Management and Cost Control Study Guide Questions
Course Introduction
This course explores the fundamental principles and techniques of management and cost control within organizational settings. Students will learn how to plan, monitor, and evaluate financial resources to achieve strategic goals efficiently. Emphasis is placed on cost classification, cost behavior analysis, budgeting processes, variance analysis, and performance measurement. By integrating case studies and real-world scenarios, the course prepares students to make informed managerial decisions that optimize resource allocation and support sustainable business growth.
Recommended Textbook
Managerial Accounting 2nd Edition by Karen
W. Braun
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14 Chapters
2698 Verified Questions
2698 Flashcards
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Chapter 1: Introduction to Managerial Accounting
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Sample Questions
Q1) Which of the following would have little effect on a cost-benefit analysis?
A)Constant prices
B)Steadily rising prices
C)Rapidly declining prices
D)None of the above
Answer: A
Q2) Which of the following describes a system in which suppliers deliver materials at the time they are needed?
A)ERP
B)JIT
C)TQM
D)ISO
Answer: B
Q3) Failure to mitigate conflicts of interest would violate the ethical conduct standard of: A)competency.
B)confidentiality.
C)credibility.
D)integrity.
Answer: D
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Page 3
Chapter 2: Building Blocks of Managerial Accounting
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Sample Questions
Q1) You are trying to decide whether or not to sell back your accounting textbook at the end of the class.The cost you paid for the book is relevant to your decision.
A)True
B)False
Answer: False
Q2) The income statements of manufacturing companies are much less complex than those of service or merchandising companies.
A)True
B)False
Answer: False
Q3) What was gross profit?
A)$(171,000)
B)$156,000
C)$161,000
D)$182,000
Answer: C
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Chapter 3: Job Costing
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Sample Questions
Q1) If Sable Company uses direct labor cost as the allocation base,what would the predetermined manufacturing overhead rate be?
A)70%
B)80%
C)89%
D)78%
Answer: B
Q2) Stacey Enterprises uses job costing.Actual overhead for the year was $394,500.The allocated overhead was $511,700.What is the balance in the manufacturing overhead account?
A)$117,200 overallocated
B)$117,200 underallocated
C)$906,200 overallocated
D)$394,500 underallocated
Answer: A
Q3) If manufacturing overhead has been overallocated during the year,it means the jobs have been overcosted.
A)True
B)False
Answer: True
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Chapter 4: Activity-Based Costing, lean Production, and the Costs of Quality
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Sample Questions
Q1) Which of the following describes how,in ABC,the activity allocation rate is computed?
A)The total estimated activity cost pool is divided by the total estimated activity allocation base.
B)The total estimated activity allocation base is divided by the total estimated activity cost pool.
C)The total estimated activity allocation base is multiplied by the total estimated activity cost pool.
D)You take the total estimated activity allocation base and subtract the total estimated total activity cost pool.
Q2) The plantwide overhead cost allocation rate is computed by dividing the estimated total manufacturing overhead costs of the department by the estimated total quantity of the department's cost allocation base.
A)True
B)False
Q3) Refined costing systems can be used to allocate ANY indirect costs to ANY cost objects.
A)True
B)False
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Chapter 5: Process Costing
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Sample Questions
Q1) On December 31,the total costs of units complete and transferred would be closest to:
A)$ 1,153.
B)$22,617.
C)$21,047.
D)$15,124.
Q2) The total number of physical units for which we have to account is:
A)42,000.
B)60,000.
C)57,000.
D)54,000.
Q3) The journal entry to record the ultimate completion of the units would include a debit to the WIP inventory account of the last sequential production department.
A)True B)False
Q4) The number of equivalent units is computed after computing the cost per equivalent unit.
A)True B)False
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Chapter 6: Cost Behavior
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Sample Questions
Q1) If a regression analysis shows an R factor of .85 exists,it is safe to assume:
A)a strong positive relationship between cost and volume.
B)a strong negative relationship between cost and volume.
C)no relationship between cost and volume.
D)a perfect positive relationship between cost and volume .
Q2) Feathered Nests produces decorative birdhouses.The company's average cost per unit is $20.00 when it produces 2,000 birdhouses.If $4,800 of the costs are fixed,and the plant manager uses the average cost per unit to predict total costs,his forecast for 2,200 birdhouses will be:
A)$ 44,000.
B)$ 43,520.
C)$ 4,000.
D)$ 40,000.
Q3) Net income reported under absorption costing will exceed net income reported under variable costing for a given period if:
A)production equals sales for that period.
B)production exceeds sales for that period.
C)sales exceed production for that period.
D)variable overhead exceeds fixed overhead for that period.
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Page 8
Chapter 7: Cost-Volume-Profit Analysis
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Sample Questions
Q1) Given breakeven sales in units of 28,000 and a unit contribution margin of $4,how many units must be sold to reach a target operating income of $4,000?
A)29,000
B)1,000
C)16,000
D)27,000
Q2) Gibbs Company has a product which sells for $100 and has a unit contribution margin of $45.It has fixed costs of $30/unit at the current production volume.Gibbs Company's contribution margin ratio is:
A)45%.
B)30%.
C)85%.
D)75%.
Q3) To find the weighted average contribution margin,a company adds up the individual unit contribution margins of the different products and then divides by the total number of different products.
A)True
B)False
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Chapter 8: Short Term Business Decisions
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Sample Questions
Q1) Fixed costs that do NOT differ between two alternatives are:
A)relevant to the decision.
B)considered opportunity costs.
C)irrelevant to the decision.
D)important only if they represent a material dollar amount.
Q2) Accessibility Products Company is thinking of dropping model F because it is reporting an operating loss.All fixed costs are unavoidable.Assume Accessibility Products Company is able to increase the sale price of product F to $33,000 with no change in volume of units sold and no change in variable costs or fixed costs.What affect will this have on operating income?
A)Increase $29,000
B)Increase $4,000
C)Decrease $29,000
D)Decrease $4,000
Q3) Fixed costs that continue to exist even after a product line is dropped are called:
A)avoidable fixed costs.
B)unavoidable fixed costs.
C)variable fixed costs.
D)relevant fixed costs.
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Page 10
Chapter 9: The Master Budget and Responsibility Accounting
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Sample Questions
Q1) Which of the following budgets is part of the operating budgets?
A)Production budget
B)Budgeted balance sheet
C)Capital expenditure budget
D)Cash budget
Q2) The master budget only includes the sales budget,the capital expenditures budget,and the financial budget.
A)True
B)False
Q3) Which term below best fits "a technique dealing with 'what-if' scenarios"?
A)Operating budget
B)Master budget
C)Responsibility center
D)Sensitivity analysis
Q4) Which of the following is NOT a responsibility center?
A)Cost center
B)Profit center
C)Equity center
D)Investment center
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Chapter 10: Flexible Budgets and Standard Costs
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Sample Questions
Q1) A company uses milk in producing its product.If the price of milk doubles,which variance is directly impacted?
A)Materials price variance
B)Materials efficiency variance
C)Labor price variance
D)Labor efficiency variance
Q2) Which budget is best for managers to use to plan revenues and expenses at different sales volumes?
A)Capital budget
B)Flexible budget
C)Static budget
D)Master budget
Q3) Which term below is best paired with "measures how well the business keeps unit prices of direct materials and direct labor inputs within standards"?
A)Production volume variance
B)Overhead flexible budget variance
C)Efficiency variance
D)Price variance
Q4) Identify five benefits of standard costs.
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Chapter 11: Performance Evaluation and the Balanced Scorecard
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Sample Questions
Q1) Management by exception would dictate that the manager investigate which of the following variances?
A)Variances which are greater than a certain dollar amount or percentage.
B)Variances which are less than a certain dollar amount or percentage.
C)All unfavorable variances.
D)All favorable and unfavorable variances.
Q2) What is the Beverage Division's Residual Income (RI)?
A)$722,400
B)$688,800
C)$411,600
D)$151,200
Q3) What is the division's sales margin?
A)200.00%
B)15.00%
C)25.00%
D)30.00%
Q4) Sales margin is calculated as sales divided by operating income.
A)True
B)False
Q5) List and describe the goals of performance evaluation systems.
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Chapter 12: Capital Investment Decisions and the Time Value of Money
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Sample Questions
Q1) Capital budgeting techniques such as payback method and net present value are based upon Generally Accepted Accounting Principles (GAAP)and accrual accounting.
A)True
B)False
Q2) In calculating the net present value of an investment in equipment,the required investment and its terminal residual value should be subtracted from the present value of all future cash inflows.
A)True B)False
Q3) The process of making capital investment decisions is referred to as capital return.
A)True B)False
Q4) Calculating interest on the principal and on all the interest earned to date is called compound interest.
A)True
B)False
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Page 14
Chapter 13: Statement of Cash Flows
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Sample Questions
Q1) When a company uses the direct method to present the statement of cash flows,cash received from the sale of treasury stock increases the amount of net cash provided by investing activities.
A)True
B)False
Q2) The only part that differs in a statement of cash flows using the direct method rather than the indirect method is:
A)the financing activities section.
B)the investing activities section.
C)the operating activities section.
D)none of the above.
Q3) Operating activities resulting from the sales of goods and services relate to:
A)retained earnings reported on the balance sheet.
B)assets and liabilities reported on the balance sheet.
C)net income on the retained earnings statement.
D)the income statement.
Q4) The statement of cash flows reflects cash flows on a particular date.
A)True
B)False
Q5) List three ways that owners and investors use the statement of cash flows.
Page 15
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Chapter 14: Financial Statement Analysis
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Sample Questions
Q1) Horizontal analysis and vertical analysis are used to analyze the performance of a single company.
A)True
B)False
Q2) Which of the following is the formula for computing the rate of return on common stockholders' equity?
A)(Net income + interest expense)/ average total assets
B)Net income / net sales
C)(Net income - preferred dividends)/ average common stockholders' equity
D)(Net income - preferred dividends)/ number of shares of outstanding common stock
Q3) What is the rate of return on net sales for the current year?
A)0.34
B)0.13
C)0.04
D)1.44
Q4) Working capital is a measure of a company's profitability.
A)True
B)False
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