Financial Planning and Analysis
Exam Answer Key
Course Introduction
Financial Planning and Analysis is a course designed to equip students with the essential skills for managing and optimizing an organizations financial resources. The course covers key topics such as budgeting, forecasting, variance analysis, and financial modeling, providing a comprehensive understanding of how to evaluate financial data and develop strategic plans. Students learn to interpret financial statements, assess business performance, and make informed recommendations to support decision-making. Real-world case studies and practical exercises are incorporated to develop analytical and problem-solving abilities, preparing students for careers in corporate finance, management consulting, and related fields.
Recommended Textbook Cornerstones of Managerial Accounting 3rd Canadian Edition by Maryanne Mowen
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14 Chapters
2190 Verified Questions
2190 Flashcards
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Chapter 1: Introduction to Managerial Accounting
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Sample Questions
Q1) Which of the following is a characteristic of management accounting?
A)It provides objective financial information.
B)It must adhere to mandatory rules.
C)It has no mandatory rules.
D)Its main users are outside of the organization.
Answer: C
Q2) With which of the following do virtually all managerial accounting practices assist managers?
A)maximizing profits
B)determining costs
C)creating annual reports
D)generating tax reports
Answer: A
Q3) Time is NOT a crucial element in all phases of the value chain.
A)True
B)False
Answer: False
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Chapter 2: Basic Managerial Accounting Concepts
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222 Verified Questions
222 Flashcards
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Sample Questions
Q1) What is the term for the cost of the partially completed goods at the end of the period?
A)the beginning work-in-process inventory
B)the cost of goods manufactured
C)the ending work-in-process inventory
D)the ending finished goods inventory
Answer: C
Q2) (total manufacturing costs + work in process beginning work in process ending)/units produced
A)Per-unit prime cost
B)Per-unit conversion cost
C)Per-unit cost of goods manufactured
Answer: C
Q3) Janitorial supplies for the factory
A)Period
B)Product Answer: B
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4
Chapter 3: Cost Behaviour
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Sample Questions
Q1) Factory supervisor's salary
A)Variable
B)Fixed Answer: B
Q2) Cost of transporting bicycles to retailer
A)Variable
B)Fixed Answer: A
Q3) Cost of executive training seminars
A)Discretionary
B)Committed Answer: A
Q4) Has an increased fixed component at specific intervals
A)Variable
B)Fixed
C)Mixed
D)Step
Answer: D
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Page 5
Chapter 4: Costvolumeprofit Analysis: a Managerial Planning Tool
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161 Flashcards
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Sample Questions
Q1) Refer to the Figure.What is the contribution margin per hour?
A)$6.50
B)$14.00
C)$21.00
D)$35.00
Q2) Refer to the Figure.What is the contribution margin ratio?
A)33%
B)40%
C)50%
D)60%
Q3) What is the contribution margin?
A)the difference between sales and fixed costs
B)the difference between fixed and variable costs
C)the difference between sales and variable costs
D)the difference between sales and total costs
Q4) What are two concepts useful to management when assessing risk?
Q5) What are the assumptions underlying cost-volume-profit analysis?
A)True B)False Page 6
Q6) If fixed costs increase,the break-even point also increases.
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Page 7
Chapter 5: Job-Order Costing
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Sample Questions
Q1) Refer to the Figure.What is the ending balance in work in process?
A)$110,383
B)$113,083
C)$166,383
D)$169,083
Q2) How do process costing firms accumulate costs?
A)by job or process
B)by unit or department
C)by process or unit
D)by process or department
Q3) Refer to the Figure.Suppose Blackfoot decides to continue using departmental overhead rates and a job spends 4 hours in assembly and 3 hours in testing.What is the amount of overhead charged to the job?
A)$20.00
B)$22.00
C)$28.00
D)$50.54
Q4) Refer to Baldwin,Inc.
A. Calculate the per-unit cost of Job 12 .
B. Calculate the ending balance in the Work-in-Process account.
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Chapter 6: Process Costing
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Sample Questions
Q1) Refer to the Figure.How many units were started in Door Specialists second department during March?
A)37,000
B)40,000
C)50,000
D)63,000
Q2) Beginning inventory for the month contained 12,000 units that were 60% complete with respect to materials.During the month,80,000 units were completed and transferred out.Ending inventory contained 6,000 units,30% complete with respect to materials.What would be the weighted average equivalent units of production for materials for the month?
A)92,000
B)81,800
C)80,000
D)12,000
Q3) What does equivalent production use to express all activity of the period?
A)work in process
B)materials labour and overhead
C)fully completed units
D)partially completed units
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Chapter 7: Activity-Based Costing and Management
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Sample Questions
Q1) Refer to the Figure.Suppose Andiamo uses only machine hours to calculate a plantwide overhead rate.What would be the total overhead assigned to the basic tablets?
A)$60,000
B)$80,000
C)$90,000
D)$180,000
Q2) A defective product is one that conforms to specifications.
A)True
B)False
Q3) A company has two inspectors,each earning a salary of $150,000.One inspector works exclusively on inspecting parts received from outside suppliers,while the other spends 40% of her time inspecting parts and 60% of her time inspecting final products.How much labour cost should be assigned to the activity of inspecting parts?
A)$60,000
B)$90,000
C)$210,000
D)$300,000
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Chapter 8: Absorption and Variable Costing, and Inventory Management
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Sample Questions
Q1) Stockout costs
A)The costs of not having a product available when demanded by a customer
B)The costs of carrying inventory
C)Approach that maintains goods should be pulled through the system by present demand
D)The number of units in the order quantity that minimizes the total cost
E)The costs of placing and receiving an order
Q2) Product cost includes all costs of the company.
A)True
B)False
Q3) JIT relies on a push system to control finished goods inventory.
A)True
B)False
Q4) Which inventory cost can include insurance,inventory taxes,and obsolescence?
A)the ordering cost
B)the carrying cost
C)the stockout cost
D)the setup cost
Q5) What are the traditional reasons for carrying inventory?
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Chapter 9: Budgeting, production, cash, and Master Budget
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Sample Questions
Q1) Which of the following schedules shows the planned ending cash balance for the year?
A)the budgeted income statement
B)the budgeted balance sheet
C)the production budget
D)the budgeted cash receipts
Q2) In which order are budgets prepared?
A)production budget, sales budget, direct labour budget
B)production budget, cost of goods sold budget, direct labour budget
C)sales budget, cash budget, production budget
D)sales budget, production budget, direct materials purchases budget
Q3) Refer to the Figure.What is the cost in dollars of purchases for July?
A)$7,970
B)$8,450
C)$19,925
D)$33,320
Q4) If the initial cash budget indicates a cash deficiency,the company must go out of business.
A)True
B)False
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Chapter 10: Standard Costing: a Managerial Control Tool
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Sample Questions
Q1) Refer to the Figure.What are the materials price variance and the materials usage variance,respectively?
A)$9,000 U and $1,200 F
B)$9,000 F and $1,200 U
C)$9,300 U and $1,500 F
D)$9,300 F and $1,500 U
Q2) Which department is responsible for setting price standards for materials and labour?
A)Personnel must consider discounts, freight, and quality.
B)Purchasing must consider payroll taxes, fringe benefits, and qualifications.
C)It is the joint responsibility of operations, purchasing, personnel, and accounting.
D)Purchasing must consider the quantity of materials.
Q3) Refer to the Figure.What is the variance that is lower than the lower control limit?
A)$120,000
B)$145,000
C)$170,000
D)$180,000
Q4) Explain the kaizen approach to costing.
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Page 13
Chapter 11: Flexible Budgets and Overhead Analysis
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149 Flashcards
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Sample Questions
Q1) What department is usually held responsible for the fixed overhead volume variance?
A)the accounting department
B)the production department
C)top management
D)the planning department
Q2) In an activity flexible budget,what does the fixed cost component typically correspond to?
A)resources that vary with direct labour hours
B)resources that vary as the activity output changes
C)resources acquired in advance of usage
D)resources acquired as needed
Q3) How is the standard fixed overhead rate often calculated?
A)budgeted fixed overhead divided by practical capacity measured in standard hours
B)budgeted fixed overhead divided by actual capacity measured in standard hours
C)budgeted fixed overhead divided by actual hours
D)budgeted fixed overhead divided by practical capacity measured in actual hours
Q4) Define static budget and flexible budget.What is each type used for?
Q5) What is a performance report?
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Chapter 12: Performance Evaluation and Decentralization
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Sample Questions
Q1) Refer to the Figure.Assume that Sophistosand and Videostuff have agreed on a transfer price of $2.20.What is the total benefit for Giga-Stuff,Inc.?
A)$18,000
B)$63,000
C)$69,000
D)$81,000
Q2) What is the term for the strategic management system that translates an organization's mission and strategy into operational objectives and performance measures?
A)activity-based management
B)responsibility accounting
C)strategic accounting
D)Balanced Scorecard
Q3) Return on investment is just a specific way of calculating residual income
A)True
B)False
Q4) What is Strategy?
Q5) Turnover is the ratio of operating income to sales.
A)True
B)False
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Chapter 13: Short-Run Decision Making: Relevant Costing
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149 Flashcards
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Sample Questions
Q1) Refer to the Figure.What is the contribution margin per hour of machine time for Test A?
A)$10
B)$20
C)$40
D)$100
Q2) A segment margin is always greater than or equal to zero.
A)True
B)False
Q3) Refer to the Figure.Should Butry process dac further or sell now,and what will be the effect on income?
A)Do not process further, because income will be $5,000 lower.
B)Do not process further, because income will be $1,500 lower.
C)Process further, because income will be $1,500 higher.
D)Process further, because income will be $5,000 higher.
Q4) "The accounting decision-making model is not useful in real life because it only looks at the numbers." Critique this statement,and give an example for which it does not hold true.
Q5) What are the six steps of the decision-making model?
Q6) Why does a special-order decision frequently ignore fixed factory overhead?
Page 16
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Chapter 14: Capital Investment Decisions
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Sample Questions
Q1) Which payback period will managers want when the risk of obsolescence is high?
A)a shorter payback period
B)a longer payback period
C)a payback period equal to the life of the investment
D)an extended payback period
Q2) The internal rate of return model does NOT consistently result in choices that maximize firm wealth.
A)True
B)False
Q3) Which of the following statements is characteristic of capital investment decision making?
A)It is used only for independent projects.
B)It is used only for mutually exclusive projects.
C)It requires that funding for a project must come from sources with the same opportunity cost of funds.
D)It places large amounts of resources at risk for long periods of time.
Q4) A disadvantage of the payback period is that it ignores a project's total profitability.
A)True
B)False
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