Managerial Accounting Test Preparation
Course Introduction
Managerial Accounting focuses on the use of accounting information by managers within organizations to inform decision-making, planning, and control processes. The course covers key topics such as cost behavior, cost-volume-profit analysis, budgeting, performance evaluation, and the use of internal financial data for operational and strategic decisions. Students will learn how to prepare and interpret managerial reports, analyze financial data to improve efficiency, and apply accounting techniques to real-world business scenarios with the goal of enhancing organizational effectiveness.
Recommended Textbook
Horngrens Cost Accounting A Managerial Emphasis 3rd Australian Edition by Charles Horngren
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21 Chapters
3782 Verified Questions
3782 Flashcards
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Chapter 1: Management Accounting in Context
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200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/70842
Sample Questions
Q1) SWOT analysis entails:
A)an analysis of strengths,weaknesses,opportunities and threats.
B)how an organisation chooses to compete and highlights the opportunities its managers should evaluate and pursue if advantageous.
C)showing how management accounting connects with sustainability.
D)bringing relevant costs and benefits of sustainability to the attention of decision makers in the public arena,such as city councillors or government ministers.
Answer: A
Q2) Linking rewards to performance:
A)should only be based on financial information.
B)helps to motivate managers.
C)allows companies to charge premium prices.
D)All of these answers are correct.
Answer: B
Q3) The best-designed strategies are valuable whether or not they are effectively implemented.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Different Costs for Different Purposes
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324 Verified Questions
324 Flashcards
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Sample Questions
Q1) Which of the following statements is FALSE?
A)Product costs and inventoriable costs are interchangeable terms.
B)Inventoriable costs are a special case of product costs.
C)Inventoriable costs are important for GAAP.
D)'Product costs' refers to the particular costs of a product for the purpose at hand.
Answer: A
Q2) Costs expensed on the income statement in the accounting period incurred are called:
A)period costs.
B)inventoriable costs.
C)indirect costs.
D)direct costs.
Answer: A
Q3) The two most common methods of costing inventories in manufacturing companies are variable costing and fixed costing.
A)True
B)False
Answer: False
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4
Chapter 3: Determining How Costs Behave
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182 Verified Questions
182 Flashcards
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Sample Questions
Q1) Dougherty Company employs 20 individuals.Eight employees are paid $12 per hour and the rest are salaried employees paid $3000 a month.How would total costs of personnel be classified?
A)Variable
B)A variable cost within a relevant range
C)Mixed
D)A fixed cost within a relevant range
Answer: C
Q2) The cost function y = 8000 + 4X:
A)has a slope coefficient of 8000.
B)is a curved line.
C)will intersect the y-axis at 4.
D)represents a mixed cost.
Answer: D
Q3) The cost to be predicted is referred to as the:
A)regression.
B)dependent variable.
C)cost driver.
D)independent variable.
Answer: B
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Chapter 4: Costvolumeprofit Analysis
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211 Verified Questions
211 Flashcards
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Sample Questions
Q1) Kilos of yeast used by a bake shop is a potential measure of output for the bakery industry.
A)True
B)False
Q2) In multiproduct situations when sales mix shifts toward the product with the highest contribution margin,operating profit will be higher.
A)True
B)False
Q3) If the contribution margin ratio is 0.40,targeted net profit is $87 600,and targeted sales volume in dollars is $480 000,then total fixed costs are:
A)$87 600.
B)$144 000.
C)$104 400.
D)$67 000.
Q4) If the break-even point is 100 units and each unit sells for $50,then:
A)sales of $4000 will result in a loss.
B)sales of $5000 will result in zero profit.
C)selling 125 units will result in a profit.
D)All of these answers are correct.
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Chapter 5: Estimating the Cost of Producing Services
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) To motivate people to make decisions and to take actions that are congruent with the goals of the organisation,senior managers often include costs from more than one,but not necessarily all,business functions to emphasise that costs in some functions potentially affect costs in other functions.
A)True
B)False
Q2) Normal costing is a costing system that traces actual direct costs to a cost object and allocates indirect costs based on the budgeted cost-driver rate.
A)True
B)False
Q3) A cost object is anything for which an estimation of costs is sought.
A)True
B)False
Q4) The throughput time for a service transaction as compared with others in the industry is known as:
A)process time.
B)relative throughput time.
C)degree of variation.
D)hybrid time.
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Chapter 6: Estimating the Costs of Products and Inventory
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356 Verified Questions
356 Flashcards
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Sample Questions
Q1) Place the following steps in the order suggested by the seven steps used to assign costs to individual jobs:
A.identify indirect costs
B.compute the total cost of the job
C.select cost-allocation bases
D.compute the indirect cost rate
A)cadb
B)acdb
C)bacd
D)dcab
Q2) Actual costing is a costing method that allocates ________ indirect costs.
A)estimated
B)actual
C)predetermined
D)budgeted
Q3) The weighted-average process costing method does not distinguish between units started in the previous period but completed during the current period and units started and completed during the current period.
A)True
B)False
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Chapter 7: Target Costing, Managing Activities and Managing Capacity
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154 Verified Questions
154 Flashcards
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Sample Questions
Q1) By selecting the practical capacity concept,management recognises that the cost of capacity is represented by the cost of supplying the capacity,regardless of the demand for it.
A)True
B)False
Q2) Managers cannot reduce the costs of capacity easily or quickly because they are fixed.
A)True
B)False
Q3) What is the estimated life-cycle operating profit for the first two years?
A)$(1 480 000)
B)$11 200 000
C)$(1 400 000)
D)$3 200 000
Q4) In target costing,what are at least two techniques used to achieve target-costing goals?
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Chapter 8:
Activity-Based Management and Activity-Based Costing
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230 Verified Questions
230 Flashcards
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Sample Questions
Q1) Assuming activity-cost pools are used,what are the activity-cost driver rates for design changes,set-ups and inspections cost pools?
A)$300 per change,$80 per set-up,$2.50 per inspection
B)$210 per change,$105 per set-up,$26.25 per inspection
C)$250 per change,$200 per set-up,$3.75 per inspection
D)$400 per change,$100 per set-up,$7.50 per inspection
Q2) Managers might be inclined to shy away from ABC systems because of their apparent complexity and the perceived potential for the costs of these systems to exceed the benefits derived.
A)True
B)False
Q3) ABC systems:
A)help control non-financial items such as number of set-up hours.
B)help identify new designs to reduce costs.
C)reveal activities that can be eliminated.
D)All of these answers are correct.
Q4) Department-costing systems are a further refinement of ABC systems.
A)True
B)False
Page 10
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Chapter 9: Pricing and Customer Profitability
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171 Verified Questions
171 Flashcards
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Sample Questions
Q1) The higher the likely growth of a customer's sales,the more valuable the customer.
A)True
B)False
Q2) Customers with established reputations,also called 'reference customers',help generate sales from other customers through product endorsements.
A)True
B)False
Q3) For Geelong Generators,what is the minimum acceptable price of this one-time-only special order?
A)$1075
B)$1000
C)$1290
D)$900
Q4) Managers who utilise customer profitability charts should drop customers that generate a negative customer operating profit,since dropping an unprofitable customer will automatically cause overall income to increase.
A)True
B)False
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Chapter 10: Decision Making and Relevant Information
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211 Verified Questions
211 Flashcards
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Sample Questions
Q1) Explain why sunk costs are not considered relevant when choosing among alternatives.
Q2) One-time-only special orders should only be accepted if:
A)differential revenues exceed variable costs.
B)incremental revenues exceed incremental costs.
C)incremental revenues exceed fixed costs.
D)total revenues exceed total costs.
Q3) All variable costs are relevant and all fixed costs are irrelevant.
A)True
B)False
Q4) If there are 600 machine-hours available per week,how many rockers of each model should Jim Darwin produce to maximise profits?
A)100 units of Deluxe and 49 units of Super Deluxe
B)85 units of Deluxe and 60 units of Super Deluxe
C)100 units of Deluxe and 70 units of Super Deluxe
D)72 units of Deluxe and 70 units of Super Deluxe
Page 12
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Chapter 11: Budgeting, Management Control and Responsibility Accounting
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215 Verified Questions
215 Flashcards
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Sample Questions
Q1) Operating budgets include all of the following EXCEPT:
A)the revenues budget.
B)the administrative costs budget.
C)the budgeted income statement.
D)the budgeted balance sheet.
Q2) The manufacturing overhead costs budget includes budgeted amounts for:
A)indirect manufacturing labour.
B)direct materials.
C)direct manufacturing labour.
D)All of these answers are correct.
Q3) How many mattresses need to be produced in January 2018?
A)7100 mattresses
B)7050 mattresses
C)7500 mattresses
D)5400 mattresses
Q4) Operating decisions deal with how to best use the limited resources of an organisation.
A)True
B)False
Q5) Describe the concept of kaizen budgeting.
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Chapter 12: Flexible Budgets, Direct Cost Variances and Management Control
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246 Verified Questions
246 Flashcards
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Sample Questions
Q1) All budgets are based on standard costs.
A)True
B)False
Q2) An underemphasis on performance evaluation and meeting individual variance targets can undermine learning and continuous improvement.
A)True
B)False
Q3) One advantage of using standard times to develop a budget is they are simple to compile,are based solely on the past actual history,and do not require expected future changes to be taken into account.
A)True
B)False
Q4) To make sure that managers interpret variances correctly and make appropriate decisions based on them,managers need to recognise that variances can have ___________ cause(s).
A)ambiguous
B)unknown
C)multiple
D)one
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Chapter 13: Flexible Budgets, Overhead Cost Variances and Management Control
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170 Verified Questions
170 Flashcards
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Sample Questions
Q1) Which type of costs are overhead costs of products,and consist of some costs that are variable and some that are fixed with respect to the number of set-up hours?
A)Batch-level
B)Capacity-level
C)Individual-level
D)Set-up
Q2) What is the flexible-budget amount?
A)$100 000
B)$102 000
C)$120 000
D)$122 000
Q3) In the above chart,the amounts for (A)and (B),respectively,are:
A)Zero;$55 000 U
B)Zero;Zero
C)$10 500 U;$55 000 U
D)$10 500 U;Zero
Q4) Detailed 4-variance analyses are most common in large,complex businesses.
A)True
B)False
15
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Chapter 14: Allocation of Support-Department Costs,
Common Costs and Revenues
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137 Verified Questions
137 Flashcards
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Sample Questions
Q1) The Maintenance Department has been servicing Bondi Production for four years.Beginning next year,the company is adding a Scrap-Processing Department to recycle the materials from Bondi Production.As a result,maintenance costs are expected to increase from $480 000 per year to $500 000 per year.The Scrap-Processing Department will use 25% of the maintenance efforts.
Required:
a.Using the stand-alone cost-allocation method,identify the amount of maintenance cost that will be allocated to Bondi Production and the Scrap-Processing Department next year.
b.Using the incremental cost-allocation method,identify the amount of maintenance cost that will be allocated to Bondi Production and the Scrap-Processing Department next year.
Q2) Contract disputes often arise with respect to cost allocation.
A)True B)False
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Chapter 15: Strategy Formation, Strategic Control and the Balanced Scorecard
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157 Verified Questions
157 Flashcards
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Sample Questions
Q1) Interactive control systems relate to strategic uncertainties and focus managers' attention and learning on key strategic issues.
A)True
B)False
Q2) Measures of the balanced scorecard's learning-and-growth perspective include:
A)employee satisfaction ratings.
B)time taken to deliver a product to customers.
C)economic value added.
D)customer-retention percentage.
Q3) Excessive emphasis on __________ control systems and critical performance variables has the potential to cause an organisation to ignore emerging threats and opportunities.
A)diagnostic
B)boundary
C)beliefs
D)interactive
Q4) Research and development cost is an example of an engineered cost.
A)True
B)False
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Chapter 16: Quality, Time and the Balanced Scorecard
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120 Verified Questions
120 Flashcards
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Sample Questions
Q1) Increasing the capacity of a ____________ resource reduces manufacturing cycle times and delays.
A)bottleneck
B)strategic
C)complex
D)Pareto
Q2) A corporation can measure its quality performance by using financial or non-financial measures of quality.Discuss the merits of each method and whether the use of one precludes the use of the other.
Q3) Conducting business correctly and quickly helps increase revenues and decrease costs.
A)True
B)False
Q4) The two basic aspects of quality are quality of design and conformance quality.Define and give an example of each.
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Chapter 17: Inventory Management, Just-In-Time and Simplified Costing Methods
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126 Verified Questions
126 Flashcards
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Sample Questions
Q1) The Economic Order Quantity decreases with carrying costs,and increases with demand and ordering costs.
Variant question
A)True
B)False
Q2) In managing inventory,the costs that result when features and characteristics of a product or service are not in conformance with the specifications are known as:
A)inspection costs.
B)design costs.
C)costs of quality.
D)purchasing costs.
Q3) Lean accounting:
A)does not compute costs for individual products.
B)is much simpler than traditional product costing.
C)Neither of these answers are correct.
D)Both A and B are correct.
Q4) All inventory costs are recorded in the financial accounting system.
A)True
B)False
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Chapter 18: Capital Budgeting and Cost Analysis
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Sample Questions
Q1) What stage of the capital budgeting process involves choosing the projects for implementation?
A)Make decisions by choosing among alternatives stage
B)Management-control stage
C)Evaluate each possible course of action stage
D)Identify the problem stage
Q2) The net present value method calculates the expected monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time using the hurdle rate.
A)True
B)False
Q3) Post-investment audits are held because:
A)they are a means by which actual results can be compared to the costs and benefits expected.
B)they help alert senior management to problems in the implementation of the project.
C)they discourage mid-level managers from making overly optimistic estimates during the early stages of the capital budgeting process.
D)All of the above are correct.
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20
Chapter 19: Management Control Systems, Transfer Pricing and
Multinational Considerations
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140 Verified Questions
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Sample Questions
Q1) Wentworth Company has two divisions.The Bottle Division produces products that have variable costs of $3 per unit.Its 2010 sales were 150 000 to outsiders at $5 per unit and 40 000 units to the Mixing Division at 140% of variable costs.Under a dual transfer-pricing system,the Mixing Division pays only the variable cost per unit.The fixed costs of the Bottle Division are $125 000 per year. Mixing sells its finished products to outside customers for $11.50 per unit.Mixing has variable costs of $2.50 per unit in addition to the costs from the Bottle Division.The annual fixed costs of Mixing were $85 000.There was no beginning or ending inventories during the year.
Required:
What are the operating profits of the two divisions and the company as a whole for the year? Explain why the company's operating profit is less than the sum of the two divisions' total profits.
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21
Chapter 20: Performance Measurement, Compensation
and Multinational Considerations
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140 Verified Questions
140 Flashcards
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Sample Questions
Q1) What is Alpha Division's investment turnover?
A)1.5
B)0.42
C)2.4
D)0.6
Q2) Using residual income as a measure of performance rather than return on investment promotes goal congruence because residual income:
A)places importance on the reduction of underperforming assets.
B)concentrates on maximising an absolute amount of dollars.
C)calculates a percentage return rather than an absolute return.
D)concentrates on maximising the return on sales.
Q3) An example of a performance measure with a long-run time horizon is:
A)direct materials efficiency variances.
B)number of new patents developed.
C)return on investment.
D)All of these answers are correct.
Q4) Historical-cost-based accounting measures are very good for evaluating economic returns on new investments.
A)True
B)False
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Chapter 21: Measuring and Reporting Sustainability
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50 Verified Questions
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Sample Questions
Q1) A criticism of the Global Reporting Initiative (GRI)is that compliance with its principles just means that an organisation is reporting only those aspects of social and environmental reporting that make it look good.
A)True
B)False
Q2) The International Standards for Environmental Management Systems are ISO 14001 and ISO 14004.
A)True
B)False
Q3) In order,list the five steps in a decision-making process to achieve sustainability.
Q4) Pursuing sustainability almost always leads to a fall in the economic performance of an organisation.
A)True
B)False
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