Management Accounting Practice Questions
Course Introduction
Management Accounting provides students with an in-depth understanding of how accounting information is used by managers to plan, control, and make decisions within an organization. The course explores key concepts such as cost behavior, budgeting, variance analysis, performance measurement, and the use of accounting data for strategic planning. Emphasis is placed on practical application, ethical considerations, and the role of management accounting in supporting operational and financial efficiency. Students will learn to interpret and analyze relevant accounting information, preparing them for effective decision-making and resource management in a variety of business environments.
Recommended Textbook
Cornerstones of Managerial Accounting 3rd Edition by
Maryanne M. Mowen
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14 Chapters
2120 Verified Questions
2120 Flashcards
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Chapter 1: Introduction to Managerial Accounting
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64 Verified Questions
64 Flashcards
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Sample Questions
Q1) What is a primary objective of managerial accounting?
A) to provide the Canada Revenue Agency with information about taxable income
B) to provide management with information useful for planning and control of operations
C) to provide banks and other creditors with information useful in making credit decisions
D) to provide existing shareholders and potential investors with useful information for decision making
Answer: B
Q2) Activity-based costing is a detailed approach to determining the cost of goods and services.
A)True
B)False
Answer: True
Q3) In Canada, new accounting students currently have a choice of pursuing their choice any of the following professional accounting designations: CMA, CGA, CA, or CPA. A)True
B)False
Answer: False
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Page 3
Chapter 2: Basic Managerial Accounting Concepts
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217 Verified Questions
217 Flashcards
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Sample Questions
Q1) Refer to Becker Corporation . What are the prime costs?
A) $564,000
B) $650,000
C) $805,000
D) $969,000
Answer: B
Q2) HaulAll Inc. had a per-unit conversion cost of $4.00 during May and incurred a direct materials cost of $100,000, direct labour costs of $110,000, and manufacturing overhead costs of $50,000. How many units did HaulAll manufacture during May?
A) 18,000
B) 30,000
C) 40,000
D) 70,000
Answer: C
Q3) Cost of goods sold is the total product cost of the units manufactured during a period.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Cost Behaviour
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211 Verified Questions
211 Flashcards
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Sample Questions
Q1) What is characteristic of discretionary fixed costs?
A) They cannot be easily changed.
B) They increase as output increases.
C) They often involve a long-term contract.
D) They can be easily changed by management.
Answer: D
Q2) Remains constant on a per-unit basis within the relevant range
A)Variable cost
B)Fixed cost
C)Mixed cost
D)Step cost
Answer: A
Q3) Has an increased fixed component at specified intervals
A)Variable cost
B)Fixed cost
C)Mixed cost
D)Step cost
Answer: D
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5
Chapter 4: Cost-Volume-Profit Analysis: a Managerial Planning Tool
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154 Verified Questions
154 Flashcards
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Sample Questions
Q1) Measured in dollars
A)horizontal-axis of cost-volume-profit graph
B)vertical-axis of cost-volume-profit graph
C)slope of revenue line
D)slope of cost line
E)point where the total revenue line and the total cost line intersect
Q2) Which formula calculates operating income?
A) (sales price × units sold) - (unit variable cost × units sold) - fixed cost
B) (sales price × units sold) + (unit variable cost × units sold) + fixed cost
C) (sales price + units sold) - (unit variable cost + units sold) - fixed cost
D) (sales price - units sold) + (unit variable cost - units sold) + fixed cost
Q3) The linear equation for revenue is sales price multiplied by fixed cost.
A)True
B)False
Q4) Refer to Desjardin Tools. What is the break-even point in sales dollars?
A) $392,241
B) $420,000
C) $761,905
D) $948,275
Q5) How can a multi-product firm determine its break-even point?
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Chapter 5: Job-Order Costing
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195 Verified Questions
195 Flashcards
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Sample Questions
Q1) Costs of a job are transferred from Work-in-Process Inventory to Finished Goods Inventory
A)Completion of job
B)End of each accounting period
C)Materials are removed from storage into production
D)Product is sold
E)End of year
Q2) Refer to Quillen Company. Allocating S1 costs first, how much of the support department costs will be allocated from Department S2 to the Cutting Department?
A) $0
B) $34,500
C) $138,000
D) $172,500
Q3) In a process costing environment, equivalent unit costs are computed by dividing the process costs for the given period by the output of the period.
A)True
B)False
Q4) What are the three steps of overhead application?
Q5) Discuss overapplied and underapplied overhead.
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Chapter 6: Process Costing
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156 Verified Questions
156 Flashcards
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Sample Questions
Q1) The Glove Company uses the weighted average costing method. The beginning Work-in-Process Inventory consists of 25,000 units (100% completed as to materials and 50% complete as to conversion costs). The number of units completed was 100,000. The ending Work-in-Process Inventory consists of 15,000 units (100% complete as to materials and 25% complete as to conversion costs). What would be the equivalent units of production for conversion costs?
A) 40,000
B) 103,750
C) 112,500
D) 116,250
Q2) If changes occur in the purchase price of the manufacturing inputs from one period to the next, then the FIFO costing method produces a more accurate unit cost than does the weighted average costing method.
A)True
B)False
Q3) Vitamin manufacturer
A)Process costing
B)Job-order costing
Q4) List the five steps in preparing a production report.
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Chapter 7: Activity-Based Costing and Management
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159 Verified Questions
159 Flashcards
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Sample Questions
Q1) Financial and nonfinancial information items that describe individual activities
A)Activity drivers
B)Activity-based costing system
C)Consumption ratio
D)Unit-level activities
E)Activity attributes
F)Resource drivers
Q2) The current manual process takes 36 minutes of direct labour time and 12 kg of material to make a product. Automating the process would require 24 minutes of machine time and 10 kg of material. The cost per labour hour is $18, the cost per machine hour is $14, and the cost per kilogram of materials is $22. What is currently the non-value-added cost per unit?
A) $5.60 per unit
B) $10.80 per unit
C) $44.00 per unit
D) $49.20 per unit
Q3) A work distribution matrix is derived from an interview or a written survey.
A)True
B)False
Q4) What is the activity based costing hierarchy? Give an example for each.
Page 9
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Chapter 8: Absorption and Variable Costing, and Inventory Management
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Refer to Ella Company. What is the operating income for using the absorption costing method?
A) $11,300
B) $11,800
C) $12,520
D) $36,000
Q2) Assuming more items are sold during a period than are produced in that same period, which of the following will result?
A) Net income using the absorption costing method will be equal to net income using the variable costing method.
B) Net income using the absorption costing method will be less than net income using the variable costing method.
C) Net income using the absorption costing method will be greater than net income using the variable costing method.
D) Net income using the absorption costing method will be randomly different from net income using the variable costing method.
Q3) List three problems that inventory is meant to solve. How does the JIT producer handle these problems?
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Chapter 9: Budgeting, Production, Cash, and Master Budget
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165 Verified Questions
165 Flashcards
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Sample Questions
Q1) Describe some problems with participative budgeting.
Q2) There are as many direct materials purchases budgets as there are products.
A)True
B)False
Q3) Refer to Miso Compayny. What dollar value of June credit sales is expected to be collected in July?
A) $30,000
B) $36,000
C) $60,000
D) $72,000
Q4) Sales budget
A)Operating budget
B)Financial budget
Q5) Which statement best describes a characteristic of the master budget?
A) It is divided into daily and weekly budgets.
B) It is created externally and imposed on management.
C) It provides a selective financial plan for the organization as a whole.
D) It is typically for a 1-year period corresponding to the fiscal year of the company.
Q6) What are the advantages of budgeting?
11
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Chapter 10: Standard Costing: a Managerial Control Tool
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172 Verified Questions
172 Flashcards
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Sample Questions
Q1) Refer to Bi-land Company. What are the upper and lower control limits, respectively?
A) $165,000 and $105,000
B) $165,000 and $135,000
C) $175,000 and $150,000
D) $205,000 and $95,000
Q2) Managers develop price standards when they determine what amount should be paid for the quantity of input to be used.
A)True
B)False
Q3) Refer to Serenity Equestrian Corporation. What is the labour rate variance?
A) $2,250 U
B) $2,250 F
C) $2,500 U
D) $2,500 F
Q4) Currently attainable standards offer the most behavioural benefits because higher performance levels are attained through challenging, yet achievable, standards.
A)True
B)False
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Chapter 11: Flexible Budgets and Overhead Analysis
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147 Verified Questions
147 Flashcards
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Sample Questions
Q1) Refer to Bridgestone Company. When using an after-the-fact flexible budget, what is the total overhead budget variance?
A) $3,600 U
B) $3,600 F
C) $4,000 U
D) $4,000 F
Q2) Within which category are the major differences between functional and activity-based budgeting found?
A) direct labour and overhead
B) direct materials and overhead
C) overhead and selling and administration
D) direct materials and selling and administration
Q3) Performance reports compare actual costs with budgeted costs.
A)True
B)False
Q4) Which formula reflects the fixed overhead spending variance?
A) AFOH - BFOH
B) AFOH - (SFOR × SH)
C) BFOH - (SFOR × SH)
D) AFOH - (SFOR × AH)
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Chapter 12: Performance Evaluation and Decentralization
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Sample Questions
Q1) What does the difference between realization and sacrifice define?
A) reliability
B) customer value
C) target objectives
D) single-loop feedback
Q2) Refer to Giga-Stuff, Inc. Assume that Sophistosand and Videostuff have agreed on a transfer price of $2.20. What is the total benefit for Sophistosand?
A) $18,000
B) $63,000
C) $69,000
D) $81,000
Q3) Transfer pricing can affect the level of after-tax profits earned by a multinational company.
A)True
B)False
Q4) A key feature of economic value added (EVA) is that it emphasizes after-tax operating income and the actual cost of capital.
A)True
B)False
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Chapter 13: Short-Run Decision Making: Relevant Costing
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84 Verified Questions
84 Flashcards
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Sample Questions
Q1) Target costing can be used most effectively in the design and development stage of the product life cycle.
A)True
B)False
Q2) Which of the following is NOT a step in the decision-making model?
A) Identify alternatives.
B) Consider qualitative factors.
C) Total the relevant costs and benefits for each alternative.
D) Determine costs and benefits for both feasible and unfeasible alternatives.
Q3) The benefit sacrificed when one alternative is chosen over another is called opportunity cost.
A)True
B)False
Q4) A segment margin is always greater than or equal to zero.
A)True
B)False
Q5) Short-run decision making only involves short-run decisions that have nothing to do with the firm's overall strategy.
A)True
B)False
Page 15
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Chapter 14: Capital Investment Decisions
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151 Flashcards
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Sample Questions
Q1) Refer to Present Value Tables. Cinnamon Company is considering an investment in new imaging equipment that will cost $400,000. The equipment is expected to yield cash inflows of $80,000 per year for a six-year period. The company has set a required rate of return at 10%. What is the net present value of the investment?
A) ($348,600)
B) ($51,600)
C) $51,600
D) $348,400
Q2) Suppose the cash flows of a project are received evenly over the life of the project. What formula is used to calculate the payback period?
A) original investment / annual cash flow
B) original investment × annual cash flow
C) original investment + annual cash flow
D) original investment - annual cash flow
Q3) One way to use the payback period is to set a maximum payback period for all projects and to reject any project that exceeds this level.
A)True
B)False
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