Managerial Accounting Solved Exam Questions
Course Introduction
Managerial Accounting provides students with essential knowledge and tools used by managers to make informed business decisions. The course explores the generation, interpretation, and application of accounting information for planning, controlling, and evaluating organizational activities. Topics include cost behavior, budgeting, performance measurement, variance analysis, and decision-making techniques such as cost-volume-profit analysis and relevant costing. Through case studies and practical exercises, students learn how managerial accounting aids in resource allocation, strategic planning, and improving operational efficiency in various business contexts.
Recommended Textbook
Cornerstones of Managerial Accounting 2nd Canadian Edition by Maryanne Mowen
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14 Chapters
2059 Verified Questions
2059 Flashcards
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Page 2
Chapter 1: Introduction to Managerial Accounting
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45 Flashcards
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Sample Questions
Q1) Which of the following employees would normally occupy a line position in a hospital?
A) the manager of the cafeteria
B) a hospital administrator
C) the chief of surgery
D) a staff nurse
Answer: C
Q2) The controller is the Chief Executive Officer of a company.
A)True
B)False Answer: False
Q3) Activity-based costing is a more detailed approach to determining the cost of goods and services.
A)True
B)False
Answer: True
Q4) Only financial accounting is governed by IASB.
A)True
B)False Answer: True
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Chapter 2: Basic Managerial Accounting Concepts
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156 Flashcards
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Sample Questions
Q1) Refer to the Figure.Suppose each set of portable speakers has a per-unit product cost of $112.What would be the cost of finished goods inventory on December 31?
A) $24,640
B) $116,480
C) $124,640
D) $141,120
Answer: B
Q2) Research and development costs would be classified as period costs.
A)True
B)False Answer: True
Q3) Refer to the Figure.What was the amount of cost of goods manufactured last month?
A) $1,250,000
B) $1,300,000
C) $1,750,000
D) $2,000,000
Answer: C
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4
Chapter 3: Cost Behaviour
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186 Flashcards
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Sample Questions
Q1) Factory supervisor's salary
A)Variable
B)Fixed Answer: B
Q2) Cost of tires
A)Variable
B)Fixed Answer: A
Q3) Using Microsoft Excel,the function INTERCEPT returns the variable rate of the independent variable.
A)True
B)False
Answer: False
Q4) Computing fixed costs per unit may result in misleading information.
A)True
B)False
Answer: True
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Chapter 4: Costvolumeprofit Analysis: a Managerial Planning Tool
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160 Flashcards
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Sample Questions
Q1) The absorption income statement provides a good check to determine if the sale of a certain number of units really results in operating income of the given amount.
A)True
B)False
Q2) To determine the number of units that must be sold to earn a target operating income,one can use the equation for operating income and replace the operating income term with the target operating income.
A)True
B)False
Q3) Refer to the Figure.What is the budgeted operating income?
A) $90,000
B) $168,000
C) $174,000
D) $342,000
Q4) To find the number of units to sell to earn a targeted income,it is quicker to simply adjust the break-even units equation by adding target income to the variable cost.
A)True
B)False
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Chapter 5: Job-Order Costing
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176 Flashcards
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Sample Questions
Q1) Which of the following is NOT on a time ticket?
A) employee's name
B) employee's wage rate
C) hours worked on each job
D) cost of materials
Q2) Which of the following types of businesses is most likely to use a process-costing system?
A) print shop
B) doctor's office
C) home building
D) petroleum
Q3) Refer to the Figure.What is the overhead variance for Rovetti?
A) $56,000 overapplied
B) $56,000 underapplied
C) $19,150 overapplied
D) $19,150 underapplied
Q4) Actual overhead is used to arrive at the cost of goods manufactured.
A)True
B)False
Q5) What are the three steps of overhead application?
Page 7
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Chapter 6: Process Costing
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Sample Questions
Q1) Assume conversion costs represent a single category.How many input categories would be typical for a department receiving transferred-in goods?
A) 2
B) 3
C) 4
D) 5
Q2) Which two methods determine the equivalent units of production in process costing?
A) weighted average and FIFO
B) FIFO and LIFO
C) actual costing and LIFO
D) weighted average and actual costing
Q3) Similar percentage completion figures for manufacturing inputs pose a problem for the calculation of equivalent units,unit cost,and valuation of ending work in process.
A)True
B)False
Q4) Costing system used by a cruise ship builder
A)Process costing
B)Job order costing
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Chapter 7: Activity-Based Costing and Management
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Sample Questions
Q1) Robustness means hitting the target value every time.
A)True
B)False
Q2) Refer to the Figure.What is the cost of unloading?
A) $50,500
B) $52,000
C) $54,000
D) $56,000
Q3) One of the three major dimensions of measuring activity performance is quality.
A)True
B)False
Q4) What is the term for the time required to produce one unit of a product?
A) efficiency
B) velocity
C) speed
D) cycle time
Q5) Costs that are caused by the inefficient performance of value-added activities are non-value-added costs.
A)True
B)False
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Chapter 8: Absorption and Variable Costing,and Inventory Management
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Sample Questions
Q1) If the number of units produced in a period is smaller than the number of units sold in period,absorption costing income will be higher than variable costing income.
A)True
B)False
Q2) Refer to the Figure.What is the segment margin of the product line?
A) $280,000
B) $325,000
C) $350,000
D) $400,000
Q3) Refer to the Figure.Assume that beginning inventory was zero.What is the value of ending inventory under variable costing?
A) $2,000
B) $3,000
C) $3,720
D) $5,000
Q4) Product cost includes all costs of the company.
A)True
B)False
Page 10
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Chapter 9: Budgeting, production, cash, and Master Budget
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Sample Questions
Q1) Budgeted sales in dollars
A)Production budget
B)Direct materials purchases budget
C)Sales budget
Q2) Refer to the Figure.What cash is budgeted to be collected on account in August?
A) $45,000
B) $54,600
C) $132,000
D) $132,600
Q3) Refer to the Figure.How much cash is paid in August for pepper purchases (rounded to the nearest dollar)?
A) $8,435
B) $8,900
C) $9,963
D) $21,088
Q4) Refer to the Figure.What is Wallen's budgeted marketing expense?
A) $39,000
B) $65,000
C) $84,000
D) $133,360
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Chapter 10: Standard Costing: a Managerial Control Tool
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Sample Questions
Q1) Kaizen means continuous improvement.
A)True
B)False
Q2) Which of the following is NOT characteristic of the use of materials variance information?
A) The production manager has the responsibility for controlling the materials price variance.
B) The production manager is generally responsible for materials usage.
C) The production manager is concerned with minimizing scrap,waste,and rework.
D) The purchasing department is responsible for acquiring quality materials.
Q3) If the target cost is less than what is currently achievable,management must find ways to reduce costs in order to attain the target cost.Describe the three cost reduction methods that are typically used.
Q4) Which of the following are sources of quantity standards?
A) historical experience
B) budget studies
C) input from interested personnel
D) benchmarks
Q5) How are standards developed?
Q6) Explain the kaizen approach to costing.
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Chapter 11: Flexible Budgets and Overhead Analysis
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Sample Questions
Q1) Budgeted variable overhead for the year is $130,000.Expected activity is 20,000 standard direct labour hours.The actual hours worked were 18,250,and the standard hours allowed for actual production were 19,750.What was the variable overhead efficiency variance?
A) $0
B) $1,500 F
C) $9,750 F
D) $12,000 F
Q2) Discuss the following statement: "As long as the total variable overhead variance is small,the managers can be assured that actual activity is proceeding as planned.No further action is necessary."
Q3) Refer to the Figure.What is the fixed overhead volume variance?
A) $8,000 U
B) $24,000 U
C) $28,000 F
D) $32,000 F
Q4) Before-the-fact flexible budgets are especially useful for comparing expected costs with actual costs.
A)True
B)False
Page 13
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Chapter 12: Performance Evaluation and Decentralization
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Sample Questions
Q1) SkyJet Airways has three divisions,the Western Division,the Eastern Division,and the Northern Division.The manager of the Western Division had wanted to purchase replacement airplanes for the division.However,he decided against it because,although revenues would increase and the new planes would be less expensive to operate,the initial cost of the planes was quite large.What centre is most probably used to account for the Western Division?
A) a cost centre
B) an investment centre
C) a profit centre
D) a revenue centre
Q2) The direct comparison of the performance of two different investment centres is difficult using residual income because residual income is an absolute measure.
A)True
B)False
Q3) Turnover is the ratio of operating income to sales.
A)True
B)False
Q4) How is EVA (economic value added)different from standard residual income calculations?
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Chapter 13: Short-Run Decision Making: Relevant Costing
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Sample Questions
Q1) Refer to the Figure.What is the contribution margin per unit of scarce resource (machine time)for Model P-4?
A) $12
B) $14
C) $24
D) $28
Q2) The Tucker Company charges cost plus 30%.What is the price of an item with cost equal to $65?
A) $12.50
B) $50.00
C) $60.00
D) $84.50
Q3) Refer to the Figure.What is the contribution margin per hour of machine time for Test A?
A) $10
B) $20
C) $40
D) $100
Q4) What are the six steps of the decision-making model?
Q5) Why does a special-order decision frequently ignore fixed factory overhead?
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Chapter 14: Capital Investment Decisions
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Sample Questions
Q1) Which payback period will managers want when the risk of obsolescence is high?
A) a shorter payback period
B) a longer payback period
C) a payback period equal to the life of the investment
D) an extended payback period
Q2) Refer to Figure 14-10.Marousis Company is considering an investment that will have an initial cost of $1,000,000 yield annual net cash inflows of $260,000.Yearly depreciation will be $200,000.The equipment is expected to be useful for five years,at which point it will be scrapped with no salvage value.Marousis requires a minimum rate of return of 10%. A. What is the accounting rate of return?
B. What is the net present value? Is the investment acceptable?
C. Now suppose that Marousis believes it can sell the equipment at the end of five years for \(\$ 100,000\). What is the net present value? Is the investment acceptable?
D. What can you say about the IRR in the first case (no salvage value) versus the IRR in the second case (\$100,000 salvage value)?
Q3) What are some reasons why firms use the payback period model in capital investment decision making?
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