: C
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Page 5
Chapter 4: Cost-Volume-Profit Relationships
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Sample Questions
Q1) A product sells for $20 per unit and has a contribution margin ratio of 40%.Fixed expenses total $240,000 annually.How many units of the product must be sold to yield an operating income of $60,000?
A) 37,500 units.
B) 40,000 units.
C) 65,000 units.
D) 30,000 units.
Q2) In the current year,the company sold 43,000 units.Due to competition,management will be forced to lower the selling price by 10% next year.How many units must be sold next year to earn the same operating income as was earned in the current year?
A) 50,000 units.
B) 53,200 units.
C) 58,800 units.
D) 60,200 units.New CM = 40 * (1 - .10)- 20 - 6 = $10.Units required = (532,000 + 70,000)/10 = 60,200 units.
Q3) At the break-even point: Sales - Variable expenses = Fixed expenses.
A)True
B)False
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Chapter 5: Systems Design: Job-Order Costing
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Sample Questions
Q1) Job-order costing is used in manufacturing companies and process costing is used in service firms.
A)True
B)False
Q2) (Appendix 5A)Basing predetermined overhead rate on capacity will almost certainly result in overapplied overhead.
A)True
B)False
Q3) The Work in Process inventory account of a manufacturing company shows a balance of $2,400 at the end of an accounting period.The job cost sheets of two uncompleted jobs show charges of $400 and $200 for direct materials and charges of $300 and $500 for direct labour.From this information,what predetermined overhead rate,as a percentage of direct labour costs,does the company appear to be using?
A) 80%.
B) 125%.
C) 240%.
D) 300%.
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Chapter 6: Systems Design: Process Costing
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Sample Questions
Q1) Using the weighted-average method,the cost per equivalent unit of materials for May is closest to which of the following?
A) $4.12.
B) $4.50.
C) $4.60.
D) $5.03.
Q2) Trapp Company uses the weighted-average method in its process costing system.The beginning work-in-process inventory in its Painting Department consisted of 3,000 units that were 70% complete with respect to materials and 60% complete with respect to conversion costs.The cost of the beginning work-in-process inventory in the department was recorded as $10,000.During the period,9,000 units were completed and transferred on to the next department.The costs per equivalent unit for the period were $2.00 for material and $3.00 for conversion costs.What was the cost of units transferred out during the month?
A) $39,600.
B) $45,000.
C) $45,400.
D) $35,400.
Q3) $112,000 ÷ 28,000 EUs = $4 per EU
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Page 8
Chapter 7: Activity-Based Costing: a Tool to Aid Decision Making
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Sample Questions
Q1) Which of the following would be classified as a product-level activity?
A) Machine setup for a batch of a standard product.
B) Cafeteria facilities available to and used by all employees.
C) Human resource management.
D) Advertising a product.
Q2) Unit-level production activities are performed each time a unit is made.
A)True
B)False
Q3) Which of the following is a distinctive feature of an ABC system in comparison to a departmental overhead application system?
A) It is a two-stage allocation system.
B) It uses transactional drivers.
C) It must include at least one non unit-level driver.
D) It uses duration drivers.
Q4) According to the activity-based costing system,what is the total profit margin for this function?
A) ($70).
B) ($20).
C) $80.
D) $230.
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Chapter 8: Variable Costing: a Tool for Management
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Sample Questions
Q1) What is the total period cost for the month under the absorption costing approach?
A) $24,000.
B) $60,000.
C) $170,100.
D) $230,100.
Q2) Operating income reported under absorption costing will generally exceed operating income reported under variable costing for a given period in which of the following cases?
A) If production equals sales for that period.
B) If production exceeds sales for that period.
C) If sales exceed production for that period.
D) If the variable manufacturing overhead exceeds the fixed manufacturing overheaD.
Q3) What is the total period cost for the month under the variable costing approach?
A) $60,000.
B) $170,000.
C) $194,100.
D) $230,100.
Q4) The following information pertains to Malcolm Corporation for a period:
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Chapter 9: Budgeting
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Sample Questions
Q1) If 500,000 finished units were to be manufactured during July,what would be the units of raw material needed to be purchased?
A) 900,000 units.
B) 1,000,000 units.
C) 1,010,000 units.
D) 1,020,000 units.
Q2) What would be the expected cash balance on April 30?
A) $19,700.
B) $28,700.
C) $54,700.
D) $62,700.
Q3) What is the budget or schedule that provides necessary input data for the direct labour budget?
A) Raw materials purchases budget.
B) Production budget.
C) Schedule of cash collections.
D) Cash budget.
Q4) A static budget is geared toward a single level of activity.
A)True
B)False
Page 11
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Chapter 10: Standard Costs and Overhead Analysis
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Sample Questions
Q1) What was the materials quantity variance for January?
A) $300 favourable.
B) $300 unfavourable.
C) $750 favourable.
D) $800 unfavourable.
Q2) What was the materials price variance for the month?
A) $3,640 favourable.
B) $3,640 unfavourable.
C) $4,060 favourable.
D) $4,060 unfavourable.
Q3) What was the materials quantity variance for the month?
A) $5,814 unfavourable.
B) $5,916 unfavourable.
C) $8,550 unfavourable.
D) $8,700 unfavourable.
Q4) For March,what was the variable overhead spending variance?
A) $6,000 favourable.
B) $10,000 unfavourable.
C) $12,000 unfavourable.
D) $22,000 favourable.
Page 12
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Chapter 11: Reporting for Control
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Sample Questions
Q1) Which of the following is a correct definition of operating income?
A) Sales minus variable expenses.
B) Sales minus variable expenses and traceable fixed expenses.
C) Contribution margin minus traceable and common fixed expenses.
D) Income before interest and taxes (EBIT).
Q2) Residual income is the operating income that an investment centre earns above the minimum required return on the investment in operating assets.
A)True
B)False
Q3) The Northern Division of the Smith Company had average total operating assets of $150,000 last year.Its minimum required rate of return was 12%.The division reported operating income of $20,000.What was the residual income for the Northern Division last year?
A) $2,000.
B) $5,000.
C) $18,000.
D) $20,000.
Q4) Describe the balanced scorecard concept and explain the reasoning behind it.
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Chapter 12: Relevant Costs for Decision Making
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Sample Questions
Q1) (Appendix 12A)In target costing,the anticipated competitive market price of a product determines its maximum allowable product cost.
A)True
B)False
Q2) Suppose the company is already operating at capacity when the special order is received from the overseas customer.What would be the opportunity cost of each unit delivered to the overseas customer?
A) $7.20.
B) $8.40.
C) $9.70.
D) $32.50.
Q3) Variable costs are always relevant costs.
A)True
B)False
Q4) (Appendix 12A)The time and material approach pricing will result in attaining the company's desired profit only if forecasted billable activity is realized,holding all other things constant.
A)True B)False
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Chapter 13: Capital Budgeting Decisions
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Sample Questions
Q1) The payback period would be closest to which of the following?
A) 2.90 years.
B) 3.00 years.
C) 3.33 years.
D) 8.00 years.
Q2) (Appendix 13B)Last year,the sales at Seidelman Company were $700,000 and were all cash sales.The company's tax-deductible expenses were $450,000 and were all cash expenses.The tax rate was 35%.What was the after-tax net cash inflow at Seidelman last year?
A) $87,500.
B) $162,500.
C) $250,000.
D) $700,000.
Q3) (Appendix 13A)The present value of a given sum to be received in five years will be exactly twice as great as the present value of an equal sum to be received in ten years.
A)True B)False
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Chapter 14: Financial Statement Analysis Online
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Sample Questions
Q1) Last year,Dunn Company purchased $1,920,000 of inventory.The cost of good sold was $1,800,000,and the ending inventory was $360,000.What was the inventory turnover?
A) 5.0 times.
B) 5.3 times.
C) 6.0 times.
D) 6.4 times.Turnover = 1,800,000/[(240,000 + 360,000)/2] = 6.0 times.
Q2) Larosa Company's price-earnings ratio on December 31,Year 2 was closest to which of the following?
A) 4.97.
B) 7.10.
C) 7.44.
D) 22.66.
Q3) What is the company's acid-test (quick)ratio?
A) 0.68.
B) 1.68.
C) 2.14.
D) 2.31.
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Page 16