Managerial Accounting Test Preparation
Course Introduction
Managerial Accounting focuses on the use of accounting information for internal planning, decision-making, and control within organizations. The course covers key topics such as cost behavior, budgeting, performance evaluation, and the analysis of financial and non-financial data to support management strategies. Students will learn techniques for cost allocation, variance analysis, and the creation of managerial reports, developing skills to interpret accounting data and contribute to effective business operations. Emphasis is placed on practical applications and ethical considerations in managerial accounting contexts.
Recommended Textbook
Managerial Accounting An Introduction to Concepts Methods and Uses 11th Edition by Michael W.
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13 Chapters
1638 Verified Questions
1638 Flashcards
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Chapter 1: Fundamental Concepts
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114 Verified Questions
114 Flashcards
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Sample Questions
Q1) All of the following are true regarding integrated information systems except:
A)Accounting and other databases can be integrated with numerous applications such as managing the supply chain,making general ledger entries,and reporting to top management.
B)Integrated information systems imply that accountants no longer control a particular information domain.
C)Accountants are no longer the source of accounting information because managers and staff can directly access accounting information in integrated information systems.
D)Because accountants are no longer needed in an integrated information system environment,they typically do not serve on cross-functional teams.
Answer: D
Q2) Which of the following is most likely to be a fixed cost for a company?
A)Sales commissions.
B)Depreciation on factory equipment
C)The cost of materials used in production.
D)The cost of shipping finished goods.
Answer: B
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Chapter 2: Measuring Product Costs
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) Which costing system uses equivalent units in the computation of costs?
A)Job costing
B)Process costing
C)Both a and b
D)Neither a nor b
Answer: B
Q2) Actual costing does notuse which of the following to measures product costs?
A)Actual direct material costs
B)Actual direct labor costs
C)An amount representing "normal" manufacturing overhead
D)Actual manufacturing overhead
Answer: C
Q3) Which costing methodology derives a rate for applying overhead to units produced before the production period,then uses this "predetermined rate" in applying overhead to each unit as they produces it?
A)Normal costing
B)Actual costing
C)Predetermined costing
D)Imputed production costing
Answer: A
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Chapter 3: Activity-Based Management
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139 Verified Questions
139 Flashcards
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Sample Questions
Q1) Which of the following are not examples of non-value-added costs?
A)Storage
B)Moving items
C)Waiting for work
D)Production
Answer: D
Q2) In traditional costing systems overhead costs are allocated on volume of production or sales,.This methodology fails to take into consideration that the demand for overhead activities is also driven by which of the following?
A)Outside contracting activities.
B)Indirect labor activities.
C)Short-term labor activities.
D)Batch-related and product-sustaining activities.
Answer: D
Q3) Which of the following is an example of non-value added activities?
A)Storage.
B)Moving items.
C)Waiting for work.
D)All of the answers are correct.
Answer: D
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Chapter 4: Strategic Management of Costs,quality,and Time
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146 Verified Questions
146 Flashcards
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Sample Questions
Q1) Which of the following is not an example of prevention costs?
A)Quality training
B)End-process sampling
C)Statistical process control
D)Designing production processes
Q2) Response time improvements often drive simultaneous improvements in
A)economy and efficiency.
B)economy and effectiveness.
C)quality and productivity.
D)quantity and efficiency.
Q3) Which of the following is a tool in quality control that defines the effect and list events that may be the cause of the problem?
A)cause-and-effect analyses.
B)Pareto charts.
C)control charts.
D)PERT charts.
Q4) How can activity-based management reduce customer response time?
Q5) How do firms use the balanced scorecard to measure performance?
Q7) Why is time important in a competitive environment? Page 6
Q6) Compare the costs of quality control to the costs of failing to control quality.
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Page 7
Chapter 5: Cost Drivers and Cost Behavior
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114 Flashcards
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Sample Questions
Q1) Which of the following statements is true concerning discretionary costs?
A)Discretionary costs cannot be avoided in the short run.
B)Discretionary costs are usually essential for achieving long-run goals.
C)Discretionary costs include payments to government agencies.
D)All of the answers are correct.
Q2) What does the experience curve function show?
A)The amount of time required to perform a task goes up per unit as the number of units increases.
B)The amount of time required to perform a task goes up per unit as the number of units decreases.
C)The amount of time required to perform a task goes down per unit as the number of units increases.
D)The amount of time required to perform a task goes down per unit as the number of units decreases.
Q3) Which statement is true concerning semi-variable costs?
A)Semi-variable costs contain both fixed and random components.
B)Semi-variable costs contain both random and variable components.
C)Semi-variable costs contain both fixed and variable components.
D)Semi-variable costs contain either fixed or variable components.
Q4) Identify capacity costs,committed costs,and discretionary costs.
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Chapter 6: Financial Modeling for Short-Term Decision Making
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120 Verified Questions
120 Flashcards
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Sample Questions
Q1) Break-even and target profits;volume defined in sales dollars.The manager of Hsu's Carryout Express estimates operating costs for the year will total $230,000 for fixed costs.
Required:
a.Find the break-even point in sales dollars with a contribution margin ratio of 40 percent.
b.Find the break-even point in sales dollars with a contribution margin ratio of 20 percent.
c.Find the sales dollars required with a contribution margin ratio of 50 percent to generate a profit of $150,000.
(Hsu's Carryout Express;break-even and target profits;volume defined in sales dollars. )
Q2) What enables analysts to test the interaction of economic variables in a variety of settings?
A)A benchmark
B)A PERT chart
C)The value chain
D)A financial model
Q3) Explain the use of financial modeling in a multiple product setting.
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Page 9
Chapter 7: Differential Cost Analysis for Operating Decisions
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186 Verified Questions
186 Flashcards
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Sample Questions
Q1) Just-in-time is
A)a method of managing production by which the firm attempts to produce each item only as needed for the next step in the production process.
B)a method of managing purchasing by which the firm attempts to time purchases so that items arrive just in time for sale.
C)a practice that can reduce inventory levels to virtually zero.
D)All of the answers are correct.
Q2) Factors underlying make-or-buy decisions include non-quantitative factors,such as
A)dependability of suppliers and the quality of purchased materials.
B)dependability of suppliers and the quantity of purchased materials.
C)dependability of employees and the quality of manufactured materials.
D)dependability of employees and the quantity of purchased materials.
Q3) Which statement is true with regards to the product lifecycle?
A)The product life cycle is usually 10 to 20 years.
B)Life-cycle costs should never been considered in short run pricing decisions.
C)Life-cycle costs provide important information for pricing.
D)Life-cycle costs are not relevant in differential analysis.
Q4) Explain how linear programming optimizes the use of scarce resources.
Page 10
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Chapter 8: Capital Expenditure Decisions
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126 Flashcards
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Sample Questions
Q1) What is a general type of long-term capital investment that companies make?
A)replacement and minor improvements
B)training and development of employees
C)advertising campaigns
D)all of the above
Q2) The XYZ Company is evaluating a capital budgeting proposal for the current year.The initial investment would be $50,000.It would be depreciated on a straight-line basis over five years with no salvage value.The before-tax annual cash inflow due to this investment is $5,000,and the income tax rate is 40 percent paid in the same year as incurred.The desired after-tax rate of return is 15 percent.All cash flows occur at year-end. What is the net present value of XYZ's capital-budgeting proposal? Should the proposal be accepted?
Q3) Explain how spreadsheets help the analyst to conduct sensitivity analyses of capital budgeting.
Q4) Explain why analysts will need more than cash flow analysis to justify or reject an investment.
Q5) Discuss the advantages of using spreadsheets including sensitivity analysis.
Q6) How does depreciation affect investment decisions?
Q7) Why does the capital investment process require audits?
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Chapter 9: Profit Planning and Budgeting
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126 Flashcards
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Sample Questions
Q1) Solving for budgeted manufacturing costs.Cooke Company expects to sell 5 million cases of paper towels during the current year.Budgeted costs per case are $20 for direct materials,$16 for direct labor,and $4 (all variable)for manufacturing overhead.Cooke began the period with 50,000 cases of finished goods on hand and wants to end the period with 30,000 cases of finished goods on hand.
Required:
Compute the budgeted manufacturing costs of the Cooke Company for the current period.Assume no beginning or ending inventory of work-in-process. (Cooke Company;solving for budgeted manufacturing costs. )
Q2) How is the budget used for performance evaluation?
Q3) Which of the following statements is true concerning the operating budget?
A)The operating budget is a formal short-run plan of action.
B)The operating budget identifies capital projects.
C)The operating budget states the strategy for achieving organizational goals.
D)all of the above.
Q4) Describe ethical dilemmas in budgeting.
Q5) How is a budget a tool for planning and performance evaluation?
Q6) Compare the four types of responsibility centers.
Q7) Describe the master budget.
Page 12
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Chapter 10: Profit and Cost Center Performance Evaluation
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) How are fixed manufacturing costs treated for managerial and external reporting purposes?
Q2) When substituting computerized equipment for direct labor,variable overhead may be associated more with
A)labor hours than machine usage.
B)machine usage than labor hours.
C)machine usage than direct materials.
D)machine usage than manufacturing overhead.
Q3) Which of the following might cause a materials variance?
A)Failing to take purchase discounts.
B)Using a better grade of raw material.
C)Changes in the market supply for the raw materials.
D)All of the above.
Q4) How do you apply activity-based costing to variance analysis?
Q5) When substituting computerized equipment for direct labor,a firm should treat labor as which of the following?
A)Fixed (or capacity)costs.
B)Mixed costs.
C)Opportunity costs.
D)Variable costs.
13
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Chapter 11: Investment Center Performance Evaluation
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Sample Questions
Q1) Transfer prices are the prices charged
A)for distributing goods from one warehouse to another.
B)for the goods produced by one division to another division that needs those goods.
C)when delivering goods to the customer.
D)when transferring goods to international divisions.
Q2) Which statement is true concerning negotiated transfer pricing?
A)It preserves the autonomy of the division managers.
B)It does not preserve the autonomy of the division managers.
C)It violates generally accepted accounting principles.
D)It is the same as centrally administered transfer pricing.
Q3) Which of the following is(are)the transfer price that would leave the selling division no worse off if the good is sold to an internal division?
A)The negotiated transfer price.
B)The minimum transfer price.
C)The maximum transfer price.
D)Both a.and c.
Q4) What is the purpose of the return on investment (ROI)calculation and what are its shortcomings?
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Chapter 12: Incentive Issues
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123 Flashcards
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Sample Questions
Q1) Why do managers often have incentives for committing financial fraud?
A)Bonuses,merit pay increases,and promotions often depend on reported accounting numbers.
B)Managers given a long-term perspective by their employment and pay arrangements will have an incentive to "manager earnings."
C)Bonuses,merit pay increases,and promotions often depend on reported accounting numbers,and managers given a long-term perspective by their employment and pay arrangements will have an incentive to "manager earnings."
D)None of the answers is correct.
Q2) Which of these is an advantage for companies to award managerial performance based on a subjective approach?
A)The subjective approach considers factors not explicitly captured in the formula approach.
B)Managers know what reward they will get if they achieve expectations.
C)Managers who do not fully trust their superiors tend to prefer this approach.
D)All of the answers are correct.
Q3) Define the two most common types of fraud and discuss their impact on financial statements.Also discuss incentives for managers to commit financial fraud.
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Chapter 13: Allocating Costs to Responsibility Centers
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Sample Questions
Q1) How is activity-based costing used to allocate service department costs?
Q2) Marketing and administrative costs are allocated to departments for purposes of performance evaluation using techniques
A)similar to those employed in allocating service department costs.
B)different than those employed in allocating service department costs.
C)similar to those employed in allocating production department costs.
D)different than those employed in allocating common department costs.
Q3) Pricing and bidding,contract cost reimbursement,and motivation are reasons for
A)allocating common costs to departments and products.
B)allocating common costs to service departments,only.
C)not allocating common costs to departments and products.
D)not allocating common costs to production departments.
Q4) The products that result from processing a common input in the forest products,oil and gas,chemicals and mining industries are called
A)natural products.
B)common products.
C)joint products.
D)environmentally-sound products.
Q5) How are service department costs allocated to production departments?
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