Accounting for Decision Making Test Preparation
Course Introduction
Accounting for Decision Making introduces students to the fundamental concepts and techniques of accounting that support effective business decisions. The course covers the interpretation and analysis of financial statements, budgeting, cost-volume-profit analysis, and the use of accounting information for planning, control, and performance evaluation. Emphasis is placed on applying accounting principles to real-world scenarios, enabling students to assess the financial impact of managerial decisions and to communicate results meaningfully to stakeholders. By the end of the course, students will be equipped with the analytical tools necessary to make informed, strategic decisions in a variety of organizational contexts.
Recommended Textbook
Horngrens Cost Accounting A Managerial Emphasis 3rd Australian Edition by Charles Horngren
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21 Chapters
3782 Verified Questions
3782 Flashcards
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Chapter 1: Management Accounting in Context
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200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/70842
Sample Questions
Q1) Place the five steps in the decision-making process in the correct order:
A = Gather relevant information
B = Make and implement a decision
C = Identify the problem
D = Evaluate performance and learn
E = Identify and evaluate potential courses of action
A)C A E B D
B)D B E A C
C)E D A B C
D)A E B D C
Answer: A
Q2) Value chain refers to value to the employee.
A)True
B)False
Answer: False
Q3) Managers always require the information in an accounting system to be presented in the same format.
A)True
B)False
Answer: False
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Chapter 2: Different Costs for Different Purposes
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324 Verified Questions
324 Flashcards
Source URL: https://quizplus.com/quiz/70843
Sample Questions
Q1) ________ include the compensation of all manufacturing labour that can be traced to the cost object.
A)Indirect manufacturing costs
B)Direct manufacturing labour costs
C)Direct material costs
D)Manufacturing overhead costs
Answer: B
Q2) Variable costing is a method of inventory costing in which all variable manufacturing costs (direct and indirect)are included as inventoriable costs.
A)True
B)False
Answer: True
Q3) Costs that are fixed in the short run have no cost driver in the short run but may have a cost driver in the _______ run.
A)short
B)long
C)indefinite
D)cost driver
Answer: B
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Page 4
Chapter 3: Determining How Costs Behave
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182 Verified Questions
182 Flashcards
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Sample Questions
Q1) What is the difference between the 'cumulative average-time learning model' and the 'incremental unit-time learning model'?
Answer: In the cumulative average-time learning model,cumulative average time per unit declines by a constant percentage each time the cumulative quantity of units produced doubles.
In the incremental unit-time learning model,incremental time needed to produce the last unit declines by a constant percentage each time the cumulative quantity of units produced doubles.
Q2) Examples of non-linear cost functions include all of the following EXCEPT:
A)learning curves.
B)step fixed-cost functions.
C)step variable-cost functions.
D)mixed cost functions.
Answer: D
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Chapter 4: Costvolumeprofit Analysis
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211 Verified Questions
211 Flashcards
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Sample Questions
Q1) The margin of safety is the difference between:
A)actual contribution margin and budgeted contribution margin.
B)budgeted expenses and break-even expenses.
C)actual operating profit and budgeted operating profit.
D)budgeted revenues and break-even revenues.
Q2) If Kakadu Realtor plans a profit before tax of $105 000 and the tax rate is 30%,then Kakadu's planned net profit after tax should be:
A)$178 500.
B)$73 500.
C)$136 500.
D)$31 500.
Q3) Cost-volume-profit analysis assumes all of the following EXCEPT:
A)total fixed costs remain the same over the relevant range.
B)total variable costs remain the same over the relevant range.
C)units manufactured equal units sold.
D)all costs are variable or fixed.
Q4) Margin of safety measures the difference between budgeted revenues and break-even revenues.
A)True
B)False
Page 6
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Chapter 5: Estimating the Cost of Producing Services
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) When identical or similar units of products or services are mass-produced rather than processed as individual jobs,managers use process costing to calculate an average production cost for all units produced.
A)True
B)False
Q2) Managers use a(n)___________ system when the cost object is a distinct output called a job.
A)job-costing
B)actual costing
C)hybrid costing
D)process costing
Q3) Irrespective of the costing system that a manager or management accountant might select,the _________ rate is calculated in the same way.
A)overhead
B)activity
C)cost-driver
D)hourly
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Chapter 6: Estimating the Costs of Products and Inventory
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356 Verified Questions
356 Flashcards
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Sample Questions
Q1) If there was no beginning work in process and no ending work in process under the weighted-average process-costing method,the number of equivalent units for direct materials,if direct materials were added at the start of the process,would be:
A)equal to the units completed.
B)equal to the units started or transferred in.
C)less than the units completed.
D)Both A and B are correct.
Q2) What is the direct materials cost per equivalent unit during June?
A)$1123.81
B)$1890.35
C)$1579.00
D)$1730.20
Q3) A company may use job costing to assign costs to different product lines and then use process costing to calculate unit costs within each product line.
A)True
B)False
Q4) Equivalent units are calculated separately for each input.
A)True
B)False
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Chapter 7: Target Costing, Managing Activities and Managing Capacity
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154 Verified Questions
154 Flashcards
Source URL: https://quizplus.com/quiz/70848
Sample Questions
Q1) A locked-in cost is a(n):
A)cost that can be changed in the short run.
B)cost that has not yet been incurred but,based on decisions that have already been made,will be incurred in the future.
C)opportunity cost that is fixed in the short run.
D)cost that has been incurred,but based on decisions that have already been made,will not be incurred in the future.
Q2) What is the target cost if target operating profit is 25% of sales?
A)$45.00
B)$135.00
C)$112.50
D)$37.50
Q3) When actual production is below practical capacity,there is unused capacity in the distribution function but not in the manufacturing function.
A)True
B)False
Q4) Many companies use life-cycle budgeting to determine target prices.
A)True
B)False
9
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Chapter 8: Activity-Based Management and Activity-Based Costing
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230 Verified Questions
230 Flashcards
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Sample Questions
Q1) ________ costs support the organisation as a whole.
A)Batch-level
B)Organisation-sustaining
C)Product-sustaining
D)Unit-level
Q2) Which of the following is a sign that an ABC system may be useful?
A)Operations staff agrees with accountants about the costs of manufacturing and marketing products and services
B)There are small amounts of indirect costs
C)Products make diverse demands on resources because of differences in volume,process steps,batch size or complexity
D)Products a company is less suited to produce and sell show small profits
Q3) Managers also need to update cost drivers and cost-driver rates:
A)once.
B)annually.
C)twice.
D)regularly.
Q4) Costing systems with multiple cost pools are considered ABC systems.
A)True
B)False
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Chapter 9: Pricing and Customer Profitability
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171 Verified Questions
171 Flashcards
Source URL: https://quizplus.com/quiz/70850
Sample Questions
Q1) Managers who utilise customer profitability charts should drop customers that generate a negative customer operating profit,since dropping an unprofitable customer will automatically cause overall income to increase.
A)True
B)False
Q2) The cost of producing a product:
A)in highly competitive markets controls pricing.
B)is an important influence on pricing.
C)affects the willingness of a company to supply a product.
D)for pricing decisions includes manufacturing costs,but not product design costs.
Q3) Which of the following reflects price discrimination?
A)Charging different prices to different customers or clients for the same products or services
B)Charging different prices according to quantity amounts
C)Setting different prices for different products
D)Using variable costing for some products and full costing for other products when setting prices
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11
Chapter 10: Decision Making and Relevant Information
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211 Verified Questions
211 Flashcards
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Sample Questions
Q1) When are costs relevant to a particular decision?
A)If they are fixed costs
B)If they differ across the alternatives being considered
C)If they are variable costs
D)If they remain unchanged across the alternatives being considered
Q2) Depreciation allocated to a product line is a relevant cost when deciding to discontinue that product.
A)True
B)False
Q3) Deciding to use a resource in a particular way causes a manager to forgo the opportunity to use the resource in optional ways.
A)True
B)False
Q4) Historical costs are helpful:
A)for making future predictions.
B)because they are quantitative.
C)for decision making.
D)None of these answers are correct.
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Chapter 11: Budgeting, Management Control and Responsibility Accounting
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215 Verified Questions
215 Flashcards
Source URL: https://quizplus.com/quiz/70852
Sample Questions
Q1) Molonglo Industries produces two products,Deluxe and Supreme.Molonglo expects to sell 10 000 units of product Supreme and to have an inventory of 2000 units of Supreme on hand at the end of the period.Currently,Molonglo has 800 units of Supreme on hand.Supreme requires two labour operations,moulding and polishing.Each unit of Supreme requires one hour of moulding and two hours of polishing.The direct labour rate for moulding is $20 per moulding hour and the direct labour rate for polishing is $25 per polishing hour.The expected number of hours of direct labour for Supreme is:
A)17 600 hours of moulding;8800 hours of polishing.
B)11 200 hours of moulding;22 400 hours of polishing.
C)8800 hours of moulding;17 600 hours of polishing.
D)22 400 hours of moulding;11 200 hours of polishing.
Q2) On the 2018 budgeted income statement,what amount will be reported for sales?
A)$312 000
B)$300 000
C)$246 000
D)$318 000
Q3) Activity-based budgeting and kaizen budgeting are really equivalent in meaning.
A)True
B)False
Page 13
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Chapter 12: Flexible Budgets, Direct Cost Variances and Management Control
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246 Verified Questions
246 Flashcards
Source URL: https://quizplus.com/quiz/70853
Sample Questions
Q1) For May,Hobart will report a(n):
A)favourable sales-mix variance.
B)unfavourable sales-volume variance.
C)favourable sales-volume variance.
D)unfavourable sales-mix variance.
Q2) A variance within an acceptable range is considered to be an 'in control occurrence' and calls for investigation or action by managers.
A)True
B)False
Q3) Benchmarking is the continuous process of measuring products,services,and activities against the best possible levels of performance,either inside or outside the organisation.
A)True
B)False
Q4) The flexible-budget variance for variable costs is:
A)$21 000 favourable.
B)$41 000 unfavourable.
C)$13 583 unfavourable.
D)$41 000 favourable.
14
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Chapter 13: Flexible Budgets, Overhead Cost Variances and Management Control
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170 Verified Questions
170 Flashcards
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Sample Questions
Q1) The budget period for fixed overhead costs is typically ____ months to help smooth out seasonal effects.
A)6
B)3
C)24
D)12
Q2) For calculating the costs of products and services,a standard costing system:
A)does not have to keep track of actual costs.
B)uses standard costs to determine the cost of products.
C)only requires a simple recording system.
D)All of these answers are correct.
Q3) The term cost-allocation base can be used interchangeably with __________ rate when dealing with indirect costs.
A)cost-driver
B)activity
C)allocation
D)target
Q4) Overhead costs are a major part of costs for most companies.
A)True
B)False
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Chapter 14: Allocation of Support-Department Costs,
Common Costs and Revenues
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137 Verified Questions
137 Flashcards
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Sample Questions
Q1) Which of the following methods is LEAST likely to cause disputes among product managers?
A)The direct revenue-allocation method
B)Incremental revenue-allocation method
C)Stand-alone revenue-allocation method
D)All of these answers are correct
Q2) Using the incremental method,what amount of revenue will be allocated to Math Fun in the package that contains all three products? Assume Reading Fun is the primary product,followed by Math Fun,and then Science.
A)$50.67
B)$65.00
C)$45.60
D)$48.25
Q3) Why would businesses want to sell bundled products? What benefits,if any,are there for the consumer?
Page 16
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Chapter 15: Strategy Formation, Strategic Control and the Balanced Scorecard
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157 Verified Questions
157 Flashcards
Source URL: https://quizplus.com/quiz/70856
Sample Questions
Q1) What is rightsizing another term for?
A)Price recovery analysis
B)Growth management
C)Downsizing
D)Cost recovery analysis
Q2) When analysing the change in operating profit,the strategy component of productivity will increase when:
A)less capacity is used in the current year to produce the same output as in the previous year.
B)selling prices are increased.
C)quality is enhanced.
D)more units are produced and sold.
Q3) Which of the following need to be clarified FIRST for successful balanced scorecard implementation?
A)Elements that pertain to value-added aspects of the business
B)Owner's expectations about return on investment
C)Objectives of all four balanced scorecard measurement perspectives
D)Organisation's vision and strategy
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Chapter 16: Quality, Time and the Balanced Scorecard
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120 Verified Questions
120 Flashcards
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Sample Questions
Q1) How much will external failure costs change assuming 800 000 units of materials are received and that product failures with customers are cut in half with the new receiving method?
A)$500 000 decrease
B)$200 000 decrease
C)$10 000 increase
D)$320 000 decrease
Q2) Without financial quality measures,companies could be spending more money on improving non-financial quality measures than it is worth.
A)True
B)False
Q3) When demand uncertainty is ________ ,some unused capacity is desirable.
A)low
B)non-existent
C)average
D)high
Q4) Two important drivers of time are limited capacity and bottlenecks.
A)True
B)False
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Chapter 17: Inventory Management, Just-In-Time and Simplified Costing Methods
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126 Verified Questions
126 Flashcards
Source URL: https://quizplus.com/quiz/70858
Sample Questions
Q1) Lean accounting is a costing method that supports creating value for the customer by costing the entire value stream,not individual products or departments,thereby eliminating waste in the accounting process.
A)True
B)False
Q2) In managing inventory,the costs that result when features and characteristics of a product or service are not in conformance with the specifications are known as:
A)inspection costs.
B)design costs.
C)costs of quality.
D)purchasing costs.
Q3) The major relevant costs in maintaining safety stock are: Variant question
A)ordering costs and stockout costs.
B)stockout costs and carrying costs.
C)ordering costs and purchasing costs.
D)carrying costs and purchasing costs.
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Page 19
Chapter 18: Capital Budgeting and Cost Analysis
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140 Verified Questions
140 Flashcards
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Sample Questions
Q1) The 'determine possible courses of action and consider the consequences of each' stage of the capital budgeting process consists of forecasting all potential net profit additions that are attributable to the alternative projects.
A)True
B)False
Q2) What is the net present value of the investment,assuming the required rate of return is 24%? Would the company want to purchase the new machine?
A)$32 800;no
B)$(5240);no
C)$(32 800);yes
D)$5240;yes
Q3) The 'identify the problem' stage of capital budgeting gathers information from all parts of the value chain to evaluate alternative projects.
A)True
B)False
Q4) Discounted cash flow methods focus on operating profit.
A)True
B)False
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Chapter 19: Management Control Systems, Transfer Pricing and
Multinational Considerations
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140 Verified Questions
140 Flashcards
Source URL: https://quizplus.com/quiz/70860
Sample Questions
Q1) Improving corporate control is an important advantage of decentralised operations.
A)True
B)False
Q2) Absenteeism would be an example of a Balanced Scorecard control measure from a customer perspective.
A)True
B)False
Q3) What is the market-based transfer price per compressor from the Compressor Division to the Assembly Division?
A)$54.50
B)$34.00
C)$69.50
D)$77
Q4) Market-based transfer pricing and cost-based transfer pricing are the only two methods for determining transfer prices.
A)True
B)False
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Chapter 20: Performance Measurement, Compensation and
Multinational Considerations
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140 Verified Questions
140 Flashcards
Source URL: https://quizplus.com/quiz/70861
Sample Questions
Q1) In an Economic Value Added (EVA)calculation,the measure of the invested capital for a division would be that division's assets minus that division's liabilities.
A)True
B)False
Q2) Many common performance measures,such as customer satisfaction,rely on internal financial accounting information.
A)True
B)False
Q3) What is Beta Division's investment turnover?
A)0.15
B)1.5
C)2.4
D)0.67
Q4) An important consideration in designing compensation arrangements is the trade-off between creating incentives and imposing risks.
A)True
B)False
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Chapter 21: Measuring and Reporting Sustainability
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50 Verified Questions
50 Flashcards
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Sample Questions
Q1) 'Learning for sustainability' is the term used to describe the ongoing learning that must go on within an organisation to achieve sustainability.
A)True
B)False
Q2) What is the externalised cost of electricity generation referred to as?
A)The cost of constructing the plant
B)The cost of buying coal
C)The cost of purchasing water to cool the plant
D)None of the above are externalised costs.
Q3) What is the world's most widely used sustainability reporting framework referred to as?
A)The Global Reporting Initiative
B)The International Standards for Environmental Management
C)The Corporate Social Responsibility Reporting Framework
D)The Australian Sustainability Index
Q4) 'Green' products may achieve a premium in the market place.
A)True
B)False
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