Strategic Management Accounting Review
Questions
Course Introduction
Strategic Management Accounting explores the integration of accounting information and management strategies to enhance decision-making and organizational performance. The course examines how management accounting tools and techniques, such as budgeting, cost analysis, performance measurement, and benchmarking, are applied to develop, implement, and monitor strategies that achieve long-term competitive advantage. Emphasis is placed on the role of accounting data in strategic planning, resource allocation, and evaluating business opportunities, as well as how management accountants contribute to aligning operational activities with broader organizational goals in dynamic business environments.
Recommended Textbook
Introduction to Management Accounting 16th Edition by Charles T. Horngren
Available Study Resources on Quizplus
17 Chapters
2438 Verified Questions
2438 Flashcards
Source URL: https://quizplus.com/study-set/3605
Page 2
Chapter 1: Managerial Accounting,the Business
Organization,and Professional Ethics
Available Study Resources on Quizplus for this Chatper
137 Verified Questions
137 Flashcards
Source URL: https://quizplus.com/quiz/71589
Sample Questions
Q1) A company is unsure whether it is more cost efficient to make or buy a component used in a manufactured product that is mass produced.What type of information is needed to make this decision?
A) scorekeeping
B) attention directing
C) problem-solving
D) management auditing
Answer: C
Q2) Who provides assurance to external users about the reliability of a company's financial statements?
A) Certified Management Accountants and Certified Public Accountants
B) Chartered Management Accountants and Certified Management Accountants
C) Certified Public Accountants and Chartered Management Accountants
D) Certified Public Accountants and Chartered Accountants
Answer: D
Q3) Product life cycles may range from a few months to many years.
A)True
B)False
Answer: True
Page 3
To view all questions and flashcards with answers, click on the resource link above.
Chapter 2: Introduction to Cost Behavior and Cost Volume
Profit Relationships
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/71588
Sample Questions
Q1) Beckham Company has the following information available: \(\begin{array}{ll}
\text { Selling price per unit } & \$ 100 \\
\text { Variable cost per unit } & \$ 55 \\
\text { Fixed costs per year } & \$ 400,000 \\
\text { Expected sales per year } & 20,000 \text { units } \end{array}\)
What is the expected operating income for a year?
A) $480,000
B) $500,000
C) $680,000
D) $700,000
Answer: B
Q2) To construct the Total Cost line on a cost-volume-profit graph,plot ________ and then plot ________.
A) mixed costs; step costs
B) step costs; mixed costs
C) fixed costs; variable costs
D) fixed costs; fixed costs plus variable costs
Answer: D
4
To view all questions and flashcards with answers, click on the resource link above.
Chapter 3: Measurement of Cost Behavior
Available Study Resources on Quizplus for this Chatper
136 Verified Questions
136 Flashcards
Source URL: https://quizplus.com/quiz/71587
Sample Questions
Q1) Presented below is the production data for six months of the year showing the mixed costs incurred by Madeline Company.
\(\begin{array}{lll}\text { Month }&\text { Cost }&\text { Units }\\
\text { July } & \$ 6,000 & 4,000 \\
\text { August } & \$ 11,250 & 9,500 \\
\text { September } & \$ 11,500 & 9,000 \\
\text { October } & \$ 11,700 & 10,500 \\
\text { November } & \$ 14,000 & 12,000 \\
\text { December } & \$ 12,850 & 10,000
\end{array}\)
Madeline Company uses the high-low method to analyze mixed costs.The predicted total cost at an operating level of 10,000 units is ________.
A) $11,725
B) $11,800
C) $12,000
D) $12,850
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Cost Management Systems and Activity-Based
Costing
Available Study Resources on Quizplus for this Chatper
143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/71586
Sample Questions
Q1) Which of the following statements is FALSE?
A) A cost may be defined as a sacrifice or giving up of resources for a particular purpose.
B) Costs are frequently measured by the monetary units that must be paid for goods and services.
C) Only manufacturing firms need some form of cost accounting.
D) A cost accounting system typically has two processes that include cost accumulation and cost assignment.
Q2) When using a two stage activity-based costing system,which of the following is NOT a legitimate step?
A) Identify a cost pool for each significant activity.
B) Assign the indirect resource cost to the appropriate cost pool.
C) Allocate the costs in each pool to products or services using multiple cost drivers.
D) Select an allocation base for each cost pool.
Q3) In a manufacturing company,unsold,fully complete products are called Work-In-Process Inventory.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Relevant Information for Decision Making With a
Focus on Pricing Decisions
Available Study Resources on Quizplus for this Chatper
136 Verified Questions
136 Flashcards
Source URL: https://quizplus.com/quiz/71585
Sample Questions
Q1) With increased global competition in many industries,companies are increasingly limited in influencing product prices.
A)True
B)False
Q2) In perfect competition,the profit-maximizing volume is the quantity at which
A) marginal cost equals price
B) contribution margin equals fixed cost
C) marginal revenue equals price
D) price exceeds marginal cost
Q3) Product design affects a small amount of costs in the value chain.
A)True
B)False
Q4) In managerial accounting,variable cost is a reasonable approximation of marginal cost in many situations.
A)True
B)False
Q5) In imperfect competition,marginal revenue usually decreases as volume increases.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Relevant Information for Decision Making With a
Focus on Operational Decisions
Available Study Resources on Quizplus for this Chatper
148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/71584
Sample Questions
Q1) In a make-or-buy decision,if plant facilities will remain idle when the decision is made to outsource a part used in a product,then the opportunity cost of the plant facilities is zero.Assume there are no alternative uses of the plant facilities available.
A)True
B)False
Q2) Opportunity costs and outlay costs are widely used synonyms.
A)True
B)False
Q3) In a make-or-buy decision for a part for a product,which of the following qualitative factors play a role?
A) quality of purchased part
B) credit terms offered by supplier of part
C) timeliness of delivery of purchased part by supplier
D) all of the above
Q4) Incremental costs are the ________ generated by a proposed alternative.
A) additional revenues
B) additional revenues or reduced costs
C) reduced costs
D) additional costs or reduced revenues
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Introduction to Budgets and Preparing the Master Budget
Available Study Resources on Quizplus for this Chatper
148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/71583
Sample Questions
Q1) What item is NOT a line item on the purchases and cost of goods sold budget?
A) purchases of inventory
B) sales
C) beginning inventory
D) desired ending inventory
Q2) The two main components of the master budget are the ________.
A) cash budget and the capital budget
B) purchases budget and the budgeted income statement
C) budgeted income statement and the budgeted balance sheet
D) operating budget and the financial budget
Q3) Which of the following is a component of the financial budget?
A) budgeted balance sheet
B) budgeted income statement
C) sales budget
D) purchases budget
Q4) An effective budget process communicates from the top down,but not from the bottom up.
A)True
B)False
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Flexible Budgets and Variance Analysis
Available Study Resources on Quizplus for this Chatper
143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/71582
Sample Questions
Q1) Beckowski Company had the following information available for its specialty product: Standards for one unit of product:
Direct Materials: 5 pounds at $2 per pound
Direct Labor: 0.50 hour at $16 per hour
Materials and Labor Used to produce 8,500 units:
Direct Materials: 46,000 pounds at ? per pound
Direct Labor: 4,000 hours at $16.80 per hour
If the Direct Materials Price Variance is $4,600 Unfavorable,what is the actual cost per pound of direct materials used?
A) $1.80
B) $1.90
C) $2.00
D) $2.10
Q2) Sales-activity variances measure how efficient managers have been in meeting the planned sales goal.
A)True
B)False
Q3) A favorable materials price variance may lead to an unfavorable materials usage variance.
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: Management Control Systems and Responsibility Accounting
Available Study Resources on Quizplus for this Chatper
148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/71581
Sample Questions
Q1) To identify defective products,companies incur inspection costs or ________ costs.
A) prevention
B) appraisal
C) internal failure
D) external failure
Q2) A management control system includes the techniques to gather and use information to ________.
A) motivate employee behavior
B) evaluate performance
C) make planning and control decisions
D) all of the above
Q3) Elements of the planning and control process for a management control system do NOT include ________.
A) measure, monitor and report
B) plan and execute
C) evaluate and reward
D) feedback and control
Q4) Describe a balanced scorecard and identify the categories of key performance indicators advocated by Kaplan and Norton.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Management Control in Decentralized Organizations
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/71580
Sample Questions
Q1) The following information pertains to the Vertigo Company: \(\begin{array}{ll}
\text { Total assets } & \$ 150,000 \\
\text { Total current liabilities } & \$ 110,000 \\
\text { Total expenses } & \$ 70,000 \\
\text { Total liabilities } & \$ 115,000 \\
\text { Total revenues } & \$ 80,000 \end{array}\)
Return on sales equals ________.
A) 12.5%
B) 50.0%
C) 75.0%
D) 133.0%
Q2) Use of ________ in evaluating capital investment projects will promote goal congruence and lead to better decisions than using ________.
A) return on investment; economic profit
B) economic profit; contribution by segment
C) contribution controllable by division manager; contribution by segment
D) economic profit, return on investment
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Capital Budgeting
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/71579
Sample Questions
Q1) When making capital budgeting decisions,the manager should utilize the marginal tax rate for the company instead of the average tax rate.
A)True
B)False
Q2) Levine Company will purchase a van for $40,000.It will have a depreciable life of 5 years and a terminal salvage value of $10,000.Assume a tax rate of 30% and a required rate of return of 12%.The company uses the straight-line method of depreciation for tax purposes.The annual cash operating savings at the end of each year,exclusive of depreciation,are $10,000 for five years.The present value of an ordinary annuity factor of one for 5 periods at 12% is 3.6048.The present value of one for 5 periods at 12% is 0.5674.What is the net present value of the van?
A) $(441)
B) $(2,604)
C) $1,722
D) $5,420
Q3) The payback model measures profitability as well as how quickly investment dollars are recouped.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Cost Allocation
Available Study Resources on Quizplus for this Chatper
130 Verified Questions
130 Flashcards
Source URL: https://quizplus.com/quiz/71578
Sample Questions
Q1) If a company chooses to allocate central support costs,it is important to allocate them using ________.
A) actual or estimated usage
B) a fair approach accepted by managers
C) the indirect costs of each division
D) A and B
Q2) Under the ABC approach to cost allocation,which of the following steps is NOT used in allocating costs to products?
A) Determine the key components of the system and the relationship among them.
B) Calculate and interpret the new ABC information.
C) Collect relevant data concerning costs and the physical flow of cost-allocation base units among resources and activities.
D) Select cost pools and cost-allocation bases in each producing department and assign all indirect costs to the appropriate cost pool.
Q3) Customer profitability does NOT depend on ________.
A) gross margin on products purchased by customer
B) cost of order changes
C) cost of sales returns
D) transfer prices between producing departments
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Accounting for Overhead Costs
Available Study Resources on Quizplus for this Chatper
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/71577
Sample Questions
Q1) Rocky Company had the following information: \(\begin{array}{ll}
\text { Budgeted factory overhead costs } & \$ 90,000 \\
\text { Actual factory overhead costs } & \$ 80,000 \\
\text { Budgeted production setups } & 12,000 \\
\text { Actual production setups } & 11,500 \end{array}\)
Assume production setups are the cost driver for factory overhead costs.The budgeted factory overhead rate is ________.
A) $6.25 per setup
B) $6.52 per setup
C) $6.78 per setup
D) $7.50 per setup
Q2) The immediate write-off method of disposing of underapplied overhead subtracts the dollar amount from Cost of Goods Sold.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Job-Order Costing and Process-Costing Systems
Available Study Resources on Quizplus for this Chatper
154 Verified Questions
154 Flashcards
Source URL: https://quizplus.com/quiz/71576
Sample Questions
Q1) Benville Hospital uses a job-order costing system for all patients who have surgery.The following information is available: \(\begin{array} { l }
\text { Budgeted indirect costs-pre-operating room}&\$84,000 \\
\text {udgeted indirect costs-operating room}&\$ 66,000\\
\text {Budgeted indirect costs-surgery recovery floor }&\$ 600,000\\
\text { Budgeted nursing hours-pre-operating roo}&4,000 \\
\text {Budgeted nursing hours-operating room }&1,000 \\
\text {Budgeted nursing hours - sur gery recovery floor }&7,500 \\ \end{array}\)
The cost driver for all indirect costs is nursing hours.The hospital uses a budgeted rate for indirect costs.The budgeted rate for indirect costs for the surgery recovery floor is
A) $42.00
B) $45.75
C) $75.00
D) $80.00
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 15: Basic Accounting: Concepts, techniques, and Conventions
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/71575
Sample Questions
Q1) Cudahy Company had the following transactions:
1)The owner started the company by investing $10,000 of cash.
2)The company paid $2,000 for six months of rent.The rent was paid in advance.
3)The company acquired $3,000 in inventory for cash.
4)The company sold inventory costing $1,400 for $2,900 on account.
After all these transactions,what is the balance in the cash account?
A) $2,100
B) $3,500
C) $5,000
D) $8,000
Q2) Under the accrual basis of accounting,the impact of transactions is recorded when cash is received or paid.
A)True
B)False
Q3) A cash payment on accounts payable will ________.
A) increase assets and increase liabilities
B) increase assets and increase stockholders' equity
C) decrease assets and decrease liabilities
D) decrease assets and increase stockholders' equity
Page 17
To view all questions and flashcards with answers, click on the resource link above.
Chapter 16: Understanding Corporate Annual Reports: Basic Financial Statements
Available Study Resources on Quizplus for this Chatper
140 Verified Questions
140 Flashcards
Source URL: https://quizplus.com/quiz/71574
Sample Questions
Q1) LIFO uses the ________ costs to measure the ending inventory.
A) latest
B) earliest
C) average
D) weighted-average
Q2) A payment on bonds payable will be reported in the ________ section of the statement of cash flows.
A) operating activities only
B) investing activities
C) financing activities
D) noncash investing and financing activities
Q3) An example of an investing activity on the statement of cash flows is the purchase of equipment for cash.
A)True
B)False
Q4) The account Unearned Revenue is a revenue account.
A)True
B)False
Page 18
To view all questions and flashcards with answers, click on the resource link above.
Chapter 17: Understanding and Analyzing Consolidated Financial Statements
Available Study Resources on Quizplus for this Chatper
125 Verified Questions
125 Flashcards
Source URL: https://quizplus.com/quiz/71573
Sample Questions
Q1) The following information is available for the Larry Company: \(\begin{array} { l }
\text { Net income for the year ended December 31,2014}&\$127.4\\
\text { Total stockholders' equity, December 31, 2014 }&500.0\\
\text { Total stockholders' equity, December 31, 2013 }&400.0\\
\text { Total liabilities, December 31, 2014}&240.0\\
\text { Total liabilities, December 31,2013}&182.0\\ \end{array}\)
What is the debt-to-equity ratio at December 31,2014?
A) 27%
B) 41%
C) 48%
D) 51%
Q2) A factor that contributes to recording goodwill when acquiring control of another company is ________.
A) outstanding management skills of parent company
B) unique product manufactured by parent company
C) established brand names by investee company
D) all of the above
Page 19
To view all questions and flashcards with answers, click on the resource link above.