Management Accounting
Mock Exam
Course Introduction
Management Accounting is a course that explores the methods and techniques used by organizations to collect, analyze, and present financial information for internal decision-making purposes. Students will learn about cost behavior, budgeting, standard costing, variance analysis, performance measurement, and the use of accounting information to support strategic planning and control. The course emphasizes the role of accounting information in managerial decision-making, efficient resource allocation, and performance evaluation to help achieve organizational objectives.
Recommended Textbook
MANAGERIAL ACCOUNTING Version 1.0 by Kurt Heisinger and Joe Hoyle
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13 Chapters
878 Verified Questions
878 Flashcards
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Page 2
Chapter 1: What Is Managerial Accounting
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83 Verified Questions
83 Flashcards
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Sample Questions
Q1) Which of the following is typically performed by a financial accountant?
A)Preparing an income statement for one segment of a company.
B)Preparing a balance sheet for the annual report in accordance with U.S.GAAP.
C)Preparing the budgeted income statement for the upcoming quarter.
D)Preparing a report on the percentage of defective product returned by customers.
E)None of the above.
Answer: B
Q2) All of the following are examples of managerial accounting information except:
A)budget versus actual reports.
B)monthly income statement for each store.
C)monthly analysis of product profitability.
D)annual balance sheet prepared in accordance with U.S.GAAP.
E)None of the above.
Answer: D
Q3) Nonmanufacturing costs include direct labor and indirect labor.
A)True
B)False
Answer: False
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3
Chapter 2: How Is Job Costing Used to Track Production Costs
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44 Verified Questions
44 Flashcards
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Sample Questions
Q1) Process costing is best described by which statement?
A)Only direct materials and manufacturing overhead are assigned to products under process costing.
B)Units produced in a process costing system are unique and are produced individually.
C)Product costs are tracked by department and assigned to products passing through each department.
D)There cannot be any beginning or ending Work in Process Inventory with process costing.
E)None of the answer choices is correct.
Answer: C
Q2) Assume Clayton Company has an immaterial credit balance in the Manufacturing Overhead account.The entry to close the Manufacturing Overhead account should include a:
A)credit to Finished Goods Inventory.
B)credit to Work in Process Inventory.
C)credit to Cost of Goods Sold.
D)debit to Cost of Goods Sold.
E)None of the answer choices is correct.
Answer: C
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Chapter 3: How Does an Organization Use Activity-Based
Costing to Allocate Overhead Costs
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Sample Questions
Q1) All of the following can be performed using ABC and ABM except:
A)assessing profitability of products.
B)providing product cost information.
C)analyzing production processes.
D)evaluating employee and division performance.
E)All of the choices are correct.
Answer: E
Q2) Flannery Inc.produces identical tables in large batches.Which of the following would most likely be a product-level cost for Flannery?
A)Quality control costs.
B)Salaries for purchasing and receiving personnel.
C)Research and development for a new line of tables.
D)Electricity costs for plant machinery.
E)None of the answer choices is correct.
Answer: C
Q3) Prevention costs are costs for activities that prevent product defects.
A)True
B)False
Answer: True
5
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Chapter 4: How Is Process Costing Used to Track
Production Costs
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58 Verified Questions
58 Flashcards
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Sample Questions
Q1) The journal entry to record the transfer of units from one processing department to another processing department includes:
A)a debit to WIP Inventory.
B)a debit to Finished Goods Inventory.
C)a credit to WIP Inventory.
D)Both a and c are correct.
E)None of the answer choices is correct.
Q2) Refer to Exhibit 4-2.What is the cost per gallon for the packaging process?
A)$1.66
B)$1.78
C)$1.70
D)$1.56
E)None of the answer choices is correct.
Q3) In a process costing system,partially completed units in Work-in-Process Inventory are typically converted to equivalent completed units.
A)True
B)False
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Page 6
Chapter 5: How Do Organizations Identify Cost Behavior
Patterns
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69 Verified Questions
69 Flashcards
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Sample Questions
Q1) When 85,000 units are produced,the fixed cost is $10 per unit.Assuming our company is within the relevant range and we produce 120,000 units,our fixed costs will not remain at $10 per unit.
A)True
B)False
Q2) Which of the following approaches for estimating fixed and variable costs using historical information fits a straight line to a set of data points?
A)Scattergraph method and regression analysis
B)Scattergraph method and account analysis
C)High-low method and account analysis
D)Scattergraph method and high-low method
E)None of the answer choices is correct.
Q3) Refer to Exhibit 5-1.How would the cost function be stated using the high-low method?
A)Y = $3,700 + $1.00X
B)Y = $9,500 + $1.00X
C)Y = $1,000 + $1.00X
D)Y = $3,700 + $1.10X
E)None of the answer choices is correct.
Page 7
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Chapter 6: How Is Cost-Volume-Profit Analysis Used for Decision Making
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Sample Questions
Q1) Refer to Exhibit 6-8.Calculate Perry's operating profit assuming the company uses variable costing.
A)$271,000
B)$286,000
C)$396,000
D)$370,000
E)None of the answer choices is correct.
Q2) The contribution margin per unit is the amount each unit sold contributes to covering fixed costs and increasing profit.
A)True
B)False
Q3) Paco's Bikes sells 120 bicycles each month for $400 per unit.Variable cost per unit is $160 and fixed costs total $4,800 per month.What is the contribution margin per unit?
A)$160
B)$280
C)$200
D)$240
E)None of the answer choices is correct.
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Chapter 7: How Are Relevant Revenues and Costs Used to
Make Decisions
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Sample Questions
Q1) All of the following are qualitative factors that a company should consider in a make-or-buy decision except:
A)Will the supplier consistently make a quality product?
B)Will the supplier have enough capacity if demand increases?
C)Will profit increase by outsourcing the product?
D)Will the morale of current employees be affected by outsourcing?
E)None of the answer choices is correct.
Q2) Refer to Exhibit 7-2.What are the differential revenues associated with the special order?
A)$75,000
B)$120,000
C)$420,000
D)$300,000
E)None of the answer choices is correct.
Q3) Differential revenues and costs are also called incremental revenues and costs.
A)True
B)False
Q4) What are some of the qualitative factors management might consider if they are trying to decide whether to outsource production rather than keep the production within their company?
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Chapter 8: How Is Capital Budgeting Used to Make Decisions
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Sample Questions
Q1) Post-audits offer an incentive for managers to provide accurate estimates for capital budgeting decisions.
A)True
B)False
Q2) Under the net present value (NPV)method,cash flows are assumed to be reinvested at:
A)the company's discount rate.
B)the internal rate of return.
C)an average of the discount rate and the internal rate of return.
D)the prime lending rate.
E)None of the answer choices is correct.
Q3) Incentive systems that pay managers for short-term results may keep them from accepting long-term proposals with a positive net present value.
A)True
B)False
Q4) Both the net present value method and the payback method consider the time value of money.
A)True
B)False
10
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Chapter 9: How Are Operating Budgets Created
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Sample Questions
Q1) Establishing a sales budget that underestimates likely sales will have no effect on materials and labor in a production process.
A)True
B)False
Q2) Companies generally obtain sales forecasts from many different sources.
A)True
B)False
Q3) Which of the following best describes an operating budget?
A)An estimate of cash expenditures for long-term assets.
B)A short-term budget that focuses on the daily operations of the organization.
C)A series of budget schedules outlining the organization's plans for the next three years.
D)An estimate of all operating costs other than production.
E)None of the answer choices is correct.
Q4) All of the following appear on the direct labor budget except:
A)units to be produced.
B)labor rate per hour.
C)direct labor hours per unit.
D)indirect labor hours per unit.
E)None of the answer choices is correct.
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Chapter 10: How Do Managers Evaluate Performance Using Cost Variance Analysis
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Sample Questions
Q1) Jake's Cheese Company produces gourmet cheese for resale at local grocery stores.The master budget indicates that the company expects to use 3.0 pounds of direct materials for each unit produced at a cost of $8.00 per pound (one unit = one batch of cheese).Each unit produced will require 0.50 direct labor hours at a cost of $10.00 per hour.Variable manufacturing overhead is applied based on direct labor hours at a rate of $5.00 per hour.Last year's sales were expected to total 50,000 units.Jake just received last year's actual results showing sales of 45,000 units.
(1)Calculate the standard cost per unit for direct materials,direct labor,and variable manufacturing overhead.
(2)Prepare a flexible budget based on actual sales for direct materials,direct labor,and variable manufacturing overhead.
Q2) Refer to Exhibit 10-5.What is the variable overhead spending variance for the product testing activity?
A)$8,000 unfavorable
B)$8,000 favorable
C)$3,800 favorable
D)$3,800 unfavorable
E)None of the answer choices is correct.
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Chapter 11: How Do Managers Evaluate Performance in
Decentralized Organizations
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Sample Questions
Q1) Pete's Paint Company produces paint and has two divisions: Consumer and Commercial.Each division manager is evaluated based on profit produced by each division.The Commercial division sells paint to the Consumer division for $12 per gallon to cover variable costs.The Commercial division also sells to outside customers for $15 per gallon.
a.Using the general economic transfer pricing rule,calculate the optimal transfer price assuming the Commercial division is below capacity.
b.Using the general economic transfer pricing rule,calculate the optimal transfer price assuming the Commercial division is at capacity.
Q2) Although economic value added (EVA)is similar to residual income,adjustments are made to the financial information to better reflect the economic results of the division. A)True B)False
Q3) Asset turnover is calculated as sales divided by average operating assets. A)True B)False
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13
Chapter 12: How Is the Statement of Cash Flows Prepared and Used
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Sample Questions
Q1) Using the indirect method for preparing the statement of cash flows,which of the following would not be included as an adjustment to net income?
A)A decrease in Prepaid Insurance.
B)An increase in Accounts Payable.
C)An increase in Equipment.
D)An increase in Accounts Receivable.
E)None of the answer choices is correct.
Q2) Refer to Exhibit 12-2.Which of these items would appear in the financing activities
A)1 & 6
B)2 & 3
C)1 & 5
D)4 & 6
E)None of the answer choices is correct.
Q3) When preparing the operating activities
A)True
B)False
Q4) When preparing the operating activities
A)True
B)False
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Chapter 13: How Do Managers Use Financial and
Nonfinancial Performance Measures
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Sample Questions
Q1) On a common-size income statement,net income should be stated as a percentage of:
A)gross margin.
B)total assets.
C)net sales.
D)current assets.
E)None of the answer choices is correct.
Q2) A relatively high price-earnings ratio indicates investors expect favorable future earnings.
A)True
B)False
Q3) The current ratio is the same as the quick ratio.
A)True
B)False
Q4) On a common-size balance sheet,equipment should be stated as a percentage of:
A)net sales.
B)total assets.
C)total liabilities.
D)total long-term assets.
E)None of the answer choices is correct.
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