MBA Core Accounting Final Exam
Course Introduction
MBA Core Accounting provides students with a fundamental understanding of accounting principles and their application in business decision-making. The course covers essential topics such as financial statement preparation and analysis, the role of accounting in managerial planning and control, and the impact of accounting information on organizational strategy. Through case studies and practical exercises, students learn how to interpret accounting data, evaluate organizational performance, and communicate financial insights to stakeholders, equipping them with the analytical tools necessary for effective leadership in a wide range of business environments.
Recommended Textbook
Managerial Accounting Decision Making and Motivating Performance 1st Edition by Srikant M.
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Page 2
Datar
Chapter 1: The Manager and Management Accounting
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Sample Questions
Q1) The best-designed strategies and the best-developed capabilities are useless unless they are effectively executed.
A)True
B)False
Answer: True
Q2) Although modern controllers have line authority over only their own departments,the modern concept of controllership maintains that the controller affects the entire company.
A)True
B)False Answer: True
Q3) IMA's overarching ethical principles include: Honesty,Fairness,Objectivity,and Responsibility.
A)True
B)False Answer: True
Q4) The number one planning tool when implementing strategy is a budget.
A)True
B)False Answer: True
Page 3
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Chapter 2: An Introduction to Cost Terms and Purposes
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Sample Questions
Q1) We define cost allocation as:
A)the process of tracking both direct and indirect costs associated with a cost object.
B)the process of determining the actual cost of the cost object.
C)the assignment of indirect costs to the chosen cost object.
D)a function of cost tracing.
E)not a function of cost assignment.
Answer: C
Q2) The two terms that managers use to describe cost classifications in manufacturing costing systems are prime costs and conversion costs.
A)True
B)False
Answer: True
Q3) All costs of a product that are considered as assets in the balance sheet when they are incurred and that become cost of goods sold only when the product is sold are:
Answer: inventoriable costs.
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4
Chapter 3: Cost-Volume-Profit Analysis
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Sample Questions
Q1) Cal's Baseball Clothing Corporation sells material to manufacturers to sew the uniforms.How many units of the material must the store sell to earn a net income of $1,000,what is the target operating income,based on an income tax rate of 40%?
A)$560.
B)$600.
C)$650.
D)$700.
E)$1,666.
Answer: B
Q2) Write a short essay and define the profit-volume (PV)graph.What are the benefits of the PV graph to managers?
Answer: The PV graph shows how changes in the quantity of units sold affect operating income.Recall that managers want to know how many units of a product they must sell to earn a specific level of operating income.The PV graph is beneficial to the manager because the illustration makes it easier to determine the precise point at which the difference between the total revenues line and the total costs line equal the target amount.
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Chapter 4: Job Costing
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Sample Questions
Q1) Which method is the most accurate method of allocating actual manufacturing overhead costs to the general ledger accounts?
Q2) Westinghouse Company has an opportunity to bid on a new job.The manufacturing cost estimate to bid on the job is $25,000,which yields a markup of 50% over the manufacturing cost.How much should they bid on this project?
A)$12,500
B)$25,000
C)$37,500
D)$50,000
E)$75,000
Q3) The process costing system is useful to managers when there are masses of identical or similar units of a product or service.
A)True
B)False
Q4) An alternative way to implement the reciprocal method is to formulate and solve linear equations.
A)True
B)False
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Chapter 5: Process Costing and Cost Allocation
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Sample Questions
Q1) All costs incurred beyond the splitoff point that are assignable to each specific product identified at the splitoff point are:
A)zero costs.
B)joint costs.
C)single costs.
D)common costs.
E)separable costs.
Q2) In process costing with no beginning or ending work-in-process inventory,physical units,whether complete or incomplete,refer to the number of:
A)zero units.
B)input units.
C)output units.
D)process units.
E)production units.
Q3) What is the process-costing system for the SG-40 in the assembly department? List the components in each.
Q4) Service-sector organizations typically have homogeneous product or service.
A)True
B)False
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Chapter 6: Activity-Based Costing and Activity-Based Management
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Sample Questions
Q1) Managers can use steps as a tool in simple costing systems when they have a single indirect cost pool because it helps them to allocate indirect costs using a single indirect-cost rate.Which of the following is not one of the steps to guide them in this process?
A)Identify the Products that are the Chosen Cost Objects.
B)Identify the Direct Costs of the Products.
C)Select the Cost-Allocation Bases to use for Allocating Indirect (or Overhead)Costs to the Products.
D)Identify the Indirect Costs Associated with Each Cost-Allocation Base.
E)Application of the Five-Step Decision Making Platform.
Q2) What are the strategic consequences of product undercosting and overcosting?
Q3) The costing system that refines a costing system by identifying individual activities as the fundamental cost object is ________.
A)cost hierarchy
B)cost-allocation base
C)refined-costing system
D)activity-based costing system
E)manager-based costing system
Q4) Why do managers refine costing systems?
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Chapter 7: Pricing Decisions, customer Profitability, and Cost Management
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Sample Questions
Q1) Which of the following is not true about pricing decisions?
A)Customers are an influence on demand and supply.
B)Competitors are an influence on demand and supply.
C)Costs are an influence on demand and supply.
D)Managers price products based on supply and demand.
E)Customers never have an influence on demand and supply.
Q2) The Nutcracker Company manufactures two types of bolts: Top Point,the premium bolt,and a less competitive bolt,Bottom Point.The managerial accountant uses activity-based costing system (ABC)to calculate the manufacturing cost of Top Point.The product is very similar to other products produced in the marketplace.Does the company operate in a competitive market or a noncompetitive market? How does the manager determine prices? Why?
Q3) ________ spans the time from initial R&D on a product to when customer service and support is no longer offered for that product.
A)Product life cycle
B)Life-cycle budgeting
C)Life-cycle costing
D)Customer life-cycle costs
E)Price discrimination
Page 9
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Chapter 8: Determining How Costs Behave
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Sample Questions
Q1) Many organizations use the industrial engineering method to estimate direct manufacturing costs but find it too costly or impractical for analyzing their entire cost structure.
A)True
B)False
Q2) In which step of estimating a cost function using quantitative analysis would a manager determine the dependent variable to use in a cost relationship?
A)Step 1: Choose the Dependent Variable.
B)Step 2: Identify the Independent Variable,or Cost Driver.
C)Step 3: Collect Data on the Dependent Variable and the Cost Driver.
D)Step 4: Plot the Data.
E)Step 5: Estimate the Cost Driver of the Estimated Cost Function.
Q3) Variable and fixed cost behavior patterns are not valid for linear cost functions within a given relevant range.
A)True
B)False
Q4) What is the impact of price breaks on direct material costs?
Q5) What is the ideal time-series database?
Q6) Why are a stable economy and technology important to managers?
Page 10
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Chapter 9: Decision Making and Relevant Information
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Sample Questions
Q1) Alps Incorporated,a supplier in Switzerland,offered to sell 300,000 toys to the American firm,International Toys,for 270,000 Swiss Francs.Assuming an exchange rate of 1.07 Swiss Francs,what qualitative and quantitative factors should the manager at International Toys consider prior to the purchase of the toys?
Q2) ________ are outcomes that are difficult to measure accurately in numerical terms.
A)Quantitative factors
B)Qualitative factors
C)Decision situations
D)Long-run implications
E)Make-or-buy decisions
Q3) In contrast to theory of constraints (TOC),activity-based costing (ABC)systems:
A)take a long-run perspective and focus on improving process by eliminating non-value activities.
B)take a short-run perspective and focus on improving process by increasing non-value activities.
C)are less useful for long-run pricing,and capacity management.
D)are less useful in long-run cost control.
E)are less useful in long-run capacity management.
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Chapter 10: Quality, inventory Management, and Time
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Sample Questions
Q1) What is the most direct financial measure of quality?
Q2) How do COQ measures and nonfinancial measures complement each other?
Q3) What is the economic-order-quantity decision model?
Q4) If Coffee Company has a safety stock of 400 units and the average daily demand is 30 units,how many days can be covered if the shipment from the supplier is delayed by 12 days?
A)1,200 days
B)15 days
C)13.3 days
D)21.5 days
E)14 days
Q5) How do manufacturing cycle times affect revenue and costs?
Q6) Companies that implement JIT purchasing choose their suppliers carefully and develop long-term supplier relationships.
A)True
B)False
Q7) On-time performance does not increase customer satisfaction because consumers only want lower prices.
A)True
B)False
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Chapter 11: Capital Investments
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Sample Questions
Q1) What is the impact on taxes when the manager sells an asset at a loss?
Q2) Johnny won the state lottery.What formula would he use to find the future value of his winnings?
A)P=S / (1 +/ r)<sup>n</sup>
B)S=P × (1+r)<sup>n</sup>
C)F=S × (2-r)
D)P=N × (S-ar<sup>3</sup>)<sup>2</sup>
E)r=(P × r +S)<sup>n</sup>
Q3) Is the IRR method always accurate?
Q4) Making capital investments is often an arduous task,laden with the purchase of many different goods and services.
A)True
B)False
Q5) Unlike the payback method,which ignores cash flows after the payback period,the AARR method considers income earned throughout a project's expected useful life.
A)True
B)False
Q6) Is the payback method affected by accrual accounting methods,for example,depreciation?
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Chapter 12: Master Budget and Responsibility Accounting
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Sample Questions
Q1) Why do managers want to use a cash budget since they already have an operating income budget?
Q2) The only new information managers need to prepare in the production budget is the level of finished goods inventory the company wants to maintain.
A)True
B)False
Q3) The cash budgets are useful because they encourage idle cash and cash deficiencies.
A)True
B)False
Q4) ________ is a system that measures the plans,budgets,actions,and actual results of each responsibility center.
A)Revenue center
B)Responsibility center
C)Responsibility accounting
D)Organization structure
E)Cost center
Q5) What are the benefits to managers that use budgets?
Q6) Why do managers use sensitivity analysis in cash flow analysis?
Page 14
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Chapter 13: Flexible Budgets, cost Variances, and Management Control
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Sample Questions
Q1) The static-budget variance is the difference between the actual result and the corresponding budgeted amount in the static budget.
A)True
B)False
Q2) Delicious Dishes Company has a fixed overhead budget of $3,600,000 in 2013,the operating managers budgeted 60,000 machine-hours for the year.A fixed overhead cost rate of $65 per machine hour and rate of 0.70 hours per actual output unit.
Required
Compute the budgeted fixed overhead cost per output unit.
A)$35 per dish set
B)$42 per dish set
C)$18 per dish set
D)$32 per dish set
E)$23 per dish set
Q3) Standards are usually expressed on a per-unit basis.
A)True
B)False
Q4) What are the benefits of variance analysis to a public official?
Q5) Why is there not an efficiency variance for fixed overhead costs?
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Chapter 14: Strategy, Balanced Scorecard, and Strategic Profitability Analysis
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Sample Questions
Q1) Wilderness Travels Bicycle Company's had a change in management.The new managerial accountant reviews the variance in units sold in 2011 compared to 2012 to assess the revenue effect of growth that occurred in sales volume.In 2011,2,460,000 units were sold;and,2,632,000 were sold in 2012,while the price per unit is set at $69.99.
Required
Compute the revenue effect of growth in 2011 and 2012.Indicate whether the difference is a favorable,or unfavorable,U,variance.
A)$12,038,280 F
B)$9,045,254 U
C)$3,695,250 F
D)$14,982,000 U
E)$2,358,000 F
Q2) Which of the following is not one of the four perspectives of the balanced scorecard?
A)Financial perspective.
B)Customer perspective.
C)External control perspective.
D)Learning and growth perspective.
E)Internal business process perspective.
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Chapter 15: Transfer Pricing
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Sample
Questions
Q1) The imperfect competition is illustrated in a downward-sloping curve for the ________ product.
A)end
B)normal
C)primary
D)beginning
E)intermediate
Q2) ________ pricing uses two separate transfer-pricing methods to price each transfer from one subunit to another.
A)Dual
B)Prorated
C)Minimum
D)Maximum
E)Negotiated
Q3) How do managers use information to design management control systems?
Q4) What is the focus of managers in a well-designed transfer-pricing system?
Q5) Transfer prices affect only income taxes.
A)True
B)False
Q6) Why does the opportunity cost guideline measure the minimum transfer price?
Page 17
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Chapter 16: Performance Measurement and Compensation
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Sample Questions
Q1) What can mangers do to prevent unethical and fraudulent behavior in organizations?
Q2) Which of the following are formal information systems that managers use to focus the company's attention and learning on key strategic issues?
A)Strategic goals.
B)Belief systems.
C)Boundary systems.
D)Diagnostic control systems.
E)Interactive control systems.
Q3) Which of the following is not true about team performance?
A)Teams achieve better results than individuals acting alone.
B)Companies reward individuals on team-based performance.
C)Team incentives encourage individuals to help one another as they strive toward a common goal.
D)The specific forms of team-based compensation vary across companies.
E)Culture and management style have no impact on team performance.
Q4) What can managers do to ensure organizations around the world to enhance the environment,and become socially responsible?
Q5) What is the goal of all balanced scorecard implementations?
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