Course Introduction
Managerial Accounting Study Guide Questions
Managerial Accounting focuses on the use of accounting information by managers within organizations to inform decision-making, planning, and control. This course introduces fundamental concepts such as cost behavior, budgeting, performance evaluation, and variance analysis. Students will learn how to analyze financial data, prepare relevant reports, and utilize various managerial tools to support strategic and operational objectives. Emphasis is placed on real-world applications and ethical considerations, enabling students to contribute effectively to the financial health and efficiency of organizations.
Recommended Textbook Management Accounting 6th Edition by Anthony
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11 Chapters
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A. Atkinson
Page 2
Chapter 1: How Management Accounting Information Supports Decision
Making
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Sample Questions
Q1) A weekly report comparing machine time used to available machine time is information LEAST useful to:
A)a front-line employee.
B)the manager of operations.
C)the chief executive officer.
D)the accounting department.
Answer: C
Q2) Which of the following types of information are used in management accounting?
A)financial information
B)nonfinancial information
C)information focused on the long term
D)All of the above are correct.
Answer: D
Q3) Nonfinancial information might be used for all of the following except:
A)improve product quality.
B)reduce cycle times.
C)satisfy customers' needs.
D)All of the above are used.
Answer: D
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Chapter 2: The Balanced Scorecard and Strategy Map
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Sample Questions
Q1) Nonprofit and government organizations generally place an objective related to their social impact and mission at the top of their scorecard and strategy map.
A)True
B)False
Answer: True
Q2) Manufacturing cycle efficiency is an example of a Balanced Scorecard's measure of the:
A)process perspective.
B)customer perspective.
C)learning and growth perspective.
D)financial perspective.
Answer: A
Q3) Managers for the learning and growth perspective of the Balanced Scorecard must invest in all of the following EXCEPT:
A)improve asset utilization.
B)improving the skills of their employees.
C)enhancing information technology and systems.
D)aligning employees to the company's objectives.
Answer: A
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Page 4
Chapter 3: Using Costs in Decision Making
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Sample Questions
Q1) Fixed costs:
A)may be either direct or indirect costs.
B)vary with production or sales volume.
C)include parts and materials used to manufacture a product.
D)can be adjusted in the short run to meet actual demands.
Answer: A
Q2) Assuming Product R2D2 is discontinued and the space formerly used to produce the product is rented for $6,000 per year,operating income will:
A)increase by $3,300.
B)increase by $4,500.
C)increase by $6,000.
D)increase by $7,200.
Answer: B
Q3) Which of the following describes a variable cost?
A)Variable cost are always indirect costs.
B)Variable costs increase in total when the actual level of activity increases.
C)Variable costs include most personnel costs and depreciation on machinery.
D)Variable costs can always be traced directly to the cost object.
Answer: B
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Page 5
Chapter 4: Accumulating and Assigning Costs to Products
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Sample Questions
Q1) A cost that depends on the amount of resource that is used is referred to as a A)fixed cost.
B)variable cost.
C)direct cost.
D)indirect cost.
Q2) In a job order costing system,explain why it is necessary to apply overhead costs to production through the use of a predetermined activity cost driver rate.
Q3) What are the total manufacturing costs of Job #316?
A)$715
B)$880
C)$1,595
D)$1,000
Q4) The estimated manufacturing overhead cost assigned to this order totals:
A)$30,000.
B)$40,000.
C)$80,000.
D)$115,000.
Q5) Costing system distortions relate to the handling of indirect costs.
A)True
B)False
6
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Chapter 5: Activity-Based Cost Systems
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Sample Questions
Q1) Product lines that produce different variations (models,styles,or colors)often require specialized activities that translate into lower overhead costs for each product line.
A)True
B)False
Q2) When a company manufactures a variety of complex products,several unit-level cost drivers can capture the complexity and diversity of the production processes:
A)always.
B)frequently.
C)infrequently.
D)never.
Q3) The best cost estimate for resources required to handle production runs is developed by using ________ as the denominator for activity cost driver calculations.
A)actual driver quantities of actual production runs
B)estimated driver quantities of estimated production runs
C)available capacity
D)practical capacity
Q4) Discuss the advantages of a time-based ABC system.
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Chapter 6: Measuring and Managing Customer Relationships
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Sample Questions
Q1) Marketing,selling,distribution,and administrative expenses:
A)can be traced through causal relationships to products.
B)are independent of volume and product mix.
C)are usually incurred through a single distribution channel.
D)do not work well with activity based costing.
Q2) Low cost to serve customers:
A)have low order quantities.
B)have large amounts of post sales support.
C)order standard products.
D)have customized delivery.
Q3) Compare the 80-20 rule and the whale curve as it relates to customer profitability.
Q4) Discuss the 80-20 rule and the 40-1 rule.
Q5) Companies should avoid high cost-to-serve customers because they are unprofitable.
A)True
B)False
Q6) Describe the pricing waterfall.
Page 8
Q7) Compare and contrast a typical salesperson's revenue based compensation plan to a compensation plan based on customer profits.
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Chapter 7: Measuring and Managing Process Performance
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Sample Questions
Q1) Kaizen costing includes:
A)cost control system concept.
B)standards set annually or semiannually.
C)continuous improvement.
D)comparing actual costs to standard costs.
Q2) The buildup of inventories decreases the cycle time of production.
A)True
B)False
Q3) The theory of constraints focuses on long-term initiatives to increase operating income.
A)True
B)False
Q4) After the change,sales are projected to increase because:
A)of shorter delivery lead times.
B)of higher sales prices.
C)of the ability to process larger batch sizes.
D)All of the above are correct.
Q5) Explain the differences between a process layout,a product layout,and cellular manufacturing.
Q6) Discuss cost reductions that can result from reducing work-in-process inventory.
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Chapter 8: Measuring and Managing Life-Cycle Costs
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Sample Questions
Q1) Which of the following could be used to measure the objective of reducing product development cycle time?
A)potential value of projects in the project pipeline
B)number of new projects launched based on customer input
C)number of projects delivered on time
D)number of failures or returns of new products from customers
Q2) Lance Allot,vice-president of Arthur Industries,a computer manufacturer in England,has been trying to figure out whether one of his branch managers,Ms.Gwen,has been achieving the company-wide return on sales target of 20 percent.Mr.Allot has just been given data from his new target costing system regarding Ms.Gwen's operations.Ms.Gwen's estimated target sales volume is 30,000 computers with a target-selling price of $1,000.The data also show that Ms.Gwen's unit target cost is $750 per unit.
Required:
a.Help Mr.Allot determine whether Ms.Gwen's return on sales target has been met.
b.Has Ms.Gwen done a good or a poor job? Explain.
Q3) Suppliers play a key role in the success of target costing.
A)True
B)False
Q4) What is environmental costing?
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Chapter 9: Behavioral and Organizational Issues in Management Accounting and Control Systems
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Sample Questions
Q1) Incentive compensation is MOST suited to:
A)all centralized organizations.
B)centralized organizations where the employees are skilled and empowered.
C)all decentralized organizations.
D)decentralized organizations where the employees are skilled and empowered to react to conditions and make decisions.
Q2) How does the human resource model of motivation differ from the scientific management school?
Q3) The key attribute of intrinsic rewards for compensation is that they:
A)have a well-defined monetary value.
B)are provided by one person to another.
C)are common across individuals in a given situation.
D)come from inside the individual.
Q4) Information is relevant in a MACS if:
A)it can be applied in a flexible manner.
B)it is inaccurate.
C)it is inconsistent.
D)it is late.
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Q5) Describe some of the drawbacks of using the operating budget as a control device.
Chapter 10: Using Budgets for Planning and Coordination
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Sample Questions
Q1) The usual starting point in budgeting is to make a forecast of production.
A)True
B)False
Q2) Budgets can play both planning and control roles for management.
A)True
B)False
Q3) Describe the benefits to an organization of preparing an operating budget.
Q4) Financial budgets include the:
A)capital spending plan.
B)production plan.
C)labor hiring and training plan.
D)expected cash flow statement.
Q5) Assume only the specified parameters change in a sensitivity analysis.If the contribution margin increases by $10 per unit then operating profits will:
A)also increase by $10 per unit.
B)increase by less than $10 per unit.
C)decrease by $10 per unit.
D)be indeterminable.
Q6) Describe some of the drawbacks of using the operating budget as a control device.
12
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Chapter 11: Financial Control
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Sample Questions
Q1) Conventional segment margin income statements clearly capture the interactive effects among responsibility centers.
A)True
B)False
Q2) The amount of decentralization in an organization reflects the organization's trust in its employees and other factors.
A)True
B)False
Q3) All of the following are true of cost-based transfer prices EXCEPT that they:
A)provide no incentive to the supplying division to control costs when actual costs are used.
B)may use standard costs to help maintain operating efficiency.
C)promote the optimal level of transactions for the overall organization.
D)don't give proper guidance when operating capacity is constrained.
Q4) The performance measures chosen should influence the employees' decision-making behavior.
A)True
B)False
Q5) What types of revenues and costs are used to calculate segment margin?
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