Management Accounting
Mock Exam
Course Introduction
Management Accounting explores the processes, techniques, and tools used by organizations to generate, analyze, and apply financial and non-financial information for internal decision-making. The course covers budgeting, cost analysis, performance evaluation, and strategic planning, emphasizing how managers use accounting data to guide operations, control resources, and achieve business objectives. Students will learn to interpret management accounting reports, assess cost behaviors, and implement systems that enhance organizational efficiency and competitiveness in dynamic business environments.
Recommended Textbook
Horngrens Cost Accounting A Managerial Emphasis 3rd Australian Edition by Charles Horngren
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21 Chapters
3782 Verified Questions
3782 Flashcards
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Page 2
Chapter 1: Management Accounting in Context
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200 Verified Questions
200 Flashcards
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Sample Questions
Q1) The first step in the five-step decision-making process is 'gather relevant information'.
A)True
B)False
Answer: False
Q2) In forming strategy,senior management must first thoroughly understand the organisation and its environment.
A)True
B)False
Answer: True
Q3) What doe control include?
A)Implementing planning decisions
B)Providing feedback to help with future decision making
C)Evaluating performance
D)All of these answers are correct.
Answer: D
Q4) Cost management is narrowly focused on a continuous reduction of costs.
A)True
B)False
Answer: False
Page 3
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Chapter 2: Different Costs for Different Purposes
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324 Verified Questions
324 Flashcards
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Sample Questions
Q1) Which of the following formulae determine cost of goods sold in a manufacturing sector company?
A)Cost of goods manufactured - Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold
B)Beginning work-in-process inventory + Cost of goods manufactured - Ending work-in-process inventory = Cost of goods sold
C)Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory = Cost of goods sold
D)Beginning work-in-process inventory + Cost of goods manufactured + Ending work-in-process inventory = Cost of goods sold
Answer: C
Q2) Inventory of a manufacturing firm includes goods partially worked on but not yet fully completed.
A)True
B)False
Answer: True
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4
Chapter 3: Determining How Costs Behave
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182 Verified Questions
182 Flashcards
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Sample Questions
Q1) What is the cost function?
A)y = $4875 + $5.25X
B)y = $43 191 + $0.19X
C)y = $41 900 + $0.23X
D)y = $2430 + $4.28X
Answer: D
Q2) Gathering cost information through observations and interviews from departments within an organisation is known as the:
A)account analysis method.
B)conference method.
C)industrial engineering method.
D)quantitative analysis method.
Answer: B
Q3) The 'high-low method' is more accurate than the 'regression method' of estimating a cost function.
A)True
B)False
Answer: False
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5
Chapter 4: Costvolumeprofit Analysis
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211 Verified Questions
211 Flashcards
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Sample Questions
Q1) Which option provides the least amount of risk?
A)Option one
B)Option two
C)Both options provide the same amount of risk.
D)Neither option has risks.
Q2) How many dresses must the Bridal Shoppe sell to yield after-tax net profit of $18 000,assuming the tax rate is 40%?
A)200 dresses
B)170 dresses
C)150 dresses
D)145 dresses
Q3) If sales increase by $40 000,operating profit will increase by:
A)$10 000.
B)$20 000.
C)$30 000.
D)None of these answers are correct.
Q4) Many companies find even the simplest CVP analysis helps with strategic and long-range planning.
A)True
B)False
Page 6
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Chapter 5: Estimating the Cost of Producing Services
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Over-costed outputs lead to overpricing,causing these outputs to lose market share to competitors producing similar outputs.
A)True
B)False
Q2) By using a matrix initially to match a service category with a type of costing system,managers and management accountants are able to refine the design of the system to suit the requirements of their organisation.
A)True
B)False
Q3) A cost _______ causes a change in the cost of an activity and has an effect on costs.
A)driver
B)pool
C)allocation
D)tracer
Q4) Managers use a job-costing system when the output comprises many homogenous (identical or almost identical)units.
A)True
B)False
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Chapter 6: Estimating the Costs of Products and Inventory
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356 Verified Questions
356 Flashcards
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Sample Questions
Q1) How many of the units that were started during February were completed during February?
A)75 000
B)80 000
C)85 000
D)65 000
Q2) What source document is used to keep track of direct labour for a job?
Q3) What is cost of goods sold per unit when using absorption costing?
A)$19
B)$20
C)$29
D)$32
Q4) Variable costing includes all variable costs-both manufacturing and nonmanufacturing-in inventory.
A)True
B)False
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Chapter 7: Target Costing, Managing Activities and Managing Capacity
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154 Verified Questions
154 Flashcards
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Sample Questions
Q1) What is the target operating profit?
A)$240 000
B)$180 000
C)$300 000
D)$192 000
Q2) If the capacity level chosen to calculate the budgeted fixed production overhead cost rate is more than the actual production,an unfavourable production-volume variance will result.
A)True
B)False
Q3) Many companies use life-cycle budgeting to determine target prices.
A)True
B)False
Q4) Budgeted fixed manufacturing costs of a product using practical capacity:
A)should be used to evaluate a marketing manager's performance in the current year.
B)can result in setting selling prices that are not competitive.
C)includes the cost of unused capacity.
D)represents the cost per unit of supplying capacity.
Page 9
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Chapter 8: Activity-Based Management and Activity-Based Costing
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230 Verified Questions
230 Flashcards
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Sample Questions
Q1) Information derived from an ABC analysis might be used to eliminate non-value-added activities.
A)True
B)False
Q2) If total payroll processing costs of $96 000 are allocated on the basis of number of employees,the amount allocated to the Sails Department would be:
A)$67 200
B)$28 000
C)$16 000
D)$24 000
Q3) Once an ABC system has been set up,these calculations are routine and the management accountant,as a member of the management team,can computerise them with relatively little effort.
A)True
B)False
Q4) Direct costs plus indirect costs equal total costs.
A)True
B)False
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Chapter 9: Pricing and Customer Profitability
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171 Verified Questions
171 Flashcards
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Sample Questions
Q1) 'Reverse engineering' involves disassembling and analysing competitors' products to determine product designs and materials and to become acquainted with the technologies that competitors use.
A)True
B)False
Q2) For Geelong Generators,what is the minimum acceptable price of this one-time-only special order?
A)$1075
B)$1000
C)$1290
D)$900
Q3) What factors may influence the level of mark-ups?
Q4) Businesses have complete freedom to set prices.
A)True
B)False
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Chapter 10: Decision Making and Relevant Information
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211 Verified Questions
211 Flashcards
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Sample Questions
Q1) When replacing an old machine with a new machine,the purchase price of the old machine is a relevant cost.
A)True
B)False
Q2) Favata Corporation manufactures two products,AA and CC.The following information was available:
\[\begin{array} { l c r }
& \text { AA } & \text { CC } \\
\text { Selling price per unit } & \$ 37 & \$ 26 \\
\text { Variable cost per unit } & 34 & 21 \\
& & \\
\text { Total fixed costs } & \$ 18000
\end{array}\]
If Favata Corporation could produce and sell either 10 000 units of AA or 5000 units of CC at full capacity,it should produce and sell:
A)10 000 units of AA and none of CC
B)5000 units of CC and none of AA
C)3000 units of CC and 6000 units of AA
D)4000 units of AA and 5000 units of CC
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Page 12
Chapter 11: Budgeting, Management Control and Responsibility Accounting
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215 Verified Questions
215 Flashcards
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Sample Questions
Q1) What is the amount budgeted for cost of goods sold in 2018?
A)$1 156 000
B)$2 400 000
C)$1 190 000
D)$986 000
Q2) Purchases budgeted for January total:
A)$72 000.
B)$74 160.
C)$100 320.
D)$130 800.
Q3) With a long enough time-span,________________ costs will come under somebody's control.
A)few
B)all
C)employee
D)selling
Q4) A revenues budget is the usual last step in preparing the operating budget.
A)True
B)False
Q5) Describe the benefits to an organisation of preparing an operating budget.
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Chapter 12: Flexible Budgets, Direct Cost Variances and Management Control
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246 Verified Questions
246 Flashcards
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Sample Questions
Q1) For ____________ items,a favourable variance occurs when actual revenues exceed budgeted revenues.
A)cost
B)estimated
C)budgeted
D)revenue
Q2) A favourable price variance for direct materials indicates that:
A)more material was used during production than planned for actual output.
B)a higher price than planned was paid for materials.
C)less material was used during production than planned for actual output.
D)a lower price than planned was paid for materials.
Q3) What is the budgeted contribution margin per composite unit for the budgeted mix?
A)$8.60
B)$9.00
C)$8.00
D)$9.60
Q4) A favourable market-size variance results with a decrease in market size.
A)True
B)False
14
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Chapter 13: Flexible Budgets, Overhead Cost Variances and Management Control
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170 Flashcards
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Sample Questions
Q1) Fixed overhead has no efficiency variance.
A)True
B)False
Q2) What is the variable overhead spending variance?
A)$420 unfavourable
B)$600 unfavourable
C)$600 favourable
D)$780 favourable
Q3) The budget period for fixed overhead costs is typically ____ months to help smooth out seasonal effects.
A)6
B)3
C)24
D)12
Q4) Calculate the spending variance for variable set-up overhead costs.
A)$264 favourable
B)$150 favourable
C)$264 unfavourable
D)$150 unfavourable
Q5) Explain why sales-volume variance could be helpful to managers.
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Chapter 14: Allocation of Support-Department Costs,
Common Costs and Revenues
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137 Verified Questions
137 Flashcards
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Sample Questions
Q1) When may the revenue allocation be weighted using physical units?
A)Selling prices are unstable and unit costs are difficult to calculate.
B)The individual products within the bundle have approximately the same value.
C)Other methods cannot be used for various reasons.
D)All of these answers are correct.
Q2) The direct allocation method highlights recognition of services rendered by support departments to other support departments.
A)True
B)False
Q3) Which of the following is NOT one of the three methods of allocating support department costs to operating departments?
A)Direct method
B)Incremental method
C)Reciprocal method
D)Step-down method
Q4) When the dual-rate method is used,cost-allocation bases must be chosen for both the variable-cost and fixed-cost pools
A)True
B)False
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Chapter 15: Strategy Formation, Strategic Control and the Balanced Scorecard
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157 Verified Questions
157 Flashcards
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Sample Questions
Q1) Engineered costs:
A)include R&D and human resource costs.
B)arise from periodic (usually annual)decisions.
C)include a high level of certainty.
D)often incur a delay between when the resource is acquired and when it is used.
Q2) The partial productivity of overhead resources can be measured by considering the cost driver as:
A)the denominator.
B)budgeted input.
C)the fixed input.
D)the numerator.
Q3) Orphan status represents an opportunity to evaluate the contribution that the strategic objective brings to the overall strategy.
A)True
B)False
Q4) Downsizing discretionary costs is easier than downsizing engineered costs.
A)True
B)False
Page 17
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Chapter 16: Quality, Time and the Balanced Scorecard
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120 Verified Questions
120 Flashcards
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Sample Questions
Q1) The largest COQ items are frequently those related to external failure,which comprises mainly the opportunity costs of the contribution margin and profit forgone from lost sales,lost production and lower prices resulting from poor quality.
A)True
B)False
Q2) What are costs incurred to find a nonconforming product before it is shipped to customers known as?
Variant question
A)Prevention costs
B)Appraisal costs
C)Internal failure costs
D)External failure costs
Q3) What is the net effect on appraisal costs for 2018,assuming the new receiving method is implemented and that 800 000 material units are received?
A)$20 000 increase
B)$240 000 increase
C)$220 000 decrease
D)$20 000 decrease
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18
Chapter 17: Inventory Management, Just-In-Time
and
Simplified Costing Methods
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126 Verified Questions
126 Flashcards
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Sample Questions
Q1) An assumption of the economic-order-quantity (EOQ)decision model is that: Variant question
A)no stockouts occur.
B)the quantity ordered can vary at each reorder point.
C)demand ordering costs and carrying costs fluctuate.
D)there will be timely labour costs.
Q2) An inventory item of Nullabor Manufacturing has an average daily demand of 20 units with a maximum daily demand of 24 units.The economic order quantity (EOQ)is 200 units.Without safety stocks,the reorder point is 50 units.Safety stocks are set at 94 units.
Required:
a.Determine the reorder point with safety stocks.
b.Determine the maximum inventory level.
c.Determine the average lead time.
d.Determine the maximum lead time.
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Chapter 18: Capital Budgeting and Cost Analysis
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140 Verified Questions
140 Flashcards
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Sample Questions
Q1) What is the net present value of the investment,assuming the required rate of return is 14%? Would the hospital want to purchase the new machine?
A)$25 715;no
B)$(62 235);no
C)$42 910;yes
D)$83 415;yes
Q2) What conflicts can arise between using discounted cash flow methods for capital budgeting decisions and accrual accounting for performance evaluation? How can these conflicts be reduced?
Q3) Explain capital budgeting and briefly discuss each of the five stages of a capital budgeting project.
Q4) The common discounted cash flow methods are net present value,internal rate of return,and payback.
A)True
B)False
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Chapter 19: Management Control Systems, Transfer Pricing and
Multinational Considerations
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140 Verified Questions
140 Flashcards
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Sample Questions
Q1) A company has a plant in a high tax jurisdiction that produces products for a facility in a low tax jurisdiction.Suggest a strategy,including transfer prices,which will result in the lowest tax for the overall corporation.
Q2) What is the term used to describe the situation when a manager's decision,which benefits one subunit,is more than offset by the costs to the organisation as a whole?
A)Suboptimal decision making
B)Dysfunctional decision making
C)Congruent decision making
D)Both A and B are correct.
Q3) If the product sold between divisions has no intermediate market,the opportunity cost of supplying the product internally is the variable cost of the product.
A)True
B)False
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Page 21
Chapter
20: Performance
Measurement, Compensation and Multinational Considerations
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140 Verified Questions
140 Flashcards
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Sample Questions
Q1) What is the EVA for Broome?
A)$1 530 000
B)$450 000
C)$414 360
D)$1 115 640
Q2) What is the Coaxial Cables Division's return on investment?
A)0.2
B)0.4
C)0.5
D)0.8
Q3) Return on investment can be increased by:
A)decreasing operating assets.
B)increasing operating assets.
C)decreasing revenues.
D)Both B and C are correct.
Q4) A major weakness of comparing two companies using only operating profits as the basis of comparison is that this method ignores differences in the size of the investment required to earn the operating profit.
A)True
B)False
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Chapter 21: Measuring and Reporting Sustainability
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50 Verified Questions
50 Flashcards
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Sample Questions
Q1) 'Learning for sustainability' is the term used to describe the ongoing learning that must go on within an organisation to achieve sustainability.
A)True
B)False
Q2) Environmental management accounting provides only non-financial measures of environmental-related performance.
A)True
B)False
Q3) How does Professor Dexter Dunphy's research describe businesses that want to create a sustainable world by changing the very way they operate?
A)Compliance Reactive Minimalists
B)Bunker Wombats
C)Proactive Strategists
D)Transforming Futurists
Q4) The objectives for sustainability are unlikely to be completely met within an organisation.
A)True
B)False
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Page 23