MBA Accounting Exam Bank
Course Introduction
MBA Accounting is designed to provide students with a comprehensive understanding of advanced accounting principles and practices within the broader context of business management. The course covers key topics such as financial reporting, managerial accounting, strategic cost management, auditing, and taxation, emphasizing their application to real-world business scenarios. Students will also explore how accounting information is used in decision-making, performance evaluation, and strategic planning, equipping them with the analytical and leadership skills necessary for effective financial management in diverse organizations. Through case studies, simulations, and contemporary readings, students will develop both technical expertise and ethical awareness, preparing them for leadership roles in accounting and finance.
Recommended Textbook
Managerial Accounting 2nd Edition by Charles E. Davis
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Chapter 1: Accounting As a Tool for Management
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Sample Questions
Q1) A company that focuses on product differentiation does not need to monitor product costs because if the quality is sufficient customers will pay the price.
A)True
B)False
Answer: False
Q2) The four strategies based on a firm's approach to market share growth are build,hold,harvest and divest.
A)True
B)False
Answer: True
Q3) Managerial accounting is used by managers to A)Plan.
B)Evaluate.
C)Control.
D)All of these ans choices are correct.
Answer: D
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Chapter 2: Cost Behavior and Cost Estimation Summary of
Questions by Objectives and Blooms Taxonomy
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Questions
Q1) If an organization wants to make a profit,it must generate more sales revenue than the total costs it incurs.Which of the following is not a correct expression of the profit equation?
A)Operating income = Sales revenue - Total variable costs - Total fixed costs
B)Operating income = Sales revenue - Discretionary costs - Fixed costs
C)Operating income = [Sales price per unit Variable cost per unit x # units sold] Fixed cost
D)Operating income = [Contribution margin per unit x # units sold] Fixed costs
Answer: B
Q2) A scattergraph is a simple graph that shows
A)Total costs in relation to volume.
B)The fixed portion of a total cost.
C)The variable portion of a total cost.
D)The point where revenue equals total costs.
Answer: A
Q3) Discretionary fixed costs are fixed costs that cannot be changed over the short run.
A)True
B)False
Answer: False
Page 4
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Chapter 3: Cost-Volume-Profit Analysis and Pricing
Decisions
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Sample Questions
Q1) The formula for calculating the sales dollars required to meet target operating income is
A)Total fixed costs plus target operating income divided by contribution margin per unit.
B)Total fixed costs plus target operating income divided by contribution margin ratio.
C)Total fixed costs plus target operating income divided by total variable costs.
D)Contribution margin plus target operating income divided by total fixed costs.
Answer: B
Q2) Cost-plus pricing adds an amount to the cost of the product or service to cover the company's operating costs and contribute to its profit.
A)True
B)False Answer: True
Q3) Net income divided by 1 - tax rate = Operating income
A)True
B)False
Answer: True
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Chapter 4: Product Costs and Job Order Costing
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Sample Questions
Q1) Which of the following expenses are reported on the income statement as expenses when they are incurred?
A)Product costs
B)Period costs
C)Indirect material
D)Direct material
Q2) Purple Bear,Inc.produces boat motors.Janice Smyth,the company's controller has provided you with the following information.
\[\begin{array}{lr}
\text { Beginning balance, Direct Materials Inventory } & \$ 78,000 \\
\text { Ending balance, Direct Materials Inventory } & 72,000 \\
\text { Beginning balance, Work in Process Inventory } & 125,000 \\
\text { Ending balance, Work in Process Inventory } & 128,000 \\
\text { Direct Labor } & 760,000 \\
\text { Manufacturing Overhead } & 350,000 \\
\text { Direct materials purchased } & 850,000
\end{array}\] Using the above cost information, prepare a cost of goods manufactured schedule.
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Chapter 5: Planning and Forecasting
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Sample Questions
Q1) The calculation for the standard direct labor cost is
A)Standard wage rate per direct labor hour x actual quantity of direct labor hours.
B)Standard wage rate per direct labor hour x standard quantity of direct labor hours.
C)Actual wage rate per direct labor hour x standard quantity of direct labor hours.
D)Actual wage rate per direct labor hour x actual quantity of direct labor hours.
Q2) Julie Finn is preparing the materials purchases budget for the second quarter.The production manager has provided the following production budget information: January - 60,000 units, February 55,000 units, March 50,000 units. Each unit requires 5 gallons of direct materials, and Julie wants to maintain an ending inventory equal to 15% of the next months production needs. How many gallons will Julie budget to purchase in February?
A) 271,250
B) 275,000
C) 282,500
D) 312,500
Q3) What is budgetary slack and why is it an issue in budget preparation?
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Chapter 6: Performance Evaluation: Variance Analysis
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Sample Questions
Q1) Hunter Company produces personalized towel wraps.During May,the company's actual wage rate was $8.50.The standard wage rate is $8 per hour,and the standard hours allowed for actual production was 9,000.The favorable direct labor efficiency variance for May was $1,200.
Required:
How many hours were actually worked during May?
Q2) Fox Company manufactures decorative fountains used by hotels and restaurants.The company applies fixed overhead based on direct labor hours.Fox Company's fixed overhead spending variance for the year was $6,500 unfavorable.For the current year,the company had budgeted to produce 78,000 fountains.The company's actual fixed overhead for the year was $689,000.Fox produced 75,000 fountains and used 131,250 direct labor hours,which was the standard hours allowed for the number of fountains produced.What was Fox's budgeted fixed overhead rate per direct labor hour for the year if necessary,round your ans to the nearest cent?
A) $5.30/DLH
B) $5.00/DLH
C) $5.05/DLH
D) $5.25/DLH
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Chapter 7: Activity-Based Costing and Activity Based Management
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Sample Questions
Q1) In an activity-based costing system,which of the following is \(\textbf{ not }\) a category in which activities are classified?
A)Unit-level
B)Product-level
C)Industry-level
D)Customer-level
Q2) First-stage allocation is the process of assigning manufacturing overhead costs to activity pools.
A)True
B)False
Q3) The key to reducing costs through activity management is
A)Eliminating high-cost executive positions.
B)Eliminating activities such as inspections.
C)Eliminating the resources associated with the reduced activities.
D)All of these ans choices are keys to reducing costs through activity management.
Q4) Customer-level activities are also referred to as customer-sustaining activities.
A)True
B)False
Page 9
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Chapter 8: Using Accounting Information to Make Managerial Decisions
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Sample Questions
Q1) The formula for calculating the contribution margin per constrained resource is Contribution Margin Per Unit divided by Units Produced.
A)True
B)False
Q2) ABC Company manufactures sleeping bags.It has the capacity to produce 6,000 sleeping bags a year,but only produced 5,700 bags that could be sold because 5% of the bags had zippers that were defective.Under the theory of constraints,which of the following would be the most likely action to eliminate the problem of defective zippers?
A)Outsource the installation of zippers.
B)Redesign the sleeping bag to have a longer zipper.
C)Purchase a better-quality zipper.
D)Replace sleeping bag production with a product that does not have defects.
Q3) Which of the following combinations results in relevant information?
A)Occurs in the future and is unavoidable
B)Occurs in the future and is avoidable
C)Occurs in the past and is unavoidable
D)Occurs in the past and is avoidable
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Page 10
Chapter 9: Capital Budgeting
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Q1) Which of the following is \(\textbf{ not }\) a step in the net present value approach to capital budgeting?
A)Identify the amount and timing of each cash flow
B)Determine the appropriate discount rate
C)Compare the discount rate to the hurdle rate
D)Calculate the net present value of the project
Q2) The payback period is the time it takes,in years,for an investment to return the original amount of invested capital.
A)True
B)False
Q3) Managers use the capital budgeting techniques to make which of the following two types of capital budgeting decisions?
A)Screening decisions and preference decisions.
B)Screening decisions and pricing decisions.
C)Preference decisions and pricing decisions.
D)None of these ans choices are correct.
Q4) Capital assets are also referred to as long-lived assets.
A)True
B)False
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Chapter 10: Decentralizing and Performance Evaluation
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Sample Questions
Q1) Dublin Corporation has operating income of $15,000 on $200,000 of sales.Dublin's average operating assets total $100,000.The corporation has a minimum required return of 18%.
Required:
Calculate Dublins return on investment using the DuPont method. Show your work.
Q2) In the Dupont Model for calculating ROI,which of the following components appears on both the margin side of the expression and the asset turnover side?
A)Operating income
B)Sales revenue
C)Average operating assets
D)Segment margin
Q3) What is really needed to measure a segment's performance is an income statement that highlights
A)Variable versus fixed costs.
B)Product versus period costs.
C)All the elements under the segment manager's control.
D)None of these ans choices are correct.
Q4) What is a transfer price? List the four ways of determining a transfer price.
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Chapter 11: Performance Evaluation Revisited: a Balanced Approach
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Q1) Which of the following is \(\textbf{ not }\) one of the four balanced scorecard perspectives?
A)Learning and growth
B)Production
C)Customer
D)Financial
Q2) Before a balanced scorecard can be developed,managers must
A)Be clear about the strategy they are trying to achieve.
B)Understand the cause-and-effect relationship between various measures.
C)Both Be clear about the strategy they are trying to achieve and Understand the cause-and-effect relationship between various measures.
D)Neither Be clear about the strategy they are trying to achieve nor Understand the cause-and-effect relationship between various measures.
Q3) The time between an order's placement and its shipment is referred to as
A)Delivery cycle time.
B)Production cycle time.
C)Sales order cycle time.
D)Throughput time.
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Chapter 12: Financial Statement Analysis
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Sample Questions
Q1) Three measures of liquidity are working capital,current ratio,and acid-test ratio.What do each of these measure,and how are they each calculated?
Q2) The following financial statement items are shown for J&T Manufacturing.
\(\begin{array}{lr}
\text { Net Sales } & \$ 840,000 \\
\text { Cost of Goods Sold } & \$ 360,000 \\
\text { Insurance Expense } & \$ 28,000 \\
\text { Total Operating Expenses } & \$ 120,000 \\
\text { Net Income } & \$ 56,000
\end{array}\) Calculate the common-size percentage for Insurance Expense.
A) 3.3%
B) 5.8%
C) 23.3%
D) 50.0%
Q3) Common-size statements are especially useful in comparing A)A company's performance across time.
B)Companies of different size.
C)Supplemental information included in the corporate annual report.
D)None of these ans choices are correct.
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Chapter 13: Statement of Cash Flows
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Q1) On the cash flow statement,paying a cash dividend to stockholders is a financing activity.
A)True
B)False
Q2) Using the direct method of preparing the statement of cash flows,to determine the cash effects of operating activities,which of the following needs to be adjusted?
A)Net income
B)Reported revenues and expenses
C)Long-term assets and liabilities from the balance sheet
D)Equity as reported in the balance sheet
Q3) Which of the following is a use of cash?
A)Purchasing equipment for cash
B)Purchasing supplies on account
C)Declaring a stock dividend
D)All of these ans choices are uses of cash
Q4) On the cash flow statement,the gain on the sale of a delivery truck is an investing activity.
A)True
B)False
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Chapter 14: Topic Focus: Process Costing
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Q1) Which of the following is a similarity between job order costing and process costing systems?
A)Both mass-produce identical products
B)Both accumulate direct materials,direct labor and manufacturing overhead costs
C)Both accumulate product cost on a departmental production report
D)None of these ans choices are similarities between job costing and process costing systems.
Q2) In process costing,all materials are added at the beginning of the production process,then labor and overhead is added during the production process.
A)True
B)False
Q3) Which of the following types of entities would probably use a process costing system?
A)Oil refiner
B)Construction company
C)Airplane manufacturer
D)CPA firm
Q4) List three goods or services likely to use a process costing system and three that are likely to use a job order costing system.
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Chapter 15: Topic Focus Variable and Absorption Costing
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Q1) In variable costing,fixed manufacturing overhead is treated as a product cost.
A)True
B)False
Q2) What managerial behavior does variable costing render ineffective?
Q3) When using variable costing,fixed manufacturing overhead is treated as which of the following types of costs?
A)Product
B)Mixed
C)Period
D)Variable
Q4) The difference between absorption and variable costing is the timing difference in the expensing of fixed overhead costs.
A)True
B)False
Q5) The only difference between variable and absorption costing is the treatment of variable overhead costs.
A)True
B)False
Q6) Describe the format for a variable costing income statement.
Page 17
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Chapter 16: Topic Focus Standard Costing Systems
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Q1) When using a standard costing system,direct material and direct labor are recorded at actual cost while manufacturing over is applied at a standard rate.
A)True
B)False
Q2) When using a standard costing system,which of the following should be recorded for labor as a product is being made?
A)Debit wages payable for the actual hours of labor at the standard rate and credit work in process for the actual hours worked at the standard rate
B)Debit payable wages for the standard hours at the standard rate and credit work in process for the actual hours at the actual rate
C)Credit wages payable for the standard hours at the standard rate and debit work In process for the standard hours at the actual rate
D)Credit wages payable for the actual hours at the actual rate and debit work in process for the standard hours at the standard rate
Q3) What is the difference between a normal costing system and a standard costing system?
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Chapter 17: Topic Focus Customer Profitability
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Q1) Unprofitable customers should be
A)Dropped immediately.
B)Evaluated for implications that any action will have on the customer,other customers and the company.
C)Evaluated for implications that any action will have on the company only.
D)Required to reimburse the company for any losses
Q2) The customer profit margin allows managers to compare customers based on A)Absolute sales volume.
B)How much each dollar of revenue they generate goes to the bottom line,regardless of the customers' absolute sales volume.
C)How many dollars a customer contributes to the bottom line.
D)None of these ans choices are correct.
Q3) The customer net profit shows managers how many dollars a customer contributes to the company's bottom line.
A)True
B)False
Q4) Customer net profit divides customer net profit by customer revenues.
A)True
B)False
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