Managerial Accounting Exam Bank
Course Introduction
Managerial Accounting explores the principles, techniques, and practices that enable managers to use accounting information for effective decision-making, planning, and control within an organization. The course covers topics such as cost behavior, budgeting, performance evaluation, variance analysis, and relevant costing for managerial decisions. Students learn how to analyze financial data, develop operational plans, and apply accounting tools to make informed business choices that align with organizational goals. Through case studies and real-world examples, the course emphasizes the role of managerial accounting in strategic planning and the overall success of modern enterprises.
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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Page 2
Chapter 1: Introduction to Managerial Accounting
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Sample Questions
Q1) IFRS stands for "important financial reporting standards".
A)True
B)False
Answer: False
Q2) What has been the determining factor in the way that we now view managerial accountants?
A)Stricter audit standards
B)Stricter GAAP standards
C)Technology
D)None of the above Answer: C
Q3) Management accounting requires independent audits of the firm's books.
A)True
B)False
Answer: False
Q4) Evaluating the results of business operations against a plan and then making adjustments to that plan is called budgeting.
A)True
B)False
Answer: False
Page 3
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Chapter 2: Building Blocks of Managerial Accounting
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Sample Questions
Q1) What is the cost of goods sold?
A)$500,000
B)$428,000
C)$685,000
D)$548,000
Answer: B
Q2) A restaurant is facing a decision about whether it should bake its own dinner rolls or whether it should continue to purchase the dinner rolls from a local bakery.Which of the following costs would be relevant to its decision?
A)The salary of the restaurant manager
B)The purchase price of the dinner rolls purchased from the local bakery
C)The price the restaurant sells the dinner rolls for
D)The original purchase price of the current machinery
Answer: B
Q3) What is the total cost for the distribution category of the value chain?
A)$19,000
B)$17,000
C)$176,000
D)$244,000
Answer: B
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Chapter 3: Job Costing
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Sample Questions
Q1) An underallocation of manufacturing overhead is typically corrected by increasing Cost of Goods Sold on the income statement.
A)True
B)False
Answer: True
Q2) The most significant cost for a service firm is direct materials cost.
A)True
B)False
Answer: False
Q3) What is the beginning raw materials inventory?
A)$15,400
B)$22,500
C)$ 3,500
D)$67,800
Answer: B
Q4) A service firm's costs are comprised of direct materials,direct labor and manufacturing overhead.
A)True
B)False
Answer: False
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Chapter 4: Activity-Based Costing,
Costs of Quality
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Sample Questions
Q1) If a company uses departmental overhead allocation rates,then the amount of manufacturing overhead allocated to the job is equal to the plantwide overhead rate multiplied by the actual use of the cost allocation base.
A)True
B)False
Q2) What is the cost per driver unit for the account billing activity?
A)$ 7.50
B)$ 1.50
C)$10.00
D)$ 0.75
Q3) What is the last step in developing an ABC system?
A)Identify the primary activities and estimate a total cost pool for each.
B)Allocate the costs to the cost object using the activity cost allocation rates.
C)Select an allocation base for each activity.
D)Calculate an activity cost allocation rate for each activity.
Q4) The benefits are lower when ABC reports different product costs than reported under the old system.
A)True
B)False
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Chapter 5: Process Costing
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Sample Questions
Q1) If a company has no ending work in process inventory,it must use the 5-step process costing procedure to determine the cost of making one unit.
A)True
B)False
Q2) Prime costs include direct labor and direct materials.
A)True
B)False
Q3) What are the two basic types of product costing systems?
A)Department and plant
B)FIFO and weighted-average
C)Job and process
D)Variable and process
Q4) ABC produces ping pong balls using a three-step process that includes molding,coloring and finishing.Which account is debited when the balls are totally completed?
A)Finished goods inventory
B)WIP inventory-finishing
C)Manufacturing overhead
D)WIP inventory-coloring
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Chapter 6: Cost Behavior
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Sample Questions
Q1) Using account analysis,what type of cost is the rental of a space at $2,000 per month?
A)Fixed B)Mixed
C)Step
D)Variable
Q2) The variable cost per unit of activity increases as activity increases. A)True
B)False
Q3) If a manager sees a potential outlier in the data,he or she should first determine whether the data is correct.
A)True
B)False
Q4) Pedro Company has total fixed costs of $480,000.Total fixed and variable costs are $600,000 at a production level of 150,000 units.The variable cost per unit at 300,000 units is:
A)$4.00.
B)$0.80.
C)$0.40.
D)$3.20.
Page 8
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Chapter 7: Cost-Volume-Profit Analysis
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Sample Questions
Q1) By multiplying the operating leverage factor by the anticipated percentage change in volume,one can find the anticipated change:
A)in sales revenue.
B)in contribution margin.
C)in fixed expenses.
D)in operating income.
Q2) The sales mix can greatly affect CVP relationships.
A)True
B)False
Q3) If the sale price per unit is $75,the variable expense per unit is $45,and total fixed expenses are $1,155,000,what will the breakeven sales in units be?
A)15,400
B)25,667
C)38,500
D)9,625
Q4) CVP stands for Cost-Volume-Profit.
A)True
B)False
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9
Chapter 8: Short Term Business Decisions
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Sample Questions
Q1) Indicate whether each item below is a characteristic of a price-taker or a price-setter.Use PT for price-taker and PS for price-setter. a)Less competition
B)Cost-plus pricing
C)Product lacks uniqueness
D)Target pricing
E)Heavy competition
Q2) Gas Country is considering selling premium gasoline.It already sells regular for $3.09/gallon and would sell premium gasoline for $3.22/gallon.The cost to further refine the regular gas into premium would be $.12/gallon.A cost that would NOT be considered in this decision would be:
A)the extra revenue generated by selling premium.
B)the cost of refining the regular gasoline.
C)the cost of further processing the regular gas into premium gas.
D)any of the above.
Q3) What is the contribution margin per machine hour for cat condos?
A)$90
B)$60
C)$270
D)$30
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Page 10
Chapter 9: The Master Budget and Responsibility Accounting
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Sample Questions
Q1) Benson Stores wants to have 500 flashlights in ending inventory on December 31.Budgeted sales for December are 1,950 flashlights.The November 30 inventory was 300 flashlights.How many flashlights should Benson Stores purchase for December?
A)2,450
B)1,750
C)2,150
D)2,750
Q2) What are the total cash disbursements in October for the purchase of merchandise?
A)$37,360
B)$45,280.
C)$9,880
D)$45,280
Q3) 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
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Page 11
Chapter 10: Flexible Budgets and Standard Costs
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Sample Questions
Q1) A company receives an unusually high number of orders in a month.To produce all of the orders within the scheduled dates of delivery,the company pays employees an extra $10 per hour for every hour of overtime the employees work.Which variance is directly impacted?
A)Materials price variance
B)Materials efficiency variance
C)Labor price variance
D)Labor efficiency variance
Q2) Standard costs for production inputs help motivate employees by serving as benchmarks against which their performance is measured.
A)True
B)False
Q3) What is the direct materials price variance?
A)$1,250 unfavorable
B)$2,000 favorable
C)$1,250 favorable
D)$2,000 unfavorable
Q4) Journalize the allocation of overhead costs to Work in Process Inventory and closing manufacturing overhead costs to overhead variances.
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Chapter 11: Performance Evaluation and the Balanced Scorecard
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Sample Questions
Q1) What is the Beverage Division's Return on Investment (ROI)?
A)250.00%
B)50.00%
C)20.00%
D)8.57%
Q2) The Frito-Lay division of PepsiCo is most likely treated as a(n):
A)cost center.
B)investment center.
C)profit center.
D)revenue center.
Q3) Decentralization helps keep a company's costs down since each business unit may have its own purchasing department.
A)True
B)False
Q4) Which of the following is a disadvantage of decentralization?
A)Management does not have time to concentrate on long-term strategic planning.
B)Unit managers may not understand the big picture of the company.
C)Unit managers have decreased motivation and retention.
D)Managers receive training and experience to allow advancement in the organization.
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Chapter 12: Capital Investment Decisions and the Time Value of Money
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Sample Questions
Q1) The payback and accounting rate of return models are conceptually better than the discounted cash flow models because they are based on cash flows,and they consider both profitability and the time value of money.
A)True
B)False
Q2) The Harris Corporation bought a new machine that cost $170,000 with a 15-year life and a residual value of $20,000.They plan to generate annual cash inflows of $40,000 over 15 years.Calculate the accounting rate of return.
Q3) (Present value tables are required.)Lombard Corporation is evaluating the purchase of a new machine that would have an initial cost of $120,000.This new machine would have a profitability index of 1.25.The company's discount rate is 12%.What is the present value of the net cash inflows of the new machine project?
A)$ 14,400
B)$ 96,000
C)$ 150,000
D)$1,000,000
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Page 14
Chapter 13: Statement of Cash Flows
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Sample Questions
Q1) Which of the following would NOT be done when calculating the change in cash from operating activities under the indirect method?
A)Add an increase in accrued interest payable
B)Deduct the purchase of equipment
C)Add a decrease in merchandise inventory
D)Deduct a decrease in accounts payable
Q2) Which of the following is TRUE if a corporation shows a net loss on its income statement?
A)The company may still have a net increase in cash.
B)The company will not be able to sell stock.
C)The company will not be able to pay dividends.
D)The company may still have an increase in retained earnings.
Q3) The direct method of presenting the financing activities section of the statement of cash flow reconciles net income to net cash provided by financing activities.
A)True
B)False
Q4) Calculate the cash paid for merchandise for the year.
Q5) List three ways that owners and investors use the statement of cash flows.
Q6) Compute the change in accounts payable for the year.
Page 15
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Chapter 14: Financial Statement Analysis
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Sample Questions
Q1) In a horizontal analysis,knowing the percentage change is a better analytical tool than knowing the actual dollar change.
A)True
B)False
Q2) Which of the following is MOST helpful in comparing companies of different sizes?
A)Ratio analysis
B)Using common-sized statements
C)Both ratio analysis and using common-sized statements
D)Neither one
Q3) Trend percentages are a form of vertical analysis.
A)True
B)False
Q4) Which of the following is the formula for computing the dividend yield?
A)(Net income - preferred dividends)/ number of shares of outstanding common stock
B)Market price per share of common stock / earnings per share
C)Total stockholders' equity / number of shares of outstanding common stock
D)Annual dividend per share of common stock / market price per share of common stock
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Page 16