Managerial Accounting
Textbook Exam Questions
Course Introduction
Managerial Accounting introduces the fundamental concepts and techniques used by managers to make informed business decisions. This course explores topics such as cost behaviors, budgeting, performance evaluation, and decision-making processes relevant to planning and controlling organizational operations. Emphasis is placed on the analysis and interpretation of financial data, formulation of budgets, calculation of product and service costs, and the use of accounting information for strategic planning and operational control. Through case studies and problem-solving exercises, students gain practical experience in applying managerial accounting principles to real-world scenarios.
Recommended Textbook
MANAGERIAL ACCOUNTING Version 1.0 by
Kurt Heisinger and Joe Hoyle
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13 Chapters
878 Verified Questions
878 Flashcards
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Chapter 1: What Is Managerial Accounting
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Sample Questions
Q1) All of the following statements regarding ERP systems are true except:
A)They are relatively inexpensive.
B)They provide real-time information.
C)They can be used by both manufacturing and service companies.
D)They do not guarantee increased profits.
E)None of the above.
Answer: A
Q2) The term "product costs" refers exclusively to the direct labor used in the production process.
A)True
B)False
Answer: False
Q3) Chief financial officer
Answer: A
Q4) Managerial accountant
Answer: F
Q5) Direct labor and direct materials are typically easily traceable to a product.
A)True
B)False
Answer: True
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Chapter 2: How Is Job Costing Used to Track Production Costs
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Sample Questions
Q1) When direct materials are transferred into production,the journal entry includes a debit to the Work in Process Inventory account.
A)True
B)False
Answer: True
Q2) Process costing is best described by which statement?
A)Only direct materials and manufacturing overhead are assigned to products under process costing.
B)Units produced in a process costing system are unique and are produced individually.
C)Product costs are tracked by department and assigned to products passing through each department.
D)There cannot be any beginning or ending Work in Process Inventory with process costing.
E)None of the answer choices is correct.
Answer: C
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Chapter 3: How Does an Organization Use Activity-Based
Costing to Allocate Overhead Costs
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Sample Questions
Q1) Value-added activities are typically ignored when using activity-based management.
A)True
B)False Answer: False
Q2) Appraisal costs are the same as detection costs.
A)True
B)False Answer: True
Q3) Refer to Exhibit 3-2.What is the total overhead allocated to the purchasing activity associated with Apple Pies?
A)$90,000
B)$24,000
C)$58,500
D)$32,000
E)None of the answer choices is correct.
Answer: A
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Page 5
Chapter 4: How Is Process Costing Used to Track
Production Costs
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Sample Questions
Q1) Frost Company produces cupcakes in large batches.Three departments are involved in the production process -- Mixing,Baking,and Packaging.Frost uses a process costing system.Assume products with a cost of $9,000 are sold to customers.Which of the following journal entries is needed to record this transaction?
A)Cost of Goods Sold 9,000
Finished Goods Inventory 9,000
B)WIP Inventory - Packaging 9,000
Finished Goods Inventory 9,000
C)Finished Goods Inventory 9,000
Sales Revenue 9,000
D)Finished Goods Inventory 9,000
Cost of Goods Sold 9,000
E)None of the answer choices is correct.
Q2) When using a process costing system,product costs are tracked by department rather than by job.
A)True
B)False
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Chapter 5: How Do Organizations Identify Cost Behavior
Patterns
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Sample Questions
Q1) Which of the following approaches for estimating fixed and variable costs using historical information fits a straight line to a set of data points?
A)Scattergraph method and regression analysis
B)Scattergraph method and account analysis
C)High-low method and account analysis
D)Scattergraph method and high-low method
E)None of the answer choices is correct.
Q2) When using a graph of total mixed costs,the y-intercept represents:
A)unit mixed costs
B)total mixed costs
C)total variable costs
D)total fixed costs
E)None of the answer choices is correct.
Q3) Regression analysis is one of the most accurate methods for estimating costs,because its estimates are based on the data set as a whole.
A)True
B)False
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Page 7
Chapter 6: How Is Cost-Volume-Profit Analysis Used for Decision Making
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Sample Questions
Q1) The only difference between absorption costing and variable costing is the treatment of fixed manufacturing overhead costs.
A)True
B)False
Q2) Sensitivity analysis is also called "what-if analysis."
A)True
B)False
Q3) Refer to Exhibit 6-4.Assume the sales mix remains the same at all levels of sales. How many units in total must be sold to break even?
A)25,000
B)28,000
C)14,000
D)70,000
E)None of the answer choices is correct.
Q4) Firms with low operating leverage tend to make more from increasing sales than similar firms with high operating leverage.
A)True
B)False
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Chapter 7: How Are Relevant Revenues and Costs Used to
Make Decisions
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Sample Questions
Q1) Computer Inc.has developed a new computer that can be sold for $800.If management requires a profit equal to 60 percent of the selling price,what is the target cost of this product?
A)$480
B)$740
C)$60
D)$320
E)None of the answer choices is correct.
Q2) When managers are making resource utilization decisions,the general rule is to:
A)minimize the use of the constrained resource.
B)maximize the contribution margin per unit.
C)maximize the contribution margin per unit of the constrained resource.
D)minimize the contribution margin per unit.
E)None of the answer choices is correct.
Q3) Cost-plus pricing is often used by companies that produce custom products where market prices are not easily available.
A)True
B)False
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Chapter 8: How Is Capital Budgeting Used to Make Decisions
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Sample Questions
Q1) If a project's net present value is negative,the internal rate of return is:
A)less than the discount rate.
B)equal to the discount rate.
C)greater than the discount rate.
D)cannot be determined without more information.
Q2) Refer to Exhibit 8-2.What is the net present value of Investment A (rounded to the nearest dollar)?
A)$72
B)$15,600
C)$30,000
D)$361,680
E)None of the answer choices is correct.
Q3) The appropriate rate to be used for evaluating a long-term investment proposal can be referred to as all of the following except:
A)the required rate of return.
B)the discount rate.
C)the cash flow rate.
D)the hurdle rate.
E)None of the answer choices is correct.
10
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Chapter 9: How Are Operating Budgets Created
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Sample Questions
Q1) Merchandising companies and service organizations do not use production budgets.
A)True
B)False
Q2) All of the following appear on the budgeted income statement except:
A)selling and administrative expenses.
B)cost of goods sold.
C)accounts payable.
D)sales.
E)None of the answer choices is correct.
Q3) Alta Vista Company plans to sell 90,000 units in June and 135,000 units in July.The company's policy is to keep 15% of the next month's sales in ending inventory.If the ending inventory in May was consistent with this policy,how many units should be produced in June?
A)110,250 units
B)83,250 units
C)96,750 units
D)123,750 units
E)There is not enough information to answer this question.
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Chapter 10: How Do Managers Evaluate Performance Using Cost Variance Analysis
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Sample Questions
Q1) Refer to Exhibit 10-4.Based on this information,what is the variable overhead efficiency variance?
A)$48,000 favorable
B)$48,000 unfavorable
C)$9,000 unfavorable
D)$9,000 favorable
E)None of the answer choices is correct.
Q2) Refer to Exhibit 10-2.What is the standard cost per unit for direct labor?
A)$80.00
B)$5.00
C)$24.00
D)$7.20
E)None of the answer choices is correct.
Q3) There is no efficiency variance for fixed manufacturing overhead since,by definition,fixed costs do not change with changes in the activity base.
A)True
B)False
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Page 12
Chapter 11: How Do Managers Evaluate Performance in
Decentralized Organizations
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Sample Questions
Q1) Refer to Exhibit 11-2.Assume the Refrigerator Division has average operating assets totaling $24,000,000 for the year.What is the division's return on investment (to the nearest hundredth of a percent)?
A)40.80%
B)17.00%
C)24.17%
D)58.00%
E)None of the answer choices is correct.
Q2) An organizational segment that is responsible for costs and revenues is known as: A)a financing center.
B)a profit center.
C)a cost center.
D)an investment center.
E)None of the answer choices is correct.
Q3) The goal in establishing transfer pricing policies is to encourage managers to do what is in the best interest of the company,while also doing what is in the best interest of the division manager.
A)True
B)False
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Chapter 12: How Is the Statement of Cash Flows Prepared and Used
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Sample Questions
Q1) When using the indirect method for the statement of cash flows,depreciation expense is added to net income to obtain cash provided by operating activities.
A)True
B)False
Q2) Factory equipment sold for cash would appear in the financing activities
A)True
B)False
Q3) Which of the following is not an advantage of using the indirect method to prepare the statement of cash flows?
A)The indirect method provides a link between net income and cash flows from operating activities by reconciling the two amounts.
B)The indirect method typically takes less time to prepare than the direct method..
C)Accounting systems are better suited to generate information needed for the indirect method.
D)The indirect method is more accurate than the direct method.
E)None of the answer choices is correct.
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Chapter 13: How Do Managers Use Financial and
Nonfinancial Performance Measures
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Sample Questions
Q1) On a common-size balance sheet,current liabilities should be stated as a percentage of:
A)net sales.
B)total assets.
C)total liabilities.
D)total long term liabilities.
E)None of the answer choices is correct.
Q2) Which of the following types of measures focuses primarily on income statement information?
A)long-term solvency measures.
B)short-term liquidity measures.
C)market valuation measures.
D)profitability measures.
E)None of the answer choices is correct.
Q3) All of the following measures evaluate profitability except:
A)profit margin ratio.
B)return on assets.
C)market capitalization.
D)gross margin ratio.
E)None of the answer choices is correct.
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