Intermediate Managerial Accounting
Final Test Solutions
Course Introduction
Intermediate Managerial Accounting builds upon foundational accounting knowledge to explore more complex concepts and techniques essential for effective internal business decision-making. This course delves into cost behavior analysis, budgeting, standard costing, variance analysis, and performance evaluation, with a strong emphasis on interpreting financial information for planning and control. Students will learn how to apply managerial accounting tools to analyze operational efficiency, support strategic decisions, and contribute to organizational objectives. Case studies and real-world scenarios are used to reinforce critical thinking and practical application in a variety of business settings.
Recommended Textbook
Horngren's Accounting The Managerial Chapters 10th Edition by Tracie L. Miller Nobles
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9 Chapters
1348 Verified Questions
1348 Flashcards
Source URL: https://quizplus.com/study-set/3558 Page 2
Chapter 1: Introduction to Managerial Accounting
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179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/70629
Sample Questions
Q1) The primary activity of manufacturing businesses is to purchase goods from a wholesaler and resell them.
A)True
B)False
Answer: False
Q2) One of the primary activities of Rex Inc. is to purchase hats from Viva Inc. in Texas and sell them to its customers in Washington for a profit. It is likely that Rex is a:
A) manufacturing company.
B) hybrid company.
C) service company.
D) merchandising company.
Answer: D
Q3) Selling and administrative expenses are subtracted from the cost of goods sold to obtain operating profit.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Job Order Costing
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152 Verified Questions
152 Flashcards
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Sample Questions
Q1) Unlike manufacturing companies, service companies use an allocation base for allocating both direct and indirect costs.
A)True
B)False
Answer: False
Q2) Which of the following statements is true?
A) A process costing system would be used by manufacturers of custom-made perfumes.
B) A job order costing system would be used by manufacturers of baking utensils.
C) A construction company would likely use a process costing system.
D) An accounting firm would likely use a job order costing system.
Answer: D
Q3) Which of the following companies is most likely to use job order costing?
A) a gold refinery
B) a law firm
C) a surfboard manufacturer
D) a soft drink company
Answer: B
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4
Chapter 3: Process Costing
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144 Verified Questions
144 Flashcards
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Sample Questions
Q1) Production cost reports prepared using first-in, first-out (FIFO) method determines the average cost of equivalent units of production by combining beginning inventory costs with current period costs.
A)True
B)False Answer: False
Q2) In a process costing system, costs can be controlled with the aid of a production cost report.
A)True
B)False Answer: True
Q3) In a process costing system, equivalent units must be calculated separately for materials and conversion costs.
A)True
B)False Answer: True
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Page 5
Chapter 4: Cost-Volume-Profit Analysis
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172 Verified Questions
172 Flashcards
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Sample Questions
Q1) Which of the following is the right formula for calculating total mixed cost?
A) Total mixed cost = (Variable cost per unit ÷ Number of units) + Total fixed cost
B) Total mixed cost = (Variable cost per unit × Number of units) - Total fixed cost
C) Total mixed cost = (Variable cost per unit × Number of units) + Total fixed cost
D) Total mixed cost = (Variable cost per unit ÷ Number of units) - Total fixed cost
Q2) If the selling price of Product X is $15.50 per unit and unit fixed cost is $5.50, its contribution margin per unit is $10.00.
A)True
B)False
Q3) The high-low method is used to:
A) determine the highest price that can be charged for a product.
B) separate mixed costs into their variable and fixed components.
C) identify the relevant and irrelevant costs of a business.
D) determine the sales level at highest capacity.
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6
Chapter 5: Master Budgets
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114 Verified Questions
114 Flashcards
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Sample Questions
Q1) A budget represents the plans that a company has in place to achieve its goals.
A)True
B)False
Q2) While preparing the budgeted income statement of a merchandiser, the amount of cost of goods sold can be taken from:
A) the budgeted balance sheet.
B) the budgeted cash flow statement.
C) the inventory, purchases and COGS budget.
D) the payment for cost of goods sold.
Q3) Calculate total cash payments made in October for purchases.
A) $72,630
B) $70,680
C) $70,520
D) $74,290
Q4) Based on the new data, calculate the new projected cash balance at the end of September.
A) $8,500
B) $2,400
C) $7,000
D) $900
Page 7
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Chapter 6: Flexible Budgets and Standard Cost Systems
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174 Verified Questions
174 Flashcards
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Sample Questions
Q1) Which of the following is an example of a labor efficiency standard?
A) $20 per direct labor hour
B) 50 square feet per unit
C) $0.95 per square foot
D) 6 direct labor hours per unit
Q2) Atlace Manufacturers uses standard costing system. Standards for manufacturing overhead are as follows:
Variable overhead: $30 per direct labor hour
Fixed overhead: $10 per direct labor hour
Actual overhead incurred (variable and fixed): $45,600
Standards for direct labor are as follows:
Hours per unit 0.5, Direct labor cost per hour $18.00
Actual direct labor for the month: 1,200 hours for a total cost of $24,000
Actual and planned production for the month: 3,000 units
The journal entry to allocate overhead cost (both variable and fixed) to production would be:
Q3) In a standard costing system, each item has a cost standard and a quantity standard.
A)True
B)False
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Chapter 7: Cost Allocation and Responsibility Accounting
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130 Verified Questions
130 Flashcards
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Sample Questions
Q1) To evaluate the performance of an investment center, a business needs key performance indicators that measure:
A) manufacturing efficiency and product defect rate.
B) operating income and efficient use of assets.
C) customer satisfaction and market share.
D) generation of sales revenues and control of operating expenses.
Q2) What is the cost of materials handling per ceiling fan?
A) $1.60
B) $7.20
C) $6.00
D) $5.00
Q3) Responsibility reports for revenue centers show all costs incurred by the department and are useful when management needs to know the total cost of operating the department.
A)True
B)False
Q4) Performance report of a profit center includes both revenues and expenses.
A)True
B)False
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Chapter 8: Short-Term Business Decisions
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161 Verified Questions
161 Flashcards
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Sample Questions
Q1) If there are no constraints on sales of either product, and the company could choose any proportions of product mix that they wanted, what is the optimum product mix to maximize operating income of the company?
A) 400 units of small, 125 units of large
B) zero units of small, 625 units of large
C) 100 units of small, 500 units of large
D) 500 units of small, zero units of large
Q2) Which of the following is the most important key to short-term business decision making?
A) focus on costs which do not change under two alternatives and on historic costs
B) focus on qualitative data only and ignore future cash flows
C) focus on sunk costs and quantitative data
D) focus on relevant costs and use the contribution margin approach
Q3) Assuming that fixed costs cannot be reduced, how much is the target variable cost?
A) $180,000
B) $300,000
C) $220,000
D) $500,000
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Chapter 9: Capital Investment Decisions
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122 Verified Questions
122 Flashcards
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Sample Questions
Q1) The fact that invested cash earns income over time is called the time value of money.
A)True
B)False
Q2) Which of the following most accurately describes the discount rate used in NPV analysis?
A) the rate of inflation
B) the rate of interest earned on a savings account
C) the required rate of return or the hurdle rate
D) the rate of interest charged for debt financing of an investment
Q3) What is the profitability index for Project B?
A) 1.98
B) 1.38
C) 1.26
D) 1.90
Q4) Calculate the payback period for Proposal X.
A) 5 years
B) 4 years
C) 8 years
D) 10 years
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