Accounting for Managers
Final Test Solutions
Course Introduction
Accounting for Managers introduces the fundamental concepts and techniques of accounting that are essential for effective managerial decision-making. The course explores the preparation, analysis, and interpretation of financial statements, emphasizing how accounting information supports planning, control, and strategic choices within organizations. Topics include cost behavior, budgeting, performance evaluation, and the use of accounting data in operational and strategic contexts. Designed for non-accounting majors, the course equips students with the financial literacy needed to communicate with accounting professionals and to utilize accounting information in management roles.
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) Which of the following statements is true when referring to fixed costs?
A) Committed fixed costs arise from the annual decisions by management.
B) As volume increases, unit fixed cost and total fixed cost will change.
C) Fixed costs increase in total throughout the relevant range.
D) Discretionary fixed costs can often be reduced to zero for short periods of time without seriously impairing the long-run goals of the company.
Answer: D
Q2) In making the decision to invest in the model 240 machine,the opportunity cost was:
A) $545,000
B) $450,000
C) $532,000
D) $527,000
Answer: C
Q3) Product costs that have become expenses can be found in:
A) period costs.
B) selling expenses.
C) cost of goods sold.
D) administrative expenses.
Answer: C
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Page 3
Chapter 2: Job-Order Costing: Calculating Unit Production Costs
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Sample Questions
Q1) The total job cost for Job P951 is closest to:
A) $4,540
B) $4,755
C) $1,295
D) $5,295
Answer: D
Q2) Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments.Further assume that the company uses a markup of 20% on manufacturing cost to establish selling prices.The calculated selling price for Job C is closest to:
A) $87,666
B) $68,920
C) $13,784
D) $82,704
Answer: D
Q3) An employee time ticket is an hour-by-hour summary of the employee's activities throughout the day.
A)True
B)False
Answer: True
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Chapter 3: Job-Order Costing: Cost Flows and External Reporting
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255 Verified Questions
255 Flashcards
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Sample Questions
Q1) The cost of goods sold for June after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to:
A) $301,410
B) $299,790
C) $299,600
D) $301,600
Answer: B
Q2) During September at Renfro Corporation,$65,000 of raw materials were requisitioned from the storeroom for use in production.These raw materials included both direct and indirect materials.The indirect materials totaled $4,000.The journal entry to record this requisition would include a debit to Manufacturing Overhead of:
A) $65,000
B) $4,000
C) $0
D) $61,000
Answer: B
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Page 5
Chapter 4: Process Costing
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Sample Questions
Q1) In the department's cost reconciliation report for August,the cost of units transferred out of the department would be:
A) $294,000
B) $307,000
C) $281,000
D) $270,000
Q2) The units in beginning work in process inventory plus the units started into production must equal the units transferred out of the department plus the units in ending work in process inventory.
A)True
B)False
Q3) The cost per equivalent unit for materials for the month in the first processing department is closest to:
A) $16.31
B) $21.25
C) $14.48
D) $15.88
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Chapter 5: Cost-Volume-Profit Relationships
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260 Flashcards
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Sample Questions
Q1) If the company increases its unit sales volume by 3% without increasing its fixed expenses,then total net operating income should be closest to:
A) $459,380
B) $453,667
C) $13,380
D) $482,660
Q2) Gayne Corporation's contribution margin ratio is 12% and its fixed monthly expenses are $84,000.If the company's sales for a month are $738,000,what is the best estimate of the company's net operating income? Assume that the fixed monthly expenses do not change.
A) $565,440
B) $654,000
C) $88,560
D) $4,560
Q3) The degree of operating leverage is computed by dividing sales by the contribution margin.
A)True
B)False
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7
Chapter 6: Variable Costing and Segment Reporting: Tools for Management
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Sample Questions
Q1) What was the absorption costing net operating income this year?
A) $80,000
B) $100,500
C) $108,000
D) $112,200
Q2) The net operating income (loss)under absorption costing in Year 2 is closest to:
A) $31,000
B) $26,000
C) $132,000
D) $92,000
Q3) The net operating income (loss)under variable costing in Year 1 is closest to:
A) $174,000
B) $37,000
C) $150,000
D) $16,000
Q4) Sales in Store J totaled:
A) $400,000
B) $250,000
C) $150,000
D) $100,000
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Chapter 7: Super-Variable Costing
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Sample Questions
Q1) The unit product cost under super-variable costing is:
A) $97 per unit
B) $191 per unit
C) $224 per unit
D) $114 per unit
Q2) The net operating income for the year under super-variable costing is:
A) $1,593,000
B) $1,023,000
C) $1,978,000
D) $1,483,000
Q3) The net operating income for the year under super-variable costing is:
A) $799,000
B) $229,000
C) $714,000
D) $1,184,000
Q4) The unit product cost under super-variable costing is:
A) $117 per unit
B) $215 per unit
C) $94 per unit
D) $181 per unit
Page 9
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Chapter 8: Master Budgeting
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Sample Questions
Q1) If 41,920 pounds of raw materials are required for production in September,then the budgeted raw material purchases for August is closest to:
A) 57,056 pounds
B) 44,480 pounds
C) 43,712 pounds
D) 70,400 pounds
Q2) The cost of December merchandise purchases would be:
A) $255,000
B) $139,500
C) $235,500
D) $240,000
Q3) One disadvantage of budgeting is that budgeting makes it more difficult to coordinate the activities of the entire organization.
A)True
B)False
Q4) A benefit from budgeting is that it forces managers to think about and plan for the future.
A)True
B)False
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Chapter 9: Flexible Budgets and Performance Analysis
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Sample Questions
Q1) The manufacturing overhead in the planning budget for March would be closest to:
A) $534,920
B) $558,610
C) $536,200
D) $560,028
Q2) The "Employee salaries and wages" in the flexible budget for October would have been closest to:
A) $85,800
B) $84,000
C) $74,000
D) $80,800
Q3) The net operating income in the flexible budget for January would be closest to:
A) $13,878
B) $13,788
C) $12,963
D) $13,070
Q4) In a flexible budget,when the activity declines,the total variable cost also declines.
A)True
B)False
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Chapter 10: Standard Costs and Variances
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Sample Questions
Q1) The labor efficiency variance for January is:
A) $4,246 U
B) $4,246 F
C) $4,400 U
D) $4,400 F
Q2) The materials quantity variance for July is:
A) $870 U
B) $1,044 U
C) $870 F
D) $1,044 F
Q3) The materials quantity variance for February is:
A) $3,277 F
B) $3,390 U
C) $3,390 F
D) $3,277 U
Q4) The variable overhead rate variance for July is:
A) $213 F
B) $216 F
C) $216 U
D) $213 U
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Chapter 11: Performance Measurement in Decentralized Organizations
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Sample Questions
Q1) If net operating income is $70,000,average operating assets are $250,000,and the minimum required rate of return is 16%,what is the residual income?
A) $11,200
B) $40,000
C) $110,000
D) $30,000
Q2) A segment of a business responsible for both revenues and expenses would be called:
A) a cost center.
B) an investment center.
C) a profit center.
D) residual income.
Q3) Which of the following would be considered an operating asset in return on investment computations?
A) Land being held for plant expansion.
B) Treasury stock.
C) Accounts receivable.
D) Common stock.
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Chapter 12: Differential Analysis: The Key to Decision Making
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Sample Questions
Q1) Sunk costs are never relevant in decision making.
A)True
B)False
Q2) In a sell or process further decision,consider the following costs:
I.A variable production cost incurred prior to split-off.
II.A variable production cost incurred after split-off.
III.An avoidable fixed production cost incurred after split-off. Which of the above costs is (are)not relevant in a decision regarding whether the product should be processed further?
A) Only I
B) Only III
C) Only I and II
D) Only I and III
Q3) What is the financial advantage (disadvantage)for the company from processing one batch of sugar cane into the end products industrial fiber and molasses?
A) ($4) per batch
B) ($114) per batch
C) $18 per batch
D) $14 per batch
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Page 14
Chapter 13: Capital Budgeting Decisions
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Sample Questions
Q1) The simple rate of return would be closest to:
A) 30.0%
B) 17.5%
C) 18.75%
D) 12.5%
Q2) If the new bus is purchased,the present value of the annual cash operating costs associated with this alternative is closest to:
A) $(54,800)
B) $(36,500)
C) $(16,200)
D) $(42,800)
Q3) The salvage value of new equipment should not be considered when using the internal rate of return method to evaluate a project.
A)True
B)False
Q4) A shorter payback period does not necessarily mean that one investment is more desirable than another.
A)True
B)False
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Chapter 14: Statement of Cash Flows
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Sample Questions
Q1) Paying wages and salaries to employees is classified as a cash outflow in the operating activities section of the statement of cash flows.
A)True
B)False
Q2) The net cash provided by (used in)financing activities for the year was:
A) $(18)
B) $5
C) $(5)
D) $8
Q3) Cash received from the sale of equipment the company had used in its own operations would be considered an operating activity on a statement of cash flows.
A)True
B)False
Q4) Free cash flow will increase if a company increases its accounts payable balance by delaying payments to suppliers.
A)True
B)False
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16
Chapter 15: Financial Statement Analysis
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Sample Questions
Q1) The company's dividend yield ratio for Year 2 is closest to:
A) 21.1%
B) 2.6%
C) 1.6%
D) 14.7%
Q2) Liquidity refers to how quickly an asset can be converted into cash.
A)True
B)False
Q3) The company's total asset turnover for Year 2 is closest to:
A) 0.99
B) 0.19
C) 5.32
D) 1.01
Q4) Selling used equipment at book value for cash will:
A) increase working capital.
B) decrease working capital.
C) decrease the debt-to-equity ratio.
D) increase net income.
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Page 17
Chapter 16: Cost of Quality
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Sample Questions
Q1) Rigoletto Company's quality cost report is to be based on the following data: \(\begin{array}{lr}
\text {Lost sales due to poor quality. }&\$24,000\\
\text {Test and inspection of incoming materials. }&\$94,000\\
\text {Rework labor and overhead. }&\$55,000\\
\text {Test and inspection of in-process goods }&\$32,000\\
\text {Product recalls }&\$47,000\\
\text {Quality data gathering, analysis, and reporting }&\$15,000\\
\text { Disposal of defective products. }&\$88,000\\
\text {Maintenance of test equipment. }&\$58,000\\
\text {Quality engineering }&\$98,000\\
\end{array}\)
Required:
Prepare a Quality Cost Report in good form with separate sections for prevention costs,appraisal costs,internal failure costs,and external failure costs.
Q2) What would be the total appraisal cost appearing on the quality cost report?
A) $130,000
B) $152,000
C) $146,000
D) $219,000
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Page 18
Chapter 17: Activity-Based Absorption Costing
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Sample Questions
Q1) Under the traditional costing system,what would be the selling price of one unit of Model #36?
A) $2,536
B) $2,712
C) $4,080
D) $5,506
Q2) The unit product cost of product P93S under the company's traditional costing system is closest to:
A) $68.48
B) $63.26
C) $30.70
D) $40.30
Q3) 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
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19
Chapter 18: The Predetermined Overhead Rate and Capacity
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Sample Questions
Q1) The management of Kotek Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity rather than on the estimated amount of activity for the year.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 8,000 machine-hours.In addition,capacity is 10,000 machine-hours and the actual activity for the year is 8,700 machine-hours.All of the manufacturing overhead is fixed and is $6,400 per year.Job L77S,which required 220 machine-hours,is one of the jobs worked on during the year.
Required:
a.Determine the predetermined overhead rate if the predetermined overhead rate is based on activity at capacity.
b.Determine how much overhead would be applied to Job L77S if the predetermined overhead rate is based on activity at capacity.
c.Determine the cost of unused capacity for the year if the predetermined overhead rate is based on activity at capacity.
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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,expired insurance coverage on factory equipment is recorded as a decrease in the Prepaid Insurance column and as a decrease in the Retained Earnings column.
A)True
B)False
Q2) In the Excel,or spreadsheet,approach to recording financial transactions,the cost of goods sold is recorded as a decrease in the Finished Goods column and as a decrease in the Retained Earnings column.
A)True
B)False
Q3) In the Excel,or spreadsheet,approach to recording financial transactions,factory depreciation is recorded as a decrease in the Property,Plant,and Equipment column and as a decrease in the Retained Earnings column.
A)True
B)False
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Chapter 20: Fifo Method
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Sample Questions
Q1) In October,one of the processing departments at Ingersoll Corporation had beginning work in process inventory of $16,000 and ending work in process inventory of $29,000.During the month,$191,000 of costs were added to production.The company uses the FIFO method in its process costing system.
Required:
Construct a cost reconciliation report for the department for the month of October.
Q2) Using the FIFO method,the equivalent units for conversion for March would be:
A) 66,250
B) 67,000
C) 64,250
D) 67,750
Q3) Using the weighted-average method,the equivalent units for materials for March would be:
A) 66,000
B) 68,000
C) 70,250
D) 71,000
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Chapter 21: Service Department Allocations
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Sample Questions
Q1) The order in which the costs of service departments are allocated will affect the amounts allocated to an operating department when the direct method is used.
A)True
B)False
Q2) The total Finishing Department cost after allocations is closest to:
A) $443,342
B) $433,660
C) $441,102
D) $442,940
Q3) The total Fabrication Department cost after service department allocations is closest to:
A) $270,110
B) $277,969
C) $280,623
D) $274,308
Q4) The step-down method ultimately results in less total cost being allocated to operating departments than the direct method.
A)True
B)False
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Chapter 22: Analyzing Mixed Costs
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Sample Questions
Q1) Using the high-low method of analysis,the estimated monthly fixed component of lubrication cost is closest to:
A) $1,120
B) $1,140
C) $1,170
D) $1,130
Q2) Using the least-squares regression method,the estimate of the variable component of inspection cost per unit produced is closest to:
A) $22.80
B) $8.82
C) $8.27
D) $8.78
Q3) 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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24
Chapter 23: Time-Driven Activity-Based Costing: a
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Sample Questions
Q1) On the Customer Cost Analysis report in time-driven activity-based costing,the total cost assigned to Customer A would be closest to:
A) $248.00
B) $453.60
C) $187.20
D) $18.40
Q2) On the Capacity Analysis report in time-driven activity based costing,the "unused capacity in minutes" would be closest to:
A) 864,000 minutes
B) 635,870 minutes
C) 407,740 minutes
D) 1,320,260 minutes
Q3) On the Customer Cost Analysis report in time-driven activity-based costing,the total cost assigned to Customer R would be closest to:
A) $0.00
B) $108.72
C) $45.36
D) $63.36
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Chapter 24: Predetermined Overhead Rates and Overhead
Analysis in a Standard Costing System
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Sample Questions
Q1) The predetermined overhead rate is closest to:
A) $9.39 per labor-hour
B) $9.22 per labor-hour
C) $13.15 per labor-hour
D) $12.91 per labor-hour
Q2) An unfavorable volume variance means that the company operated at an activity level greater than that planned for the period.
A)True
B)False
Q3) The budget variance for fixed manufacturing overhead is the difference between actual fixed manufacturing overhead costs incurred and the amount of fixed manufacturing overhead applied to work in process.
A)True
B)False
Q4) The fixed component of the predetermined overhead rate is closest to:
A) $8.25 per machine-hour
B) $12.38 per machine-hour
C) $5.69 per machine-hour
D) $8.54 per machine-hour
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Chapter 25: Standard Cost Systems: a Financial Reporting
Perspective Using Microsoft Excel
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Sample Questions
Q1) When Raw Materials,Work in Process,and Finished Goods are recorded and carried at their standard cost,the actual prices paid for inputs and the actual quantities of inputs that are used in production affect the costs recorded in the inventory accounts.
A)True
B)False
Q2) When recording the raw materials used in production in transaction (b)above,the Raw Materials inventory account will increase (decrease)by:
A) $1,366,439
B) $1,267,830
C) ($1,366,439)
D) ($1,267,830)
Q3) The adjusted Cost of Goods Sold after closing all of the variances to Cost of Goods Sold will be closest to:
A) $784,496
B) $1,160,621
C) $938,985
D) $1,093,474
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Chapter 26: Transfer Pricing
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Sample Questions
Q1) 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
Q2) Assume that the Detector Division is selling all of the detectors it can produce to outside customers.What should be the minimum acceptable transfer price for the detectors from the standpoint of the Detector Division?
A) $32 per unit
B) $98 per unit
C) $91 per unit
D) $83 per unit
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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28
Chapter 27: Service Department Charges
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Sample Questions
Q1) For performance evaluation purposes,the fixed costs of a service department should be charged to operating departments using:
A) actual fixed costs and the budgeted level of activity for the period.
B) budgeted fixed costs and the actual level of activity for the period.
C) budgeted fixed costs and the peak-period or long-run average servicing capacity.
D) actual fixed costs and the peak-period or long-run average servicing capacity.
Q2) For performance evaluation purposes,how much of the $255,000 of actual variable maintenance cost should be charged to the Assembly Department at the end of the year just ended?
A) $182,143
B) $175,312
C) $165,000
D) $178,500
Q3) In service department cost allocations,sales dollars should be used as an allocation base whenever possible.
A)True
B)False
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29
Chapter 28: Pricing Decisions
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Sample Questions
Q1) From a value-based pricing standpoint what range of possible prices should Blauvelt consider when setting a price for GZ-29?
A) $245,000 Value-based price $370,000
B) $370,000 Value-based price $519,000
C) $149,000 Value-based price $519,000
D) $149,000 Value-based price $245,000
Q2) The markup percentage on the new product would be closest to:
A) 51.0%
B) 12.5%
C) 24.0%
D) 59.5%
Q3) From a value-based pricing standpoint what is the reference value that Tavis should consider when pricing model FI-73?
A) $155,000
B) $109,000
C) $187,000
D) $327,000
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Chapter 29: The Concept of Present Value
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Sample Questions
Q1) (Ignore income taxes in this problem.)A company wants to have $40,000 at the end of a five-year period through investment of a single sum now.How much needs to be invested in order to have the desired sum in five years,if the money can be invested at 10%:
A) $10,551
B) $8,000
C) $24,840
D) $12,882
Q2) The present value of a cash flow will never be greater than the future dollar amount of the cash flow.
A)True
B)False
Q3) The higher the discount rate,the higher the present value of a given future cash flow. A)True
B)False
Q4) The present value of a cash flow increases as it moves further into the future. A)True
B)False
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Chapter 30: Income Taxes and the Present Value Method
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Sample Questions
Q1) Shanks Corporation is considering a capital budgeting project that involves investing $600,000 in equipment that would have a useful life of 3 years and zero salvage value.The company would also need to invest $20,000 immediately in working capital which would be released for use elsewhere at the end of the project in 3 years.The net annual operating cash inflow,which is the difference between the incremental sales revenue and incremental cash operating expenses,would be $300,000 per year.The project would require a one-time renovation expense of $60,000 at the end of year 2.The company uses straight-line depreciation and the depreciation expense on the equipment would be $200,000 per year.Assume cash flows occur at the end of the year except for the initial investments.The company takes income taxes into account in its capital budgeting.The income tax rate is 35%.The after-tax discount rate is 15%. Required:
Determine the net present value of the project.Show your work!
Q2) The net present value of the entire project is closest to:
A) $297,126
B) $208,000
C) $97,126
D) $178,690
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Page 32
Chapter 31: the Direct Method of Determining the Net Cash
Provided by Operating Activities
Available Study Resources on Quizplus for this Chatper
56 Verified Questions
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Source URL: https://quizplus.com/quiz/61651
Sample Questions
Q1) The net cash provided by (used in)investing activities for the year was:
A) $57
B) $(57)
C) $33
D) $(33)
Q2) Using the direct method,sales adjusted to a cash basis would be:
A) $300,000
B) $302,000
C) $298,000
D) $305,000
Q3) The net cash provided by (used in)operating activities for the year was:
A) $168
B) $8
C) $152
D) $229
Q4) If accounts receivable increase during a period,then the amount of cash collected from customers will be less than the amount of sales reported on the income statement for the period.
A)True B)False
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