Managerial Accounting Pre-Test Questions
Course
Introduction
Managerial Accounting focuses on the internal use of accounting information by managers within organizations to inform decision-making, planning, and control. The course covers key concepts such as cost behavior, budgeting, performance evaluation, and cost-volume-profit analysis. Students learn how to analyze financial data and prepare reports that aid in setting objectives, measuring organizational performance, and making strategic decisions. Through case studies and practical examples, the course emphasizes the role of accounting in supporting management functions and improving operational efficiency.
Recommended Textbook
Introduction to Managerial Accounting 8th Edition by Peter Brewer
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21 Chapters
4046 Verified Questions
4046 Flashcards
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Page 2
Chapter 1: Managerial Accounting and Cost Concepts
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299 Verified Questions
299 Flashcards
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Sample Questions
Q1) Factory overhead is typically a(n):
A)mixed cost.
B)fixed cost.
C)variable cost.
D)irrelevant cost.
Answer: A
Q2) Advertising is not a considered a product cost even if it promotes a specific product.
A)True
B)False
Answer: True
Q3) If 3,000 units are produced, the total amount of direct manufacturing cost incurred is closest to:
A)$30,150
B)$34,350
C)$42,150
D)$34,650
Answer: A
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Chapter 2: Job-Order Costing: Calculating Unit Product Costs
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Sample Questions
Q1) Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 50% on manufacturing cost to establish selling prices.The calculated selling price for Job A is closest to:
A)$90,707
B)$27,487
C)$82,461
D)$54,974
Answer: C
Q2) The amount of overhead applied in the Machining Department to Job T272 is closest to:
A)$137,600.00
B)$126.00
C)$516.00
D)$564.00
Answer: C
Q3) In absorption costing, nonmanufacturing costs are assigned to units of product. A)True
B)False
Answer: False
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Chapter 3: Job-Order Costing: Cost Flows and External Reporting
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256 Verified Questions
256 Flashcards
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Sample Questions
Q1) The manufacturing overhead for the year was:
A)$6,000 overapplied
B)$10,000 overapplied
C)$10,000 underapplied
D)$4,000 underapplied
Answer: A
Q2) Bayest Manufacturing Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs.Last year, the Corporation worked 56,000 actual direct labor-hours and incurred $352,000 of actual manufacturing overhead cost.The Corporation had estimated that it would work 60,000 direct labor-hours during the year and incur $330,000 of manufacturing overhead cost.The Corporation's manufacturing overhead cost for the year was:
A)overapplied by $44,000
B)underapplied by $44,000
C)overapplied by $22,000
D)underapplied by $22,000
Answer: B
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Chapter 4: Activity-Based Costing
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Sample Questions
Q1) Which of the following would probably be the most accurate measure of activity to use for allocating the costs associated with a factory's purchasing department?
A)Machine-hours
B)Direct labor-hours
C)Number of orders processed
D)Cost of materials purchased
Q2) The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to:
A)$179.36 per DLH
B)$1,981.16 per DLH
C)$134.52 per DLH
D)$45.78 per DLH
Q3) The activity rate for the Machine Setups activity cost pool under activity-based costing is closest to:
A)$203.26 per setup
B)$190.55 per setup
C)$122.97 per setup
D)$33.70 per setup
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Chapter 5: Process Costing6 Cost-Volume-Profit Relationships
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139 Flashcards
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Sample Questions
Q1) Under the weighted-average method, the cost of ending work in process inventory is determined by dividing the equivalent units of production for ending inventory by the cost per equivalent unit for each cost category and then summing the result.
A)True
B)False
Q2) When computing the cost per equivalent unit, it is necessary to consider the percentage completion of the units in beginning inventory under the weighted-average method.
A)True
B)False
Q3) The total cost transferred from the first processing department to the next processing department during the month is closest to:
A)$202,600
B)$193,300
C)$175,246
D)$218,290
Q4) In a process costing system, costs are traced directly to jobs.
A)True
B)False
7
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Chapter 6: Cost-Volume-Profit Relationships
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Sample Questions
Q1) What is the company's break-even point in sales dollars?
A)$450,000
B)$180,000
C)$300,000
D)$500,000
Q2) A company makes a single product that it sells for $16 per unit.Fixed costs are $76,800 per month and the product has a contribution margin ratio of 40%.If the company's actual sales are $224,000, its margin of safety is:
A)$32,000
B)$96,000
C)$128,000
D)$192,000
Q3) How many units would the company have to sell in order to have a net operating income equal to 5% of total sales dollars?
A)18,000 units
B)20,000 units
C)15,333 units
D)14,286 units
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Chapter 7: Variable Costing and Segment Reporting: Tools for Management
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291 Verified Questions
291 Flashcards
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Sample Questions
Q1) What is the total period cost for the month under the absorption costing?
A)$93,100
B)$133,100
C)$40,000
D)$73,500
Q2) Miscavage Corporation has two divisions: the Beta Division and the Alpha Division.The Beta Division has sales of $580,000, variable expenses of $301,600, and traceable fixed expenses of $186,500.The Alpha Division has sales of $510,000, variable expenses of $178,500, and traceable fixed expenses of $222,100.The total amount of common fixed expenses not traceable to the individual divisions is $235,500.What is the company's net operating income?
A)$374,400
B)$201,300
C)$609,900
D)($34,200)
Q3) The company's overall break-even sales is closest to:
A)$398,837
B)$288,296
C)$488,153
D)$89,316
Page 9
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Chapter 8: Master Budgeting
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236 Flashcards
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Sample Questions
Q1) Arciba Inc.bases its manufacturing overhead budget on budgeted direct labor-hours.The direct labor budget indicates that 7,400 direct labor-hours will be required in January.The variable overhead rate is $9.50 per direct labor-hour.The company's budgeted fixed manufacturing overhead is $130,980 per month, which includes depreciation of $10,360.All other fixed manufacturing overhead costs represent current cash flows.The company recomputes its predetermined overhead rate every month.The predetermined overhead rate for January should be:
A)$27.20
B)$25.80
C)$17.70
D)$9.50
Q2) The estimated selling and administrative expense for February is closest to:
A)$70,000
B)$58,680
C)$88,020
D)$18,020
Q3) The direct labor budget begins with the required production in units from the production budget.
A)True
B)False
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Chapter 10: Performance Measurement in Decentralized Organizations
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180 Flashcards
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Sample Questions
Q1) The throughput time was:
A)30.6 hours
B)3.2 hours
C)27.4 hours
D)12.3 hours
Q2) The division's return on investment (ROI)is closest to:
A)7.3%
B)23.8%
C)31.3%
D)3.0%
Q3) The ROI for this year's investment opportunity considered alone is closest to:
A)7.0%
B)21.2%
C)12.6%
D)72.0%
Q4) A manager would generally like to see a trend indicating a decrease in setup time. A)True
B)False
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Chapter 11: Differential Analysis: The Key to Decision Making
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Sample Questions
Q1) If management decides to buy part U98 from the outside supplier rather than to continue making the part, what would be the annual financial advantage (disadvantage)?
A)($30,800)
B)$25,200
C)$30,800
D)($25,200)
Q2) An avoidable fixed production cost incurred before the split-off point in a joint process is relevant in a sell or process further decision.
A)True
B)False
Q3) What is the financial advantage (disadvantage)for the company of processing Product Y beyond the split-off point?
A)$9,600
B)$2,400
C)$33,600
D)$26,400
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12
Chapter 12: Capital Budgeting Decisions
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179 Flashcards
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Sample Questions
Q1) The net present value of Project A is:
A)$51,000
B)$60,120
C)$55,560
D)$94,450
Q2) When computing the project profitability index of an investment project, the investment required should exclude any investment made in working capital at the beginning of the project.
A)True
B)False
Q3) (Ignore income taxes in this problem.)Chipps Corporation uses a discount rate of 9% in its capital budgeting.Management is considering an investment in telecommunications equipment with a useful life of 5 years.Excluding the salvage value of the equipment, the net present value of the investment in the equipment is -$530,985. Required:
How large would the salvage value of the telecommunications equipment have to be to make the investment in the telecommunications equipment financially attractive?
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13
Chapter 9: Flexible Budgets Standard Costs and Variance Analysis
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Sample Questions
Q1) The net operating income in the planning budget for May would be closest to:
A)$3,905
B)$3,883
C)$8,844
D)$8,920
Q2) The facility expenses in the flexible budget for January would be closest to:
A)$14,157
B)$14,712
C)$15,170
D)$15,062
Q3) The variable overhead rate variance for the month is closest to:
A)$480 F
B)$480 U
C)$476 U
D)$476 F
Q4) The variable overhead efficiency variance for July is:
A)$380 F
B)$399 U
C)$380 U
D)$399 F
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Chapter 13: Statement of Cash Flows
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Sample Questions
Q1) The net cash provided by (used in)financing activities for the year was:
A)$(22)
B)$3
C)$4
D)$(15)
Q2) The free cash flow for the year was:
A)$(8)
B)$14
C)$128
D)$308
Q3) Based solely on the information above, the net cash provided by (used in)investing activities on the statement of cash flows would be:
A)$(280,000)
B)$(390,000)
C)$(760,000)
D)$(1,286,000)
Q4) Negative free cash flow does not automatically signal poor performance.
A)True
B)False
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Chapter 14: Financial Statement Analysis
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Sample Questions
Q1) As the inventory turnover increases, the average sales period decreases.
A)True
B)False
Q2) The company's operating cycle for Year 2 is closest to:
A)66.2 days
B)16.5 days
C)95.3 days
D)45.6 days
Q3) Issuing common stock will decrease a company's financial leverage.
A)True
B)False
Q4) The company's return on equity for Year 2 is closest to:
A)5.60%
B)4.09%
C)2.66%
D)68.28%
Q5) Purchasing marketable securities with cash will have no effect on a company's acid-test ratio.
A)True
B)False
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Chapter 15: Job-Order Costing: Cost Flows and External Reporting
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Sample Questions
Q1) In the Excel, or spreadsheet, approach to recording financial transactions, direct labor paid in cash is recorded as a decrease in the Cash column and as an increase in the Work in Process column.
A)True
B)False
Q2) In the Excel, or spreadsheet, approach to recording financial transactions, the Manufacturing Overhead account is used to record two things-all actual overhead expenses and the amount of manufacturing overhead applied to production using the predetermined overhead rate.
A)True
B)False
Q3) In the Excel, or spreadsheet, approach to recording financial transactions, the cost of goods sold is recorded as a decrease in the Finished Goods column and as a decrease in the Retained Earnings column.
A)True
B)False
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Chapter 16: Process Costing6 Cost-Volume-Profit
Relationships
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Sample Questions
Q1) The cost per equivalent unit for conversion costs will always be the same under both the FIFO and the weighted-average methods if there is no beginning work in process inventory.
A)True
B)False
Q2) The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to:
A)$51,115
B)$46,770
C)$93,540
D)$60,801
Q3) The cost per equivalent unit for materials for the month in the first processing department is closest to:
A)$16.36
B)$14.38
C)$16.62
D)$15.01
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Page 18
Chapter 17: Cost-Volume-Profit Relationships
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Sample Questions
Q1) Using the high-low method, the estimate of the fixed component of inspection cost per month is closest to:
A)$10,344
B)$10,441
C)$3,852
D)$10,176
Q2) Using the high-low method, the fixed portion of the electrical cost each month would be:
A)$400
B)$760
C)$280
D)$190
Q3) Using the least-squares regression method, the estimate of the fixed component of maintenance cost per month is closest to:
A)$5,139
B)$2,806
C)$4,973
D)$2,738
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19
Chapter 18:Flexible Budgets, Standard Costs, and Variance Analysis
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Sample Questions
Q1) The variable component of the predetermined overhead rate is closest to:
A)$0.44 per machine-hour
B)$1.29 per machine-hour
C)$0.33 per machine-hour
D)$0.76 per machine-hour
Q2) The total manufacturing overhead is underapplied or overapplied by how much?
A)$32,123 Underapplied
B)$27,454 Overapplied
C)$27,454 Underapplied
D)$32,123 Overapplied
Q3) If the standard hours allowed for the actual output of the period is greater than the denominator level of activity (in hours), then the overhead volume variance will be favorable.
A)True
B)False
Q4) The fixed manufacturing overhead budget variance for the period is closest to:
A)$2,440 F
B)$1,200 U
C)$1,999 U
D)$704 F
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Chapter 19: Flexible Budgets, Standard Costs, and Variance Analysis
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Sample Questions
Q1) When recording the raw materials used in production in transaction (b)above, the Work in Process inventory account will increase (decrease)by:
A)$101,200
B)($101,200)
C)$101,750
D)($101,750)
Q2) When the fixed manufacturing overhead cost is recorded, which of the following entries will be made?
A)$94,080 in the FOH Volume Variance column
B)($94,080)in the FOH Budget Variance column
C)$94,080 in the FOH Budget Variance column
D)($94,080)in the FOH Volume Variance column
Q3) The ending balance in the Finished Goods account will be closest to:
A)$32,220
B)$810,870
C)$96,660
D)$804,830
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21
Chapter 20: A Capital Budgeting Decisions
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Sample Questions
Q1) (Ignore income taxes in this problem.)In order to receive $12,000 at the end of three years and $10,000 at the end of five years, how much must be invested now if you can earn 14% rate of return?
A)$12,978
B)$8,100
C)$13,290
D)$32,054
Q2) Suppose an investment has cash inflows of R dollars at the end of each year for two years.The present value of these cash inflows using a 12% discount rate will be:
A)greater than under a 10% discount rate.
B)less than under a 10% discount rate.
C)equal to that under a 10% discount rate.
D)sometimes greater than under a 10% discount rate and sometimes less; it depends on R.
Q3) The present value of an amount to be received in five years is exactly twice as large as the present value of an equal amount to be received in ten years.
A)True
B)False
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Chapter 21: A Statement of Cash Flows
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Sample Questions
Q1) During the year the balance in the Accounts Receivable account increased by $6,000.In order to adjust the company's net income to a cash basis using the direct method on the statement of cash flows, it would be necessary to:
A)subtract the $6,000 from the sales revenue reported on the income statement.
B)add the $6,000 to the sales revenue reported on the income statement.
C)subtract the $6,000 from the cost of goods sold reported on the income statement.
D)add the $6,000 to the cost of goods sold reported on the income statement.
Q2) On the statement of cash flows, the cost of goods sold adjusted to a cash basis would be:
A)$546,000
B)$536,000
C)$544,000
D)$540,000
Q3) The net cash provided by (used in)investing activities for the year was:
A)$57
B)$(57)
C)$33
D)$(33)
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