MBA Accounting Final Test
Solutions
Course Introduction
MBA Accounting is designed to equip students with advanced knowledge and skills in financial and managerial accounting within the context of business strategy and decision-making. The course covers key topics such as financial statement analysis, budgeting, cost management, accounting information systems, and corporate governance. Emphasizing the integration of accounting principles with broader business objectives, students learn to interpret financial data, assess organizational performance, and support strategic planning. Through case studies and real-world applications, the course prepares graduates to excel in leadership roles that require strong analytical and financial acumen in diverse business environments.
Recommended Textbook
Managerial Accounting 16th Edition by Ray H Garrison
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31 Chapters
4817 Verified Questions
4817 Flashcards
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Page 2
Chapter 1: Managerial Accounting and Cost Concepts
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299 Verified Questions
299 Flashcards
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Sample Questions
Q1) If 3,000 units are produced,the total amount of indirect manufacturing cost incurred is closest to:
A) $4,200
B) $10,400
C) $14,600
D) $12,000
Answer: C
Q2) Although the traditional format income statement is useful for external reporting purposes,it has serious limitations when used for internal purposes because it does not distinguish between fixed and variable costs.
A)True
B)False
Answer: True
Q3) Conversion cost is the same thing as manufacturing overhead.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Job-Order Costing: Calculating Unit Production
Costs
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292 Flashcards
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Sample Questions
Q1) The total job cost for Job K818 is closest to:
A) $1,675
B) $2,595
C) $1,195
D) $2,320
Answer: B
Q2) The predetermined overhead rate is closest to:
A) $11.90 per direct labor-hour
B) $7.10 per direct labor-hour
C) $9.50 per direct labor-hour
D) $2.40 per direct labor-hour
Answer: C
Q3) The total job cost for Job K332 is closest to:
A) $5,775
B) $6,132
C) $6,587
D) $1,267
Answer: C
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Chapter 3: Job-Order Costing: Cost Flows and External Reporting
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255 Flashcards
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Sample Questions
Q1) How much is the cost of goods available for sale on the Schedule of Cost of Goods Sold?
A) $203,000
B) $170,000
C) $167,000
D) $163,000
Answer: A
Q2) In October,Raddatz Inc.incurred $73,000 of direct labor costs and $6,000 of indirect labor costs.The journal entry to record the accrual of these wages would include a:
A) debit to Manufacturing Overhead of $6,000
B) debit to Work in Process of $79,000
C) credit to Manufacturing Overhead of $6,000
D) credit to Work in Process of $79,000
Answer: A
Q3) On a manufacturing company's income statement,direct labor is separately listed as an expense.
A)True
B)False
Answer: False
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Chapter 4: Process Costing
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Sample Questions
Q1) In August,one of the processing departments at Khatak Corporation had beginning work in process inventory of $34,000 and ending work in process inventory of $30,000.During the month,the cost of units transferred out from the department was $374,000.
Required:
Construct a cost reconciliation report for the department for the month of August.
Q2) What are the equivalent units for conversion costs for the month in the first processing department?
A) 6,250
B) 5,900
C) 350
D) 6,900
Q3) What are the equivalent units for conversion costs for the month in the first processing department?
A) 910
B) 8,010
C) 7,100
D) 8,400
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6
Chapter 5: Cost-Volume-Profit Relationships
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Sample Questions
Q1) What is the margin of safety in dollars?
A) $5,520,000
B) $1,545,600
C) $3,974,400
D) $3,680,000
Q2) The contribution margin ratio is closest to:
A) 75%
B) 67%
C) 25%
D) 33%
Q3) The smaller the contribution margin ratio,the smaller the amount of sales required to cover a given amount of fixed expenses.
A)True
B)False
Q4) The break-even in monthly dollar sales is closest to:
A) $791,436
B) $535,365
C) $506,000
D) $308,660
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Chapter 6: Variable Costing and Segment Reporting: Tools for Management
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Sample Questions
Q1) The net operating income (loss)under variable costing in Year 1 is closest to:
A) $144,000
B) $2,000
C) $26,000
D) $174,000
Q2) The unit product cost under absorption costing in Year 2 is closest to:
A) $33.00
B) $9.00
C) $24.00
D) $37.00
Q3) What is the total period cost for the month under the absorption costing?
A) $24,200
B) $8,800
C) $58,000
D) $33,800
Q4) Variable costing is more compatible with cost-volume-profit analysis than is absorption costing.
A)True
B)False
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Chapter 7: Super-Variable Costing
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Sample Questions
Q1) Nurre Corporation manufactures and sells one product.In the company's first year of operations,the variable cost consisted solely of direct materials of $88 per unit.The annual fixed costs were $729,000 of direct labor cost,$1,917,000 of fixed manufacturing overhead expense,and $814,000 of fixed selling and administrative expense.The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses.During its first year of operations,the company produced 27,000 units and sold 22,000 units.The company's only product is sold for $247 per unit.
Required:
a.Assume the company uses super-variable costing.Compute the unit product cost for the year and prepare an income statement for the year.
b.Assume that the company uses an absorption costing system that assigns $27 of direct labor cost and $71 of fixed manufacturing overhead to each unit that is produced.Compute the unit product cost for the year and prepare an income statement for the year.
Q2) Super-variable costing is a costing method mat treats direct labor and manufacturing overhead costs as product costs.
A)True
B)False
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Page 9
Chapter 8: Master Budgeting
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Sample Questions
Q1) The cost of December merchandise purchases would be:
A) $255,000
B) $139,500
C) $235,500
D) $240,000
Q2) December cash disbursements for merchandise purchases would be:
A) $139,500
B) $246,000
C) $240,000
D) $235,500
Q3) The disbursements section of a cash budget consists of all cash payments for the period except cash payments for dividends.
A)True
B)False
Q4) The budgeted direct labor cost per unit of Product WZ would be:
A) $50.75
B) $14.50
C) $4.14
D) $18.00
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Chapter 9: Flexible Budgets and Performance Analysis
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Sample Questions
Q1) Canniff Air uses two measures of activity,flights and passengers,in the cost formulas in its budgets and performance reports.The cost formula for plane operating costs is $56,560 per month plus $2,618 per flight plus $5 per passenger.The company expected its activity in February to be 63 flights and 254 passengers,but the actual activity was 62 flights and 255 passengers.The actual cost for plane operating costs in February was $218,820.The plane operating costs in the planning budget for February would be closest to:
A) $222,764
B) $222,349
C) $220,151
D) $218,820
Q2) The manufacturing overhead in the flexible budget for November would be closest to:
A) $55,511
B) $56,433
C) $55,720
D) $55,660
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Chapter 10: Standard Costs and Variances
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Sample Questions
Q1) The labor rate variance for September is:
A) $3,675 F
B) $3,528 U
C) $3,528 F
D) $3,675 U
Q2) The variable overhead efficiency variance for August is:
A) $720 U
B) $720 F
C) $780 U
D) $780 F
Q3) The materials quantity variance for August is:
A) $10,980 F
B) $11,346 U
C) $10,980 U
D) $11,346 F
Q4) The standard price per unit for direct materials should reflect the final,delivered cost of the materials.
A)True B)False
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Chapter 11: Performance Measurement in Decentralized Organizations
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Sample Questions
Q1) If the company pursues the investment opportunity and otherwise performs the same as last year,the combined ROI for the entire company will be closest to:
A) 3.9%
B) 24.0%
C) 14.5%
D) 18.5%
Q2) Move time is considered non-value-added time.
A)True
B)False
Q3) Chavin Company had the following results during August: net operating income,$220,000; turnover,5; and ROI 25%.Chavin Company's average operating assets were:
A) $880,000
B) $44,000
C) $55,000
D) $1,100,000
Q4) Inspection Time is generally considered to be value-added time. A)True B)False
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Chapter 12: Differential Analysis: The Key to Decision Making
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Sample Questions
Q1) If product B is processed beyond the split-off point,the financial advantage (disadvantage)as compared to selling B at the split-off point would be:
A) $36,000 per production run
B) $96,000 per production run
C) ($42,000) per production run
D) ($10,000) per production run
Q2) At what selling price would the new product be just breaking even?
A) $246 per unit
B) $250 per unit
C) $232 per unit
D) $282 per unit
Q3) Consistency demands that a cost that is relevant in one decision be regarded as relevant in other decisions as well.
A)True
B)False
Q4) In a special order situation,any fixed cost associated with the order would be irrelevant.
A)True
B)False
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Chapter 13: Capital Budgeting Decisions
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Sample Questions
Q1) The net present value of Project B is:
A) $90,355
B) $76,115
C) $36,115
D) $54,355
Q2) The simple rate of return on the investment would be:
A) 10%
B) 35%
C) 15%
D) 25%
Q3) The present value of the annual cost savings of $78,000 is closest to:
A) $763,064
B) $177,027
C) $546,000
D) $367,536
Q4) The net present value of the investment is:
A) $15,636
B) $24,000
C) $45,636
D) $60,000
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Chapter 14: Statement of Cash Flows
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Sample Questions
Q1) Based solely on the information above,the net cash provided by (used in)financing activities on the statement of cash flows would be:
A) $(70,000)
B) $70,000
C) $(130,000)
D) $130,000
Q2) In the statement of cash flows,collecting cash from customers is treated as a cash inflow in the financing activities section.
A)True
B)False
Q3) The net cash provided by (used in)financing activities for the year was:
A) $(18)
B) $5
C) $(5)
D) $8
Q4) Cash equivalents on the statement of cash flows consist of any investment that can be converted into cash within one year.
A)True
B)False
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Chapter 15: Financial Statement Analysis
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Sample Questions
Q1) The company's return on total assets for Year 2 is closest to:
A) 2.09%
B) 2.08%
C) 1.67%
D) 1.66%
Q2) The price-earnings ratio is determined by dividing market price per share of stock by the earnings per share.
A)True
B)False
Q3) The company's return on total assets for Year 2 is closest to:
A) 1.38%
B) 2.18%
C) 1.37%
D) 2.19%
Q4) The company's operating cycle for Year 2 is closest to:
A) 95.9 days
B) 75.3 days
C) 162.0 days
D) 9.2 days
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Chapter 16: Cost of Quality
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Sample Questions
Q1) Which of the following would be classified as an internal failure cost on a quality cost report?
A) Quality improvement projects.
B) Supervision of testing and inspection activities.
C) Debugging software errors.
D) Warranty repairs and replacements.
Q2) Which of the following would be classified as an external failure cost on a quality cost report?
A) Final product testing and inspection.
B) Disposal of defective products.
C) Supervision of testing and inspection activities.
D) Cost of field servicing and handling complaints.
Q3) Which of the following would be classified as an external failure cost on a quality cost report?
A) Depreciation of test equipment.
B) Test and inspection of in-process goods.
C) Test and inspection of incoming materials.
D) Warranty repairs and replacements.
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18
Chapter 17: Activity-Based Absorption Costing
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Sample Questions
Q1) The manufacturing overhead that would be applied to a unit of product E76I under the activity-based costing system is closest to:
A) $88.28
B) $96.29
C) $184.57
D) $10.13
Q2) The manufacturing overhead that would be applied to a unit of product N06D under the company's traditional costing system is closest to:
A) $28.78
B) $10.00
C) $63.31
D) $34.53
Q3) The unit product cost of product N40S under the activity-based costing system is closest to:
A) $68.00
B) $68.86
C) $124.68
D) $136.86
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19
Chapter 18: The Predetermined Overhead Rate and Capacity
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Sample Questions
Q1) The management of Krach Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity.The company's controller has provided an example to illustrate how this new system would work.In this example,the allocation base is machine-hours and the estimated amount of the allocation base for the upcoming year is 10,000 machine-hours.Capacity is 12,000 machine-hours and the actual level of activity for the year is assumed to be 9,500 machine-hours.All of the manufacturing overhead is fixed and both the estimated amount at the beginning of the year and the actual amount at the end of the year are assumed to be $12,000 per year.For simplicity,it is assumed that this is the estimated manufacturing overhead for the year as well as the manufacturing overhead at capacity.It is further assumed that this is also the actual amount of manufacturing overhead for the year. If the company bases its predetermined overhead rate on capacity,what would be the cost of unused capacity reported on the income statement prepared for internal management purposes?
A) $2,000
B) $2,500
C) $1,900
D) $600
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Page 20
Chapter 19: Job-Order Costing: a Microsoft Excel-Based Approach
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Sample Questions
Q1) In the Excel,or spreadsheet,approach to recording financial transactions,if manufacturing overhead is underapplied by X dollars,the Manufacturing Overhead account is closed out by deducting X dollars in the Manufacturing Overhead column and deducting X dollars in the Retained Earnings column.
A)True
B)False
Q2) In the Excel,or spreadsheet,approach to recording financial transactions,indirect labor paid in cash is recorded as a decrease in the Cash column and as an increase in the Work in Process column.
A)True
B)False
Q3) In the Excel,or spreadsheet,approach to recording financial transactions,any transactions involving sales or expenses will be recorded in the Net Income column of the balance sheet.
A)True
B)False
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Chapter 20: Fifo Method
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Sample Questions
Q1) Marston Corporation uses the FIFO method in its process costing system.The equivalent units of production for March for conversion costs totaled 37,500 units.The beginning work in process inventory in March consisted of 15,000 units,60% complete with respect to conversion costs.The ending work in process inventory in March consisted of 10,000 units,75% complete with respect to conversion costs.The number of units started during the month was:
A) 41,500 units
B) 34,000 units
C) 25,000 units
D) 72,500 units
Q2) The equivalent units for conversion for March,using the FIFO method,are:
A) 63,100 units
B) 65,000 units
C) 62,500 units
D) 65,100 units
Q3) In the cost reconciliation report under the FIFO method,the costs accounted for equals the cost of units transferred out plus the costs added during the period.
A)True
B)False
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Page 22
Chapter 21: Service Department Allocations
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Sample Questions
Q1) The total Corporate Law Department cost after allocations is closest to:
A) $254,137
B) $246,630
C) $254,301
D) $209,149
Q2) The amount of Building and Grounds department cost allocated to Operating Department A under the direct method would be:
A) $0
B) $11,600
C) $12,000
D) $13,920
Q3) Assume that SJM uses the step-down method to allocate service department costs,starting with Maintenance.The total overhead allocated from Maintenance to Mining would be closest to:
A) $25,143
B) $22,957
C) $51,150
D) $16,800
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23
Chapter 22: Analyzing Mixed Costs
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Sample Questions
Q1) The R<sup>2</sup> (i.e.,R-squared)tells us the percentage of the variation in the dependent variable (cost)that is explained by variation in the independent variable (activity).
A)True
B)False
Q2) The least-squares regression method computes the regression line that minimizes the sum of the squared deviations from the plotted points to the line.
A)True
B)False
Q3) The highest and lowest costs are always used to analyze a mixed cost under the high-low method.
A)True
B)False
Q4) Using the high-low method of analysis,the estimated variable cost per machine hour for electricity is closest to:
A) $0.40
B) $0.65
C) $0.70
D) $0.67
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Chapter 23: Time-Driven Activity-Based Costing: a Microsoft Excel-Based Approach
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Sample Questions
Q1) In a Cost Analysis report in time-based activity-based costing,the first step is to divide the total cost of the resources supplied by the practical capacity of the resources supplied to obtain the cost per minute of the resource supplied.
A)True
B)False
Q2) On the Capacity Analysis report in time-driven activity based costing,the "impact on expenses of matching capacity with demand" would be closest to:
A) ($71,159)
B) ($34,200)
C) ($102,600)
D) ($68,400)
Q3) On the Customer Cost Analysis report in time-driven activity-based costing,the Resolving Queries cost assigned to Customer I would be closest to:
A) $73.67
B) $127.77
C) $10.36
D) $82.88
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Page 25
Chapter 24: Predetermined Overhead Rates and Overhead
Analysis in a Standard Costing System
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Sample Questions
Q1) The total amount of manufacturing overhead applied is closest to:
A) $278,964
B) $289,296
C) $258,700
D) $268,256
Q2) The total amount of manufacturing overhead applied is closest to:
A) $201,600
B) $212,048
C) $190,874
D) $223,930
Q3) The fixed manufacturing overhead volume variance for April was:
A) $60,000 Unfavorable
B) $60,000 Favorable
C) $100,000 Favorable
D) $100,000 Unfavorable
Q4) The volume variance for February is:
A) $17,300 U
B) $17,300 F
C) $6,920 F
D) $6,920 U
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Chapter 25: Standard Cost Systems: a Financial Reporting
Perspective Using Microsoft Excel
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Sample Questions
Q1) The net operating income for the year is closest to:
A) $107,269
B) $6,150
C) $89,348
D) $72,960
Q2) When recording the direct labor costs,the Cash account will increase (decrease)by:
A) ($249,405)
B) $281,435
C) ($281,435)
D) $249,405
Q3) When the fixed manufacturing overhead cost is recorded,which of the following entries will be made?
A) ($16,300) in the FOH Volume Variance column
B) $16,300 in the FOH Volume Variance column
C) ($16,300) in the FOH Budget Variance column
D) $16,300 in the FOH Budget Variance column
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Chapter 26: Transfer Pricing
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Sample Questions
Q1) Using the formula in the text,if the lowest acceptable transfer price from the viewpoint of the selling division is $75 and the opportunity cost per unit on outside sales is $24,then the variable cost per unit must be:
A) $24 per unit
B) $99 per unit
C) $51 per unit
D) $75 per unit
Q2) Assume that the Valve Division is selling all of the valves it can produce to outside customers.From the standpoint of the Valve Division,what is the lost contribution margin if the valves are transferred internally rather than sold to outside customers?
A) $76,000
B) $969,000
C) $120,000
D) $20,000
Q3) If transfer prices are to be based on cost,then the costs should be actual costs rather than standard costs.
A)True
B)False
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Chapter 27: Service Department Charges
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Sample Questions
Q1) For performance evaluation purposes,how much of the actual Housekeeping Department costs for September should not be charged to the operating departments?
A) $960
B) $5,760
C) $0
D) $1,240
Q2) Since sales dollars represents "ability to pay," it is superior to most other bases used for allocating or charging service department costs.
A)True
B)False
Q3) For performance evaluation purposes,any variance over budgeted fixed costs in a service department should be the responsibility of the service department and should not be charged to the departments that use the service.
A)True
B)False
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Chapter 28: Pricing Decisions
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Sample Questions
Q1) After introducing the product,the company finds that it has excess capacity.A foreign dealer has offered to purchase 5,000 units of the product at a special price of $21 per unit.This sale would not disturb regular business.If the special price is accepted on the 5,000 units,the effect on total net income for the year should be:
A) $45,000 increase
B) $30,000 increase
C) $5,000 increase
D) $26,250 decrease
Q2) From a value-based pricing standpoint what range of possible prices should Wermers consider when setting a price for model LS-88?
A) $36,000 Value-based price
B) $31,000 Value-based price
C) $31,000 Value-based price
D) $36,000 Value-based price
$62,000
$62,000
$67,000
$67,000
Q3) The desired profit according to the target costing calculations is:
A) $696,000
B) $24,000
C) $86,400
D) $720,000
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Page 30
Chapter 29: The Concept of Present Value
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Sample Questions
Q1) The present value of an amount to be received in five years is exactly twice as large as the present value of an equal amount to be received in ten years.
A)True B)False
Q2) The present value of a cash flow increases as it moves further into the future.
A)True
B)False
Q3) (Ignore income taxes in this problem.)How much would you have to invest today in the bank at an interest rate of 8% to have an annuity of $4,800 per year for 7 years,with nothing left in the bank at the end of the 7 years? Select the amount below that is closest to your answer.
A) $33,600
B) $2,798
C) $24,989
D) $31,111
Q4) The higher the discount rate,the higher the present value of a given future cash flow.
A)True
B)False
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Chapter 30: Income Taxes and the Present Value Method
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Sample Questions
Q1) The net present value of the entire project is closest to:
A) $317,952
B) $157,952
C) $237,440
D) $224,000
Q2) The net present value of the entire project is closest to:
A) $246,590
B) $238,670
C) $322,000
D) $366,920
Q3) The income tax expense in year 3 is:
A) $15,000
B) $6,000
C) $9,000
D) $3,000
Q4) The net present value of the entire project is closest to:
A) $85,282
B) $139,420
C) $245,282
D) $168,000
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Chapter 31: the Direct Method of Determining the Net Cash
Provided by Operating Activities
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Q1) On the statement of cash flows,the sales adjusted to a cash basis would be:
A) $976,000
B) $982,000
C) $984,000
D) $980,000
Q2) During the year the balance in the Prepaid Expenses account increased by $6,000.In order to adjust the company's net income to a cash basis using the direct method on the statement of cash flows,it would be necessary to:
A) subtract the $6,000 from the selling and administrative expenses reported on the income statement.
B) add the $6,000 to the selling and administrative expenses reported on the income statement.
C) subtract the $6,000 from the cost of goods sold reported on the income statement.
D) add the $6,000 to the cost of goods sold reported on the income statement.
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