Accounting for Managers Test Preparation
Course Introduction
Accounting for Managers introduces the fundamental principles of financial and managerial accounting tailored for those in management roles. The course emphasizes the interpretation and use of accounting information for decision-making, planning, and control within organizations. Topics include the preparation and analysis of financial statements, cost behavior, budgeting, performance evaluation, and strategic implications of accounting data. By the end of the course, students will be able to critically assess accounting reports and apply accounting concepts to support effective management and organizational success.
Recommended Textbook Management Accounting 6th Canadian Edition by Charles T. Horngren
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14 Chapters
1457 Verified Questions
1457 Flashcards
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Page 2
Chapter 1: Management Accounting and Management Decisions
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90 Verified Questions
90 Flashcards
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Sample Questions
Q1) An example of a line department at a jewelry manufacturer is the A) accounting department.
B) finance department.
C) maintenance department.
D) sales department.
Answer: D
Q2) Deviations from plans.
Answer: Variances
Q3) The largest Canadian professional organization of accountants whose major interest is management accounting.
Answer: Society of Management Accountants
Q4) A survey of managers selected which of the following business areas as the most common starting-point for future managers?
A) Accounting.
B) Finance.
C) Legal environment of business.
D) Computers in business.
Answer: A
Q5) Authority exerted downward over subordinates.
Answer: Line authority
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Chapter 2: Cost Behaviour and Cost-Volume Relationships
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96 Verified Questions
96 Flashcards
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Sample Questions
Q1) A variable cost varies per unit.
A)True
B)False
Answer: False
Q2) The contribution-margin ratio is
A) 64.3 percent.
B) 55.6 percent.
C) 35.7 percent.
D) 44.4 percent.
Answer: C
Q3) A cost that is not immediately affected by changes in the cost driver.
Answer: Fixed cost
Q4) The variable cost percentage plus the contribution margin percentage must equal 100 percent.
A)True
B)False
Answer: True
Q5) A firm's ratio of fixed and variable costs. Answer: Operating leverage
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Chapter 3: Measurement of Cost Behaviour
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97 Verified Questions
97 Flashcards
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Sample Questions
Q1) Costs that change abruptly at intervals of activity because the resources and their costs come in indivisible chunks are called
A) mixed costs.
B) variable costs.
C) fixed costs.
D) step costs.
Answer: D
Q2) ________ measures a cost function objectively (with statistics rather than human eyesight) using all the data available.
A) Engineering analysis
B) Account analysis
C) The visual-fit method
D) The least-squares regression method
Answer: D
Q3) Cost behaviour can be graphed with a straight line when a cost changes proportionately with changes in a cost driver.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Cost Management Systems
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134 Verified Questions
134 Flashcards
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Sample Questions
Q1) Fixed manufacturing overhead is excluded from the cost of products under absorption costing.
A)True
B)False
Q2) Cost accounting system typically includes two processes, cost accumulation and cost determination.
A)True
B)False
Q3) Which of the following is NOT a period cost?
A) Wages of clerical staff
B) Advertising expense
C) Factory supplies used
D) Amortization on salesperson's car
Q4) Direct costs can be identified specifically and exclusively with a given cost objective in an economically feasible way.
A)True
B)False
Q5) Prime costs include direct labour and factory overhead.
A)True
B)False
Page 6
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Chapter 5: Cost Allocation and Activity-Based Costing Systems
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128 Verified Questions
128 Flashcards
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Sample Questions
Q1) If activity-based costing is used, then the total amount of overhead allocated to the deluxe model would be
A) $45,670.
B) $74,330.
C) $120,000.
D) $ 80,000.
Q2) Packaging is an example of a service department.
A)True
B)False
Q3) Two dimensions are important in flexible production operations:
A) material flexibility and employee flexibility.
B) employee flexibility and facilities flexibility.
C) supplier flexibility and customer flexibility.
D) facilities flexibility and supplier flexibility.
Q4) The amount of variable maintenance costs allocated to the Mixing Department should be
A) $30,000.
B) $36,000.
C) $24,000.
D) $31,250.
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Chapter 6: Job-Costing Systems
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88 Verified Questions
88 Flashcards
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Sample Questions
Q1) Which of the following industries is most likely to NOT use a process costing system?
A) Chemicals
B) Plastics
C) Furniture
D) Meat packing
Q2) The ending inventory of work in process is
A) $260,000.
B) $254,000.
C) $128,000.
D) $72,000.
Q3) The budgeted factory-overhead rate using machine hours as the cost driver is
A) $8.00.
B) $8.01.
C) $8.54.
D) $7.50.
Q4) A cost accumulation method that accumulates costs by processes or departments.
Q5) The overhead assigned to production using a predetermined overhead rate.
Q6) A variance that results when applied overhead is greater than the actual overhead cost incurred.
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Chapter 7: Process-Costing Systems
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82 Verified Questions
82 Flashcards
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Sample Questions
Q1) The total cost of units completed and transferred to Finishing is
A) $2,112,000.
B) $2,140,000.
C) $1,848,000.
D) $352,000.
Q2) Cost of goods transferred out is
A) $1,649,640.
B) $1,652,000.
C) $1,716,744.
D) $1,817,400.
Q3) The weighted-average process-costing method adds the cost of all work done in the current period to the
A) work done in the preceding period on the current period's beginning inventory of work-in-process.
B) the ending inventory of work-in-process.
C) all costs estimated to be incurred in the next department.
D) the work done in the preceding department on the current period's ending inventory of work-in-process.
Q4) The expression of a department's processing activity in terms of fully completed units.
Page 9
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Chapter 8: Relevant Information and Decision Making: Marketing Decisions
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Assuming Eagan Company can increase the selling price of product B to $21,000, all other information remaining constant, operating income will
A) decrease $ 2,000.
B) decrease $ 6,000.
C) increase $21,000.
D) increase $ 2,000.
Q2) Assuming product line B is discontinued and the space formerly used to produce product B is rented for $5,000 per year, operating income will A) increase $5,000.
B) increase $7,000.
C) increase $1,000.
D) decrease $1,000.
Q3) The contribution margin approach helps managers in pricing decisions because the relationships among variable costs, fixed costs and selling price changes are easier to show and understand.
A)True
B)False
Q4) The effect of price changes on sales volume.
Q5) Costs that will not continue if an ongoing operation is changed or deleted.
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Chapter 9: Relevant Information and Decision Making: Production
Decisions
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111 Verified Questions
111 Flashcards
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Sample Questions
Q1) The difference in total cost between two alternatives.
Q2) A relevant costing analysis that focuses on keeping or dropping a segment of a business.
Q3) A cost that has already been incurred and is irrelevant to the decision-making process.
Q4) Assume that Bovee can buy 10,000 units of the part from another producer for $112 each. The current facilities could be used to make 10,000 units of a product that has a contribution margin of $40 per unit. No additional fixed costs would be incurred. Bovee should
A) make the new product and buy the part to earn an extra $8 per unit contribution to profit.
B) continue to make the part to earn an extra $8 per unit contribution to profit.
C) continue to make the part to earn an extra $24 per unit contribution to profit.
D) make the new product and buy the part to earn an extra $24 per unit contribution to profit.
Q5) The maximum available contribution to profit foregone by using limited resources for a particular purpose.
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Chapter 10: Capital Budgeting Decisions
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116 Verified Questions
116 Flashcards
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Sample Questions
Q1) The factor used to convert future cash flow to its present value.
Q2) Tex Corporation trades in a class 10 (30%) asset during the current year. The opening UCC balance in the class 10 pool is $420,000. Tex trades in an asset for $25,000, which he sets off the $125,000 he pays for a new class 10 asset. The tax marginal rate is 35%. The nominal after-tax rate of return is 10%.
a. Calculate the UCC balance at the end of the year.
b. Calculate the tax shield on the trade in.
c. Calculate the NPV cash outflow on the trade in.
Q3) If a company pays taxes of 20 percent on their first $20,000 of pretax income, and 30 percent on any taxable income in excess of $20,000, what is the marginal tax rate if current pretax income is $45,000?
A) 20 percent
B) 30 percent
C) 25 percent
D) 39 percent
Q4) The difference between the present value of a project's cash inflows and the present value of its cash outflows.
Q5) The rate of return used to compute the present value of future cash flows.
Q6) A follow-up analysis of an investment decision.
Page 12
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Chapter 11: The Master Budget
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) The systematic varying of budget data input in order to determine the effects of each change on the budget is called operating analysis.
A)True
B)False
Q2) The budgeted total purchase cost of direct materials would be
A) $456,000.
B) $450,000.
C) $444,000.
D) $426,000.
Q3) The total cash disbursements in May for the purchase of merchandise should be
A) $138,400.
B) $148,580.
C) $ 69,200.
D) $128,160.
Q4) Participative budgeting is the active participation of all affected employees in the formulation of the budgets.
A)True
B)False
Q5) Producing forecasted financial statements for five- or ten-year periods.
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Chapter 12: Flexible Budgets and Variance Analysis
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106 Verified Questions
106 Flashcards
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Sample Questions
Q1) The fixed overhead volume variance is
A) $4,000 unfavourable.
B) $4,000 favourable.
C) $6,000 favourable
D) $6,000 favourable.
Q2) What are the total selling and administrative expenses for 10,000 units?
A) $120,000
B) $160,000
C) $720,000
D) $840,000
Q3) The cost most likely to be attained.
Q4) The total overhead variance in Case X was
A) $126,000 unfavourable.
B) $16,000 favourable.
C) $4,000 favourable.
D) $134,000 favourable.
Q5) The total flexible-budget variance can be broken down into a price variance and a usage variance.
A)True
B)False
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Chapter 13: Management Control Systems, the Balanced
Scorecard, and Responsibility Accounting
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94 Verified Questions
94 Flashcards
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Sample Questions
Q1) The statistical plot of measures of various product dimensions or attributes is called a
A) quality-control chart.
B) productivity chart.
C) cycle-time chart.
D) conventional chart.
Q2) What is Philips' revenues per employee in terms of 20X3 dollars?
A) $892.31
B) $615.39
C) $790.91
D) $545.45
Q3) Total quality management focuses on prevention of defects and on customer satisfaction.
A)True
B)False
Q4) Good performance measures will do all of the following EXCEPT
A) be subjective.
B) relate to the goals of the organization.
C) balance long-term and short-term concerns.
D) reflect the management of key activities.
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Chapter 14: Management Control in Decentralized Organizations
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103 Verified Questions
103 Flashcards
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Sample Questions
Q1) The highest price that Division Y would want to pay to Division A for the parts would be
A) $34.
B) $16.
C) $50.
D) $44.
Q2) The delegation of freedom to make decisions.
Q3) What is the capital turnover?
A) 1.600
B) 0.100
C) 0.625
D) None of the above.
Q4) What a firm must pay to acquire more capital, whether or not it actually has to acquire more capital to take on a project.
Q5) If operating income BEFORE amortization is $280,000, the rate of return on gross book value for 20X7 is
A) 18 percent.
B) 28 percent.
C) 45 percent.
D) 70 percent.
Page 16
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