Managerial Accounting Final Exam Questions
Course Introduction
Managerial Accounting focuses on the processes and techniques that managers use to measure, analyze, and interpret financial information for internal decision-making. The course covers cost behavior, budgeting, performance evaluation, and various costing systems. Emphasis is placed on practical applications such as cost-volume-profit analysis, variance analysis, relevant costing, and the integration of financial and non-financial data to support strategic planning and management control. Through case studies and real-world examples, students gain insights into how managerial accounting contributes to effective organizational management and improved business performance.
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Managerial accounting 10th Canadian Edition by Ray Garrison
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Chapter 1: Managerial Accounting and the Business Environment
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Q1) Obtaining feedback is generally identified most directly with which of these functions of management?
A) Planning.
B) Directing and motivating.
C) Controlling.
D) Decision making.
Answer: C
Q2) Identifying alternatives and selecting the best among them is part of which of the following activities which managers carry on in organizations?
A) Controlling.
B) Directing.
C) Planning.
D) Motivating.
Answer: C
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Chapter 2: Cost Terms, Concepts, and Classifications
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Q1) What was the beginning work-in-process inventory?
A) $10,000.
B) $14,000.
C) $1,000.
D) $4,000.= 105,000 + 4,000 - 40,000 - 39,000 - 20,000 = $10,000
Answer: A
Q2) For a manufacturing company,which of the following is an example of a period cost rather than a product cost?
A) Depreciation of factory equipment.
B) Wages of salespersons.
C) Wages of machine operators.
D) Insurance on factory equipment.
Answer: B
Q3) Variable costs are costs whose per unit costs vary as the activity level rises and falls. A)True
B)False
Answer: False
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Chapter 3: Cost Behaviour: Analysis and Use
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Q1) The contribution approach to constructing an income statement emphasizes the functions of production,administration and sales.
A)True
B)False
Answer: False
Q2) Using the high-low method,the estimated fixed cost per month for electricity is closest to which of the following?
A) $870.00.
B) $1,150.00.
C) $1,290.00.
D) $1,306.50.
Answer: B
Q3) The "goodness of fit" statistic (that is,R-squared)associated with the least-squares regression method indicates the proportion of a mixed cost that is variable.
A)True
B)False
Answer: False
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Chapter 4: Cost-Volume-Profit Relationships
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Q1) What is the break-even point in sales dollars?
A) $240,000.
B) $560,000.
C) $728,000.
D) $408,000.
Q2) The contribution margin ratio is closest to which of the following?
A) 47.1%.
B) 2.1%.
C) 1.9%.
D) 52.9%.
Q3) What is the break-even point in sales dollars?
Refer To: 04-05
A) $48,000.
B) $72,000.
C) $28,800.
D) $0.
Q4) At the break-even point: Sales - Variable expenses = Fixed expenses.
A)True B)False
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Chapter 5: Systems Design: Job-Order Costing
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Q1) What is the indirect labour cost?
A) $5,000.
B) $12,000.
C) $15,000.
D) $35,000.
Q2) Stan Wilson,a newly hired worker at Superior Moulding,was puzzled by the job cost sheets attached to the jobs he worked on.He understood the materials and labour cost entries;these entries represent the actual costs of materials he requisitioned for the job and the cost of the labour hours he recorded for the job.However,he did not understand the entry for Manufacturing Overhead.This entry was made at the end of the day by the accountants,and he had no idea where this number came from.He asked the company's controller,Mary Donner,but the only part of the explanation he understood was that the overhead entries do not represent actual overhead costs. Required:
Explain to Stan what the Manufacturing Overhead entries on the job cost sheet mean.
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Chapter 6: Systems Design: Process Costing
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Q1) (Appendix 6A)Assuming that the company uses the FIFO cost method,what is the cost per equivalent unit for conversion costs for June,rounded to the nearest cent?
A) $1.80.
B) $1.40.
C) $1.64.
D) $1.35.
Q2) What was the cost of the work-in-process inventory in the Finishing Department at the end of May?
A) $7,600.
B) $10,000.
C) $2,500.
D) $4,000.
Q3) What are the equivalent units of production for material for the month?
A) 70,000 units.
B) 90,000 units.
C) 80,000 units.
D) 82,500 units.
Q4) $4 per EU x 5,000 × 80% = $16,000
b)
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Chapter 7: Activity-Based Costing: a Tool to Aid Decision Making
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Q1) Transaction drivers usually take more effort to record than duration drivers. A)True
B)False
Q2) The predetermined overhead rate under the traditional costing system is closest to which of the following?
A) $13.17.
B) $21.60.
C) $37.46.
D) $270.66.
Q3) (Appendix 7A)The predetermined overhead rate under the traditional costing system is closest to:
A) $89.11
B) $101.84
C) $47.52
D) $122.91
Q4) Unit-level production activities are performed each time a unit is made. A)True B)False
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Chapter 8: Variable Costing: a Tool for Management
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Q1) Which of the following statements is true for a firm that uses variable costing?
A) The unit product cost changes as a result of changes in the number of units manufactured.
B) Both variable selling costs and variable production costs are included in the unit product cost.
C) Operating income moves in the same direction as sales.
D) Operating income is greatest in periods when production is highest.
Q2) What was the unit product cost under variable costing?
A) $15.
B) $18.
C) $20.
D) $22.
Q3) What was the total contribution margin for the month?
A) $39,600.
B) $88,000.
C) $123,200.
D) $171,600.
Q4) Absorption costing treats all manufacturing costs as product costs.
A)True
B)False
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Chapter 9: Budgeting
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Q1) Control involves developing objectives and preparing the various budgets to achieve those objectives.
A)True
B)False
Q2) What is the opening inventory in units for September?
A) 370 units.
B) 530 units.
C) 670 units.
D) 6,700 units.
Q3) Which of the following variances in a comprehensive performance report using the flexible budget concept is the most appropriate for measuring efficiency of operations?
A) Sales volume variance.
B) Contribution margin variance.
C) Flexible budget variance.
D) Total static budget variance.
Q4) The effect of responsibility accounting is to personalize the accounting system.
A)True
B)False
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Chapter 10: Standard Costs and Overhead Analysis
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Q1) What was the budgeted fixed factory overhead cost for January?
A) $30,625.
B) $31,500.
C) $32,375.
D) $33,250.
Q2) What was the fixed overhead budget variance for March?
A) $900 favourable.
B) $3,000 unfavourable.
C) $3,900 favourable.
D) $7,750 favourable.
Q3) What was the predetermined fixed overhead rate,rounded to the nearest cent?
A) $11.94.
B) $12.24.
C) $13.55.
D) $13.87.
Q4) What was the variable overhead spending variance?
A) $740 favourable.
B) $740 unfavourable.
C) $820 favourable.
D) $820 unfavourable.
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Chapter 11: Reporting for Control
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Questions
Q1) The Northern Division of the Smith Company had average total operating assets of $150,000 last year.Its minimum required rate of return was 12%.The division reported operating income of $20,000.What was the residual income for the Northern Division last year?
A) $2,000.
B) $5,000.
C) $18,000.
D) $20,000.
Q2) (Appendix 11A)Suppose Maintenance Department costs are allocated on the basis of labour hours.What would be the amount of cost allocated to Milling from Maintenance under the direct method?
A) $5,250.
B) $5,600.
C) $5,700.
D) $6,720.
Q3) What was Division A's residual income?
A) $20,000.
B) $30,000.
C) $35,000.
D) $45,000.
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Chapter 12: Relevant Costs for Decision Making
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Q1) Two or more different products that are manufactured in the same production period are known as joint products.
A)True
B)False
Q2) The book value of old equipment is NOT a relevant cost in an equipment replacement decision.
A)True
B)False
Q3) (Appendix 12A)The markup percentage that would be needed on the new product is closest to which of the following?
A) 12.5%.
B) 24.0%.
C) 51.0%.
D) 59.5%.Markup = (650,000 * ,25 + 60,000 * 3 + 300,000)/(60,000 * 18)= 59.5%.
Q4) A sunk cost is a cost that has already been incurred and cannot be avoided regardless of what action is chosen.
A)True
B)False
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Chapter 13: Capital Budgeting Decisions
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Q1) A company with $800,000 in operating assets is considering the purchase of a machine that costs $75,000 and which is expected to reduce operating costs by $20,000 each year.The payback period for this machine in years is closest to which of the following? (Ignore income taxes in this problem. )
A) 0.27 years.
B) 3.75 years.
C) 10.70 years.
D) 40.00 years.
Q2) The payback period would be closest to which of the following?
A) 2.90 years.
B) 3.00 years.
C) 3.33 years.
D) 8.00 years.
Q3) What is the payback period for this investment? (Round your answer to the one decimal place. )
A) 2.1 years.
B) 2.3 years.
C) 2.8 years.
D) 4.2 years.
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Chapter 14: Financial Statement Analysis Online
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Q1) Lisa Inc.'s book value per common share at December 31,Year 2,was closest to which of the following?
A) $10.00.
B) $11.25.
C) $18.33.
D) $19.33.
Q2) Larosa Company's dividend payout ratio for Year 2 was closest to which of the following?
A) 6.5%.
B) 10.6%.
C) 17.9%.
D) 21.7%.
Q3) Marcell Company's average sale period (turnover in days)for Year 2 was closest to which of the following?
A) 15.7 days.
B) 22.6 days.
C) 25.8 days.
D) 36.9 days.
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