Accounting Information for Management Practice Questions
Course Introduction
This course examines the role of accounting information in managerial decision-making processes. It focuses on the identification, analysis, and interpretation of relevant financial and non-financial data to support strategic planning, performance evaluation, and operational control within organizations. Topics include cost behavior, budgeting, variance analysis, and performance measurement techniques. The course emphasizes how managers use accounting information to solve business problems, allocate resources efficiently, and achieve organizational objectives.
Recommended Textbook MANAGERIAL ACCOUNTING Version 1.0 by Kurt
Heisinger and Joe Hoyle
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13 Chapters
878 Verified Questions
878 Flashcards
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Chapter 1: What Is Managerial Accounting
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83 Verified Questions
83 Flashcards
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Sample Questions
Q1) Controller
Answer: G
Q2) According to the IMA Statement of Ethical Professional Practice,competence means that each member has a responsibility for all the following except:
A)refrain from using confidential information for unethical or illegal advantage.
B)maintaining an appropriate level of professional expertise.
C)recognizing and communicating professional limitations.
D)performing professional duties in accordance with relevant laws,regulations and technical standards.
E)None of the above.
Answer: A
Q3) Manufacturing overhead consists of all costs related to the production process other than direct materials and direct labor.
A)True
B)False
Answer: True
Q4) Managerial accountant
Answer: F
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Chapter 2: How Is Job Costing Used to Track Production Costs
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44 Verified Questions
44 Flashcards
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Sample Questions
Q1) All of the following are ways that a job costing system used by a service organization may differ from one used by a manufacturing company except:
A)Costs in service organizations are typically tracked by customer rather than product.
B)Account names for service organizations are slightly different from those used by manufacturers.
C)Service organizations tend to use fewer materials.
D)The process of tracking labor for service organizations is completely different from the process used by manufacturers.
E)None of the answer choices is correct.
Answer: D
Q2) Underapplied overhead occurs when actual overhead costs are lower than overhead costs applied to jobs.
A)True
B)False
Answer: False
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Chapter 3: How Does an Organization Use Activity-Based
Costing to Allocate Overhead Costs
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Sample Questions
Q1) Refer to Exhibit 3-1.What is the total overhead cost applied to Thirst Quench using activity-based costing?
A)$52,868
B)$21,142
C)$34,322
D)$10,000
E)None of the answer choices is correct. Answer: B
Q2) Refer to Exhibit 3-2.What is the overhead rate for the processing activity?
A)$8.00
B)$3.60
C)$18.00
D)$6.00
E)None of the answer choices is correct. Answer: B
Q3) One important reason that managers allocate overhead costs to products is to promote the efficient use of resources.
A)True
B)False
Answer: True
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Chapter 4: How Is Process Costing Used to Track
Production Costs
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58 Flashcards
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Sample Questions
Q1) The number of equivalent units for any input (direct materials,direct labor,or overhead)cannot be greater than:
A)units completed.
B)units to account for.
C)units started.
D)total costs to account for.
E)None of the answer choices is correct.
Q2) Everlast Inc.had 12,000 units in WIP Inventory at December 1 that were 70% complete with respect to direct labor and overhead.During December,40,000 units were completed.On December 31,the 14,000 units in WIP Inventory were 30% complete as to direct labor and overhead.Direct materials are added at the beginning of the process.How many units were started during December?
A)42,000
B)66,000
C)38,000
D)32,000
E)None of the answer choices is correct.
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6
Chapter 5: How Do Organizations Identify Cost Behavior
Patterns
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69 Verified Questions
69 Flashcards
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Sample Questions
Q1) When 85,000 units are produced,the fixed cost is $10 per unit.Assuming our company is within the relevant range and we produce 120,000 units,our fixed costs will not remain at $10 per unit.
A)True
B)False
Q2) Refer to Exhibit 5-7.Which of the following amounts represents total operating profit?
A)$424,000
B)$600,000
C)$386,000
D)$404,000
E)None of the answer choices is correct.
Q3) All of the following are steps for using the scattergraph method except:
A)estimating the total fixed costs.
B)visually fitting a line to the data points,with at least one data point touching the line.
C)identifying the high and low activity data points.
D)plotting the data points for each period on a graph.
E)None of the answer choices is correct.
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Page 7
Chapter 6: How Is Cost-Volume-Profit Analysis Used for Decision Making
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79 Flashcards
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Sample Questions
Q1) The break-even point in sales dollars is the total sales dollars minus the total contribution margin.
A)True
B)False
Q2) Absorption costing treats fixed manufacturing overhead costs as product costs.
A)True
B)False
Q3) Refer to Exhibit 6-5.What would be the operating profit if the Charcoal Barbecue sales volume increases 100 units with a corresponding decrease of 100 units in Gas Barbecue sales?
A)$24,000
B)$75,000
C)$9,000
D)$105,000
E)None of the answer choices is correct.
Q4) A change in the sales mix will always decrease the break-even point.
A)True
B)False
Page 8
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Chapter 7: How Are Relevant Revenues and Costs Used to
Make Decisions
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76 Verified Questions
76 Flashcards
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Sample Questions
Q1) Individual product profitability will vary depending on which allocation method is chosen to allocate joint costs.
A)True
B)False
Q2) Refer to Exhibit 7-5.What is the amount of allocated fixed costs to be assigned to Customer Z?
A)$580,000
B)$420,000
C)$400,000
D)$600,000
E)None of the answer choices is correct.
Q3) Refer to Exhibit 7-7.What is the contribution margin per unit of constrained resource for the Light product?
A)$65
B)$100
C)$260
D)$17
E)None of the answer choices is correct.
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Chapter 8: How Is Capital Budgeting Used to Make Decisions
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Sample Questions
Q1) Landscaping Inc.would like to purchase a tractor for $425,000.The tractor is expected to have a life of five years,and no salvage value.Annual maintenance costs will total $12,500.Annual labor and material savings are predicted to be $118,750.The company's required rate of return is 8 percent. What is the payback period for this investment (round to the nearest month)?
A)3 years.
B)4 years.
C)5 years.
D)4 years,11 months.
E)None of the answer choices is correct.
Q2) A firm would never choose to accept a long-term investment proposal if the net present value is below zero.
A)True
B)False
Q3) Managers often rank investment opportunities by internal rate of return.
A)True
B)False
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Page 10
Chapter 9: How Are Operating Budgets Created
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Sample Questions
Q1) Refer to Exhibit 9-1.What will accounts receivable be at the end of February?
A)$600,000
B)$900,000
C)$1,500,000
D)$405,000
E)None of the answer choices is correct.
Q2) An operating budget is used to communicate plans to:
A)Customers.
B)Employees.
C)Shareholders.
D)Suppliers.
E)All of the answer choices are correct.
Q3) For most nonprofit organizations,the approved budget serves as the legal authority for expenditures.
A)True
B)False
Q4) Depreciation is deducted at the bottom of a manufacturing overhead budget to determine cash payments for overhead.
A)True
B)False
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Chapter 10: How Do Managers Evaluate Performance Using Cost Variance Analysis
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Sample Questions
Q1) Which of the following is true about managers who adhere to the concept of "management by exception"?
A)Managers will investigate only favorable variances.
B)Managers will investigate only variances that are significant.
C)Managers will investigate all favorable and unfavorable variances.
D)Managers will investigate only unfavorable variances.
E)None of the answer choices is correct.
Q2) Refer to Exhibit 10-5.What is the variable overhead efficiency variance for the product testing activity?
A)$8,000 favorable
B)$8,000 unfavorable
C)$3,800 unfavorable
D)$3,800 favorable
E)None of the answer choices is correct.
Q3) There is no efficiency variance for fixed manufacturing overhead since,by definition,fixed costs do not change with changes in the activity base.
A)True
B)False
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Chapter 11: How Do Managers Evaluate Performance in
Decentralized Organizations
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Sample Questions
Q1) Segments of an organization are often referred to as divisions.
A)True
B)False
Q2) Refer to Exhibit 11-2.Using the segmented income statements,what is the profit margin ratio for the Dish Washer Division (to the nearest hundredth of a percent)?
A)30.37%
B)50.74%
C)16.70%
D)49.26%
E)None of the answer choices is correct.
Q3) Refer to Exhibit 11-4.What is the ROI for the Chair Division (rounded to the nearest tenth of a percent)?
A)66.7%
B)14.0%
C)33.3%
D)9.3%
E)None of the answer choices is correct.
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Page 13
Chapter 12: How Is the Statement of Cash Flows Prepared and Used
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Sample Questions
Q1) Refer to Exhibit 12-3.Which of these would be deducted as part of the cash flows from financing activities
A)1,2,8,9,10,& 11
B)8,9,& 10
C)8 & 10
D)2,8,9,& 10
E)None of the answer choices is correct.
Q2) Where would cash payments for insurance appear in the statement of cash flows?
A)Operating activities
B)Financing activities
C)Investing activities
D)Capital activities
E)None of the answer choices is correct.
Q3) Refer to Exhibit 12-5.How will the change in accounts payable be reported in the operating activities
A)The decrease of $40,000 will be subtracted from net income.
B)The decrease of $40,000 will be subtracted from sales revenue.
C)The decrease of $40,000 will be added to sales revenue.
D)The decrease of $40,000 will be added to net income.
E)None of the answer choices is correct.
Page 14
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Chapter 13: How Do Managers Use Financial and
Nonfinancial Performance Measures
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Sample Questions
Q1) A relatively high price-earnings ratio indicates investors expect favorable future earnings.
A)True
B)False
Q2) In general,managers prefer the profit margin ratio to decrease over time.
A)True
B)False
Q3) Albany Company has net income before taxes of $90,000,interest expense of $36,000 and an income tax rate of 20%.Based on this information,the company's times interest earned ratio is:
A)12.5 times
B)2.5 times
C)3.5 times
D)4.0 times
E)None of the answer choices is correct.
Q4) The debt to assets ratio is calculated as total assets divided by total liabilities. A)True
B)False
Page 15
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