Managerial Accounting Final Test Solutions
Course Introduction
Managerial Accounting focuses on the internal use of accounting information by managers within organizations for decision-making, planning, and control purposes. This course covers key topics such as cost behavior, budgeting, performance evaluation, relevant costing, and product costing systems. Students learn how to analyze financial data, prepare various managerial reports, and utilize accounting techniques to support strategic business decisions. Emphasis is placed on understanding the role of managerial accounting in resource allocation, operational efficiency, and achieving organizational objectives.
Recommended Textbook
Cornerstones of Managerial Accounting 3rd Edition by
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14 Chapters
2120 Verified Questions
2120 Flashcards
Source URL: https://quizplus.com/study-set/3659
Maryanne M. Mowen
Page 2
Chapter 1: Introduction to Managerial Accounting
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64 Verified Questions
64 Flashcards
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Sample Questions
Q1) The individual responsible for the finance function; raises capital and manages cash and investments
A)Financial accounting
B)Managerial accounting
C)Planning
D)Controlling
E)Decision making
F)Value chain
G)Continuous improvement
H)Line positions
I)Time
J)Total quality management
K)Lean accounting
L)Staff positions
M)Controller
N)Treasurer
O)Ethical behaviour
Answer: N
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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) A company's beginning work-in-process inventory is $120,000, its ending work-in-process inventory is $160,000, its cost of goods manufactured is $400,000, and its direct materials used are $100,000. What are the conversion costs?
A) $140,000
B) $280,000
C) $300,000
D) $340,000
Answer: D
Q2) Direct costs are those costs that can be easily and accurately traced to a cost object.
A)True
B)False
Answer: True
Q3) What is opportunity cost?
A) a benefit that is difficult to accurately trace to a cost object
B) a cost that increases as output increases and decreases as output decreases
C) a cost that decreases as output increases and increases as output decreases
D) a benefit given up or sacrificed when one alternative is chosen over another
Answer: D
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4
Chapter 3: Cost Behaviour
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211 Verified Questions
211 Flashcards
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Sample Questions
Q1) Refer to St. John's Company. What can be assumed from the information provided?
A) Insurance is a fixed cost.
B) Depreciation is a mixed costs.
C) Output decreased from March to April.
D) Output stayed the same from March to April.
Answer: A
Q2) Refer to Drumheller Company. Which element is the intercept?
A) output
B) total cost
C) fixed cost
D) variable rate
Answer: C
Q3) Refer to Saskatoon Company. Using the least squares (regression) method, what is the value of the intercept (rounded to the nearest penny)?
A) $0.99
B) $195.35
C) $10,630.80
D) $190,267.00
Answer: C
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Page 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) The units sold or expected to be sold or sales revenue earned or expected to be earned above the break-even volume
A)Break-even point
B)Common fixed expenses
C)Contribution margin
D)Direct fixed expenses
E)Margin of safety
F)Operating leverage
G)Degree of operating leverage
H)Sales mix
Q2) Which statement describes a characteristic of the cost-volume-profit graph?
A) It is hard to interpret.
B) It cannot be plotted if the break-even point is known.
C) It shows the relationship among cost, volume, and profits.
D) It reveals how costs change as sales volume remains the same.
Q3) Refer to Desjardin Tools. What is the variable cost ratio?
A) 19%
B) 42%
C) 50%
D) 54%
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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) Which of the following reflects Finished Goods Inventory?
A) Raw Materials Inventory
B) Work-in-Process Inventory
C) completed job-order cost sheets
D) incomplete job-order cost sheets
Q2) White Mountain Company produces various types of snow skis. Estimated overhead for the year was $780,000 and estimated direct labour hours were 260,000. During the month of June, 18,100 direct labour hours were worked, $55,400 of direct materials were used, and the average wage was $15 per hour. In June, 10,000 pairs of skis were produced.
A. Calculate the predetermined overhead rate.
B. Calculate the overhead applied to production for June.
C. Calculate unit cost for each pair of skis.
Q3) For which of the following are time tickets filled out?
A) managers
B) supervisors
C) direct labourers
D) indirect labourers
Q4) Discuss overapplied and underapplied overhead.
Q5) What are the three steps of overhead application?
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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 weighted average costing method assumes that units in beginning Work-in-Process Inventory are completed first, before any new units are started.
A)True
B)False
Q2) Calculation of equivalent units
A)Step 1 in preparing a Production Report
B)Step 2 in preparing a Production Report
C)Step 3 in preparing a Production Report
D)Step 4 in preparing a Production Report
E)Step 5 in preparing a Production Report
Q3) Which of the following reflects the solution for nonuniform manufacturing inputs using process costing?
A) the use of the weighted average costing method
B) the calculation of equivalent units for each category of manufacturing input
C) the use of the FIFO costing method or the weighted average costing method
D) the calculation of total unit cost as if there were uniform manufacturing inputs
Q4) Describe the differences between sequential and parallel processing.
Q5) Describe the differences between process costing and job-order costing.
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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) Unrealized external failure costs are also known as societal costs.
A)True
B)False
Q2) A company has two inspectors, each earning a salary of $150,000. One inspector works exclusively on inspecting parts received from outside suppliers, while the other spends 40% of her time inspecting parts and 60% of her time inspecting final products. How much labour cost should be assigned to the activity of inspecting parts?
A) $60,000
B) $90,000
C) $210,000
D) $300,000
Q3) Refer to Sallisaw Savings & Loan. Using activity-based costing, what is the activity rate for processing transactions?
A) $0.10 per transaction
B) $0.20 per transaction
C) $3.42 per transaction
D) $102.50 per transaction
Q4) What is the activity based costing hierarchy? Give an example for each.
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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) Which of the following reflects the primary difference between variable and absorption costing?
A) inclusion of fixed selling expenses in period costs
B) inclusion of fixed selling expenses in product costs
C) inclusion of fixed manufacturing overhead in product costs
D) inclusion of variable manufacturing overhead in period costs
Q2) Refer to Carmel Company. The company has decided to begin ordering 60 units at a time. What is the average annual ordering cost of this new policy?
A) $60
B) $135
C) $150
D) $185
Q3) Which type of cost does NOT appear on a variable costing income statement?
A) direct labour
B) direct materials
C) opportunity cost
D) variable selling expense
Q4) List three problems that inventory is meant to solve. How does the JIT producer handle these problems?
Chapter 9: Budgeting, Production, Cash, and Master Budget
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165 Verified Questions
165 Flashcards
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Sample Questions
Q1) Which budget describes how many units must be made to meet sales needs and ending finished goods inventory objectives?
A) cash budget
B) production budget
C) budgeted income statement
D) direct materials purchases budget
Q2) Individual behaviour that is in basic conflict with the goals of the organization is called dysfunctional behaviour.
A)True
B)False
Q3) Refer to Southern Inc. What is the cost in dollars of purchases for July?
A) $7,970
B) $8,450
C) $19,925
D) $33,320
Q4) Refer to Bingimton Company. What was the operating income?
A) $2,400
B) $7,400
C) $9,400
D) $14,600
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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) Which statement best describes direct labour variances?
A) The labour rate and labour efficiency variances will always add up to the total labour variance.
B) The labour efficiency variance measures the difference between what was paid to direct labourers and what should have been paid.
C) The labour rate variance measures the difference between the labour hours that were actually used and the labour hours that should have been used.
D) The labour rate variance measures the difference between the labour hours that were originally budgeted and the labour hours that should have been used.
Q2) Operating personnel can easily achieve standards set by engineering studies. A)True
B)False
Q3) Managers develop price standards when they determine what amount should be paid for the quantity of input to be used.
A)True
B)False
Q4) Explain the kaizen approach to costing.
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12
Chapter 11: Flexible Budgets and Overhead Analysis
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147 Verified Questions
147 Flashcards
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Sample Questions
Q1) What is characteristic of activity-based budgeting?
A) It creates a budget after the fact.
B) It builds a budget for each function.
C) It identifies only the overhead activity.
D) It classifies costs as variable or fixed with respect to the activity output measure.
Q2) Activity-based budgeting approach focuses on cost items required by organizational units.
A)True
B)False
Q3) The variable cost component for each activity should correspond to the committed resources.
A)True
B)False
Q4) Refer to Lifter Company. Which of the following is a flexible budget formula for the moving materials activity?
A) $180,000 + $0.50 × moves
B) $405,000 + $0.50 × moves
C) $450,000 + $0.50 × moves
D) $450,000 + $2.00 × moves
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Chapter 12: Performance Evaluation and Decentralization
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145 Verified Questions
145 Flashcards
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Sample Questions
Q1) Refer to Corrugated, Inc. Assume that Corrugated, Inc. allows division managers to negotiate the transfer price. The Box Division is producing 400,000 boxes. Suppose the Box Division and the Candy Division agree to transfer boxes. What would be the ceiling of the bargaining range, and which division sets it?
A) $1.23; Box Division
B) $1.23; Candy Division
C) $1.40; Box Division
D) $1.40; Candy Division
Q2) The practice of delegating decision-making authority to lower levels of management in a company is called centralization.
A)True
B)False
Q3) Decreasing inventories leads to a reduction in return on investment (ROI).
A)True
B)False
Q4) The after-tax operating income reduced by the total annual cost of capital is equal to the economic value added.
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) A specific set of procedures that produces a decision
A)Differential cost
B)Keep-or-drop decision
C)Constraints
D)Decision-making model
E)Split-off point
F)Joint products
G)Make-or-buy decision
H)Target costing
I)Sunk costs
J)Markup
K)Special-order decision
L)Sell-or-process-further decision
M)Relevant costs
N)Opportunity cost
O)Cost-based pricing
Q2) Irrelevant costs are costs that vary across alternatives.
A)True
B)False
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Page 15
Chapter 14: Capital Investment Decisions
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151 Verified Questions
151 Flashcards
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Sample Questions
Q1) Which model of capital investment decision making is most widely used? Why?
Q2) When investing in automated systems, which intangible or indirect benefits is important to consider?
A) reduced lead time
B) decreased market share
C) increased support labour cost
D) decreased customer satisfaction
Q3) Refer to Boleyn Company. Which of the two projects, A or B, has a higher internal rate of return?
A) Project A with an IRR of 10%
B) Project B with an IRR of 10%
C) Project A with an IRR of 14%
D) Project B with an IRR of 14%
Q4) What term refers to the interest rate that sets the present value of a project's cash inflows equal to the present value of the project's cost?
A) the present value
B) the discount rate
C) the payback period
D) the internal rate of return
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