Advanced Managerial Accounting Final
Test Solutions
Course Introduction
Advanced Managerial Accounting delves into the strategic concepts and analytical techniques used by managers to make informed business decisions. The course covers topics such as activity-based costing, performance measurement, budgeting, variance analysis, cost allocation, and the use of accounting information in planning and controlling organizational activities. Emphasis is placed on interpreting complex financial data, identifying cost drivers, evaluating internal processes, and supporting long-term strategic objectives. Through case studies and real-world applications, students learn how advanced managerial accounting methods can enhance operational efficiency and support sustainable competitive advantages in various types of organizations.
Recommended Textbook
Managerial Accounting 2nd Edition by
Karen W. Braun
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14 Chapters
2698 Verified Questions
2698 Flashcards
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Chapter 1: Introduction to Managerial Accounting
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171 Verified Questions
171 Flashcards
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Sample Questions
Q1) Which person or group is NOT an employee of a corporation?
A)The CFO
B)A member of the audit committee
C)The Treasurer
D)The VP of manufacturing
Answer: B
Q2) Companies that wish to demonstrate their commitment to international quality standards may become certified by what organization?
A)SEC
B)IFRS
C)IMA
D)ISO
Answer: D
Q3) Not disclosing confidential information is an example of which ethical standard?
A)Competence
B)Confidentiality
C)Credibility
D)Integrity
Answer: B
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Page 3
Chapter 2: Building Blocks of Managerial Accounting
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211 Verified Questions
211 Flashcards
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Sample Questions
Q1) Which cost does NOT relate to part of the value chain for a toy company?
A)Administrative costs
B)Cost of advertising the new products
C)Cost of shipping to retailers
D)Salaries of game designers
Answer: A
Q2) In ___________,inventory consists of freight-in and the cost of the product which is to be resold.
A)a service company
B)a merchandising company
C)a manufacturing company
D)all of these companies
Answer: B
Q3) Which of the following costs would appear on the income statements for both a merchandiser and manufacturer?
A)Cost of goods manufactured
B)Direct labor incurred
C)Direct materials used
D)Operating expenses
Answer: D
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Chapter 3: Job Costing
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260 Flashcards
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Sample Questions
Q1) If manufacturing overhead has been underallocated during the period,and most of the jobs produced have been sold,then:
A)cost of goods sold should be decreased.
B)cost of goods sold should be increased.
C)finished goods inventory should be increased.
D)work in process inventory should be decreased.
Answer: B
Q2) What types of businesses can use a job costing system?
A)Manufacturing and merchandising businesses
B)Service and manufacturing businesses
C)Service and merchandising businesses
D)Service,manufacturing,and merchandising businesses
Answer: D
Q3) The total cost of a job shown on the job cost record is the sum of the direct materials and direct labor traced to the job.
A)True
B)False
Answer: False
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Chapter 4: Activity-Based Costing,
Production, and the Costs of Quality
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201 Verified Questions
201 Flashcards
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Sample Questions
Q1) How much of the correspondence cost will be assigned to Department P?
A)$5,000
B)$6,000
C)$ 375
D)$3,750
Q2) A plantwide overhead rate is calculated by multiplying the estimated total manufacturing overhead costs for the year by the estimated total amount of the allocation base for the year.
A)True
B)False
Q3) It is easier to allocate indirect costs to the products that caused those costs if you use the ABC system rather than traditional costing systems.
A)True
B)False
Q4) To determine the amount of overhead allocated,the overhead rate is divided by the cost driver.
A)True
B)False
Page 6
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Chapter 5: Process Costing
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224 Verified Questions
224 Flashcards
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Sample Questions
Q1) On December 31,the total cost of the units in ending WIP would be closest to:
A)$ 1,153.
B)$ 1,052.
C)$21,047.
D)$ 1,571.
Q2) Beginning WIP inventory is 12,500 units,55% complete for materials.During the month 80,000 units were started; 84,000 were finished; and ending WIP was 8,500 units that were 40% complete for materials.How many equivalent units should be used to allocate costs for materials (assume as usual,that the weighted average method is used,not FIFO)?
A)83,400
B)90,875
C)88,675
D)87,400
Q3) If all direct materials are added at the end of the production process,and the units have made it 50% of the way through the production process,then the percentage completion for direct materials is 50%.
A)True
B)False
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Page 7
Chapter 6: Cost Behavior
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Sample Questions
Q1) Pedro Company has total fixed costs of $480,000.Total fixed and variable costs are $600,000 at a production level of 150,000 units.The variable cost per unit at 300,000 units is:
A)the same as at 150,000 units.
B)greater than at 150,000 units.
C)less than at 150,000 units.
D)dependent upon fixed costs per unit.
Q2) When a manufacturer prepares a contribution margin income statement,Cost of Goods Sold is always a variable cost.
A)True
B)False
Q3) Net income reported under absorption costing will exceed net income reported under variable costing for a given period if:
A)production equals sales for that period.
B)production exceeds sales for that period.
C)sales exceed production for that period.
D)variable overhead exceeds fixed overhead for that period.
Q4) Describe the scattergraph method.Discuss the advantages and disadvantages of using the scattergraph method.
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Chapter 7: Cost-Volume-Profit Analysis
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Sample Questions
Q1) Wynn Technology USB drives sell for $15 per drive.Unit variable expenses total $9.The breakeven sales in units is 2,000 and budgeted sales in units is 4,200.What is the margin of safety in dollars?
A)$ 147
B)$93,000
C)$33,000
D)$ 2,200
Q2) Say variable costs are $10 per unit and the sales price is $16 per unit.If volume would triple as a result of decreasing the sales price to $9 per unit,the business should strongly consider decreasing the sales price to $9 per unit.
A)True
B)False
Q3) When calculating the breakeven point in terms of units,fixed costs should be divided by the contribution margin ratio.
A)True
B)False
Q4) When a company sells more than one product,there is one unique breakeven point.
A)True
B)False
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Chapter 8: Short Term Business Decisions
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Sample Questions
Q1) All fixed costs are unavoidable.Assume Darren Company is able to increase the sale price of product F to $30,000 with no change in volume of units sold and no change in variable costs or fixed costs.What affect will this have on operating income?
A)Increase $2,000
B)Increase $30,000
C)Decrease $2,000
D)Decrease $30,000
Q2) Which would be a consideration for making special orders?
A)Available capacity to fill the order
B)If price will cover incremental costs of filling the order
C)If the order will affect regular sales in the long run
D)All of the above
Q3) Relevant information is expected future data that differs among alternatives.
A)True
B)False
Q4) Managers only need to consider inventoriable product costs when setting prices.
A)True
B)False
Q5) What will Burr Hill's revenue be at a market price of $65/round?
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Chapter 9: The Master Budget and Responsibility Accounting
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Sample Questions
Q1) Stiller Company expects cash sales for July of $15,000,and a 20% monthly increase during August and September.Credit sales of $10,000 in July should be followed by 25% increases during August and September.What are budgeted cash sales and budgeted credit sales for September respectively?
A)$18,000 and $12,500
B)$21,600 and $15,625
C)$23,438 and $14,400
D)$18,750 and $12,000
Q2) Which of the following budgets is part of the operating budgets?
A)Production budget
B)Budgeted balance sheet
C)Capital expenditure budget
D)Cash budget
Q3) Most companies consider divisions as profit centers.
A)True
B)False
Q4) Budgeting includes planning for ending inventory.
A)True
B)False
11
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Chapter 10: Flexible Budgets and Standard Costs
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Sample Questions
Q1) Myer Appliances sells its microwave ovens for $110 each.Its variable cost is $65 per microwave oven.Fixed costs are $90,000 per month for volumes up to 2,000 microwave ovens.Above 2,000 microwave ovens,monthly fixed costs are $135,000.What is the budgeted operating income (loss)at a sales level of 1,900 microwave ovens per month?
A)Operating loss of $4,500
B)Operating loss of $49,500
C)Operating income of $85,500
D)Operating income of $119,000
Q2) Tucker Supply sells a unit of its product for $10.00,resulting in a contribution margin of $8.00 per unit.Fixed costs are budgeted at $52,000 per quarter for volumes up to 15,000 units and $78,000 for volumes exceeding 15,000 units. Prepare the flexible budget for the next quarter for volume levels of 12,000,18,000,and 25,000 units.
Q3) Both the static budget and the flexible budget used for performance evaluation are developed before the period of actual production.
A)True B)False
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Page 12
Chapter 11: Performance Evaluation and the Balanced Scorecard
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155 Flashcards
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Sample Questions
Q1) Sales margin is calculated as sales divided by operating income.
A)True
B)False
Q2) Comparing company results against industry benchmarks is often less useful than comparing actual results against budget amount.
A)True
B)False
Q3) Revenue center performance reports often highlight both the flexible budget variance and the sales volume variance.
A)True
B)False
Q4) What is the Beverage Division's capital turnover?
A)11.7
B)5.0
C)2.5
D)2.0
Q5) Residual Income (RI)equals operating income less minimum acceptable income.
A)True
B)False
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Chapter 12: Capital Investment Decisions and the Time
Value of Money
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Sample Questions
Q1) A company finds that the residual value of $10,000 for the equipment in a capital budgeting project has been inadvertently omitted from the calculation of the net present value (NPV)for that project.How does this omission affect the NPV of that project?
A)The project's NPV should be $10,000 higher with the residual value included.
B)The project's NPV should be higher,but be less than $10,000 higher,with the residual value included.
C)The project's NPV should be $10,000 lower with the residual value included.
D)The project's NPV should be lower,but be less than $10,000 lower,with the residual value included.
Q2) The Jones Company bought a new specialty machine that cost $120,000 with a 6-year life with no residual value.The company plans to generate annual cash inflows of $32,000 each year for 6 years.Calculate the accounting rate of return.
Q3) Investments with shorter payback periods are more desirable,all else being equal. A)True B)False
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Page 14
Chapter 13: Statement of Cash Flows
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135 Flashcards
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Sample Questions
Q1) A statement of cash flows is generated to show:
A)the revenues the company has earned.
B)the expenses the company incurred during the time period.
C)the inflow and outflow of cash during the time period.
D)how profits were generated.
Q2) Which of the following is NOT a cash outflow from an operating activity?
A)Payment of interest on a loan
B)Payment for purchasing inventory
C)Owner withdrawal from the company
D)Payments to the government for taxes
Q3) A company uses the indirect method to prepare the statement of cash flows.How will depreciation be presented on the statement?
A)Depreciation expense will be added to net income in the financing activities section.
B)Depreciation expense will be subtracted from net income in the operating section.
C)Depreciation expense will be added to net income in the operating activities section.
D)Depreciation expense will be added to net income in the investing activities section.
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15
Chapter 14: Financial Statement Analysis
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Sample Questions
Q1) Which of the following is the formula to compute times-interest-earned?
A)Income from operations/interest expense
B)Interest expense/income from operations
C)Total liabilities/total assets
D)Total assets/total liabilities
Q2) Which of the following is the formula to compute the debt ratio?
A)Total liabilities/total assets
B)Interest expense/income from operations
C)Income from operations/interest expense
D)Total assets/total liabilities
Q3) What would a horizontal analysis report with respect to long-term liabilities?
A)Long-term liabilities decreased by $1,500.
B)Long-term liabilities decreased by 5.57%.
C)Long-term liabilities increased by 8.21%.
D)Long-term liabilities increased by $1,500.
Q4) What is days' sales in receivables for the current year?
A)51.671 days
B)7.50 days
C)54.00 days
D)37.23 days
Page 16
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