Managerial Accounting Practice Questions - 2681 Verified Questions
Managerial Accounting Practice Questions
Course Introduction
Managerial Accounting focuses on the use of accounting information for internal decision-making within organizations. The course covers concepts such as cost behavior, budgeting, variance analysis, performance evaluation, and the use of accounting data to aid planning and control. Students learn how managers interpret financial and non-financial information, allocate resources efficiently, and make strategic decisions to achieve organizational objectives. Emphasis is placed on analytical techniques and the application of accounting tools to solve real-world business challenges.
Recommended Textbook
Managerial Accounting 2nd Canadian Edition by Karen W. Braun
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12 Chapters
2681 Verified Questions
2681 Flashcards
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Page 2
Chapter 1: Introduction to Managerial Accounting
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Sample Questions
Q1) Management accounting focuses on
A)external reporting.
B)internal reporting.
C)tax preparation.
D)auditing. Answer: B
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)Government licensing Answer: C
Q3) IFRS stands for "important financial reporting standards."
A)True
B)False Answer: False
Q4) Overseeing the company's day to day operations. Answer: D
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Chapter 2: Building Blocks of Managerial Accounting
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Sample Questions
Q1) The owner of Willy's Wonderful Burger Stand is concerned because the stand has been averaging only 3,000 burger sales per month,the stand and staff can make 6,000 burgers per month.The variable cost of each burger ( buns,meat etc)is $2.50.Monthly fixed costs are ( taxes,licenses,space rent and salaries)are $7,500.The owner (Willy Wonderful)believes he could sell 5,000 burgers per month if he cuts the sales price from $5.00 to $4.75 per burger.How much extra profit ( above the current level)would he generate if he decreased the sales price?
Q2) Paris Plastics' average fixed costs per unit will be
A)$11.50 per unit.
B)$4.00 per unit.
C)$7.50 per unit.
D)$12.00 per unit.
Answer: C
Q3) Receipt of materials is part of the firm's value chain.
A)True
B)False
Answer: True
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Chapter 3: Job Costing
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Sample Questions
Q1) If Sable Company uses direct labour cost as the allocation base,what would the allocated manufacturing overhead be for the year?
A)$642,857
B)$360,000
C)$315,000
D)$400,000
Answer: B
Q2) If Crabtree Ornaments Company Job No.650 consists of 400 units of product,the average unit cost of this job is closest to
A)$501.17.
B)$576.38.
C)$205.38.
D)$371.00.
Answer: B
Q3) Job costing is used by companies that produce large numbers of identical units of production in a continuous fashion.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Activity Based Costing
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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 plant-wide overhead rate multiplied by the actual use of the cost allocation base.
A)True
B)False
Q2) Companies that use departmental overhead rates trace direct materials and direct labour to cost objects just as in a traditional costing systems.
A)True
B)False
Q3) When calculating the total amount of manufacturing overhead to allocate to a particular job,the company would multiply each departmental overhead rate by ________ and then ________ together the allocated amounts from each department.
A)the actual amount of the departmental allocation base used by the job;add
B)the actual amount of the plant-wide allocation base used by the job;add
C)the actual amount of the departmental allocation base used by the job;multiply
D)the actual amount of the plant-wide allocation base used by the job;multiply
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Chapter 5: Process Costing
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Sample Questions
Q1) The five steps of the process costing procedure are scrambled below:
1.Assign total costs to units completed and to units in ending WIP inventory.
2.Summarize total costs to account for.
3.Compute the cost per equivalent unit.
4.Summarize the flow of physical units.
5.Compute output in terms of equivalent units. The correct order for these steps is
A)4,5,2,3,1
B)5,3,1,4,2
C)2,4,5,1,3
D)3,1,4,2,5
Q2) At the end of the year,what are the equivalent units for conversion costs for Dart Manufacturing if all manufacturing costs are added during the process?
A)3,000
B)3,800
C)2,000
D)1,800
Q3) Direct materials are usually added evenly throughout the production process. A)True B)False
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Chapter 6: Cost Behaviour
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Sample Questions
Q1) When graphing total fixed costs,the fixed cost per unit is the slope of the fixed cost line.
A)True
B)False
Q2) Which of the following is a characteristic of a variable cost?
A)Variable costs fluctuate in total with production and sales.
B)Variable costs are fixed in total.
C)Variable costs do not change in total over any range.
D)Variable costs per unit change with changes in volume.
Q3) In the equation: y = vx + f,what term represents the fixed cost component?
A)f
B)v
C)y D)vx
Q4) At Pedro Company the variable cost per unit at 300,000 units is
A)$4.00
B)$0.96
C)$0.40
D)$3.20
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Chapter 7: Cost-Volume-Profit Analysis
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Sample Questions
Q1) Wynn Technology USB drives sell for $15 per drive.Unit variable expenses total $9.The break-even sales in units is 2,000 and budgeted sales in units is 4,200.What is the margin of safety in dollars?
A)$147
B)$93,000
C)$33,000
D)$2,200
Q2) If the variable cost per unit is $30.00,the break-even in sales dollars is $64,000,and fixed costs are
$40,000,the selling price per unit is
A)$30.00.
B)$80.00.
C)$800.00.
D)$5.00.
Q3) A company's margin of safety is computed as
A)expected sales - actual sales.
B)actual sales - expected sales.
C)expected sales - sales at break-even.
D)sales at break-even - expected sales.
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Page 9
Chapter 8: Short-Term Business Decisions
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Sample Questions
Q1) In a sell or process further decision,the company should process further if the extra A)cost of processing further is the same as the extra revenue.
B)revenue from processing further is less than the extra cost.
C)cost of processing further is less than the extra revenue.
D)cost of processing further is greater than the extra revenue.
Q2) A grocery store decides to drop its health and beauty section of products because it has been unprofitable.This strategy could backfire because A)the store can readily fill the available space.
B)it has automatically saved that department's fixed costs.
C)the store's sales may suffer by not having this convenience category of products. D)variable costs are not avoidable.
Q3) Qualitative factors play an important part in make or buy decisions.
A)True
B)False
Q4) In most circumstances,all fixed costs cannot be eliminated by outsourcing a product.
A)True
B)False
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Page 10
Chapter 9: The Master Budget and Responsibility Accounting
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Sample Questions
Q1) Management by exception directs management's attention to important differences between actual and budgeted amounts.
A)True
B)False
Q2) What is the total cash received in April from April sales at Three Sisters Catering?
A)$4,800
B)$41,600
C)$39,000
D)$3,000
Q3) Which description listed below best defines "cash budget"?
A)Details as to how the company expects to go from the beginning cash balance to the Desired ending cash balance
B)A company's plan for purchases of property,plant and equipment,and other long-term assets
C)A system for evaluating the performance of each responsibility center and its manager
D)A budget that projects cash inflows and outflows and the end of period budgeted balance sheet
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Chapter 10: Flexible Budgets and Standard Costs
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Sample Questions
Q1) What is the Kid Adventures Company's sales volume variance for operating income?
A)$17,700 unfavourable
B)$76,400 unfavourable
C)$17,700 favourable
D)$76,400 favourable
Q2) The entry to allocate manufacturing overhead costs to production involves which of the following?
A)Debit to work in process inventory for the actual cost of overhead
B)Credit to work in process inventory for the standard rate of overhead times the standard quantity of the allocation base allowed for actual output
C)Debit to work in process inventory for the standard rate of overhead times the standard quantity of the allocation base allowed for actual output
D)Credit to work in process inventory for the actual cost of overhead
Q3) Which budget is based on the expected number of sales?
A)Flexible budget used for evaluating performance
B)Operating budget
C)Output budget
D)Static budget
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) What will happen to return on investment (ROI)if selling and administrative expenses decrease while everything else remains the same?
A)ROI will increase.
B)ROI will decrease.
C)ROI will not be affected.
D)We cannot determine the effect from the information provided.
Q2) Return on investment and revenue growth would be examples of
A)financial perspective.
B)customer perspective.
C)internal business perspective.
D)learning and growth perspective.
Q3) Comparing a company's achievements against best practices in the industry is called benchmarking.
A)True
B)False
Q4) What is a limitation of financial performance measurements?
A)They are not useful for benchmarking.
B)They do not motivate managers.
C)They tend to focus on long-term performance.
D)They tend to be lag indicators.
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Chapter 12: Capital Investment Decisions and the Time Value of Money
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Sample Questions
Q1) Assuming an interest rate of 6%,the present value of $16,000 received at the end of each year for 6 years would be closest to
A)$10,640.
B)$78,672.
C)$111,600.
D)$128,000.
Q2) Which term below is best described as "a measure of profitability computed by dividing the average annual operating income by the amount of the investment?"
A)Accounting rate of return
B)Discount rate
C)Internal rate of return
D)Net present value
Q3) Which term below is best described as "the length of time required to recover the cost of an investment"?
A)Time value of money
B)Capital budgeting
C)Payback period
D)Annuity
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