Management Accounting Test
Questions
Course Introduction
Management Accounting explores the principles, techniques, and tools that organizations use to plan, control, and make informed decisions about their operations and strategy. This course covers topics such as budgeting, cost behavior analysis, variance analysis, performance measurement, and internal financial reporting. Students will learn how managerial accounting information is used to improve efficiency, support short- and long-term planning, and guide decision-making processes across various business environments. Emphasis is also placed on ethical considerations and the evolving role of management accountants in a dynamic business landscape.
Recommended Textbook
Cornerstones of Cost Management 2nd Edition by Don R. Hansen
Available Study Resources on Quizplus
20 Chapters
3210 Verified Questions
3210 Flashcards
Source URL: https://quizplus.com/study-set/3755
Page 2
Chapter 1: Introduction to Cost Management
Available Study Resources on Quizplus for this Chatper
157 Verified Questions
157 Flashcards
Source URL: https://quizplus.com/quiz/74805
Sample Questions
Q1) Extending the close of the fiscal year beyond December 31 so that some sales of next year are included in the current year would be a violation of which standard of ethical conduct for management accountants?
A) competence
B) confidentiality
C) conformance
D) all of these
Answer: A
Q2) The two major subsystems of the accounting information system are the financial accounting information system and the cost management accounting information system.
A)True
B)False
Answer: True
Q3) The planning process includes
A) setting objectives.
B) identifying means of achieving the objectives.
C) making decisions.
D) all of these.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Basic Cost Management Concepts
Available Study Resources on Quizplus for this Chatper
201 Verified Questions
201 Flashcards
Source URL: https://quizplus.com/quiz/74794
Sample Questions
Q1) A computerized information system that strives to input data once and to make it available to people across the company for different purposes is called a:
A) cost management information system
B) enterprise resource planning system
C) internal accounting system
D) financial accounting information system
Answer: B
Q2) High quality cost management systems should have an organization-wide perspective. Which of the following would NOT be a benefit of a cost management system?
A) increases speed by ignoring non-financial information
B) reduces duplicate data storage and use of data
C) improves timeliness of reports
D) increases the efficiency of generating reliable and accurate information
Answer: A
Q3) Gross margin is the difference between __________ and the cost of goods or services sold.
Answer: sales revenues
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Cost Behavior
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/74792
Sample Questions
Q1) Figure 3-9 Hereford Company is planning to introduce a new product with an 80 percent learning rate for production for batches of 1,000 units. The variable labor costs are $30 per unit for the first 1,000-unit batch. Each batch requires 100 hours. There are $10,000 in fixed costs not subject to learning.
Refer to Figure 3-9. What is the cumulative total time (labor hours) to produce 2,000 units based on the cumulative average-time learning curve?
A) 20 hours
B) 80 hours
C) 100 hours
D) 160 hours
Answer: D
Q2) In the formula Y = F + VX, F refers to the A) slope.
B) intercept.
C) dependent variable.
D) independent variable.
Answer: B
Q3) __________ analysis focuses on how costs react to changes in activity levels.
Answer: Cost behavior
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Activity-Based Costing
Available Study Resources on Quizplus for this Chatper
201 Verified Questions
201 Flashcards
Source URL: https://quizplus.com/quiz/74791
Sample Questions
Q1) Classifying activities into four general categories facilitates product costing by associating the response to different types of activity drivers.
A)True
B)False
Q2) In a time-driven ABC system, once the managers determine the cost of per time unit of supplying resources to activities, the next step would be
A) for managers to determine how long an employee takes to do an activity.
B) assign costs of a department's resources to the customer who uses the services.
C) for managers to determine the time it takes to carry out one unit of each kind of activity.
D) attempt to estimate practical capacity.
Q3) Which of the following quantities is an example of an activity driver in activity-based costing?
A) number of setups
B) number of orders placed
C) number of machine hours
D) all of the above
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Product and Service Costing: Job-Order System
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/74790
Sample Questions
Q1) __________ means that services cannot be inventoried but must be consumed when performed.
Q2) The defective units due to the exacting nature of a particular job is called
Q3) A __________ inventory file is a file of job-order cost sheets. or
Q4) __________ is the recognition and recording of costs.
Q5) The collection of all job-order cost sheets defines a work-in-process inventory file. A)True B)False
Q6) Inseparability refers to the A) nonphysical nature of services as opposed to products. B) fact that production and consumption are inseparable for services. C) greater chances for variation in the performance of services than in the production of products.
D) fact that services cannot be inventoried but must be consumed when performed.
Q7) Why are firms reluctant to use actual costing? How does normal costing solve the problems?
To view all questions and flashcards with answers, click on the resource link above. Page 7
Q8) Purchases of direct materials are recorded as a debit to the __________ account.
Chapter 6: Process Costing
Available Study Resources on Quizplus for this Chatper
188 Verified Questions
188 Flashcards
Source URL: https://quizplus.com/quiz/74789
Sample Questions
Q1) Beginning inventory consisted of 10,000 units (20 percent converted) and ending inventory consisted of 20,000 units (40 percent converted). In addition, 60,000 units were started during the period. How many equivalent units for conversion costs were produced using the weighted average method?
A) 50,000 units
B) 56,000 units
C) 70,000 units
D) 58,000 units
Q2) Services that are basically homogeneous and repetitive cannot take advantage of a process-costing approach.
A)True
B)False
Q3) __________ is a costing system that blends job-order and process-costing procedures applied to batches of homogeneous products.
Q4) When spoilage is due to the exacting nature of a particular job it is called __________ spoilage.
Q5) In a __________ costing system, production costs are accumulated by process.
Q6) A key input to the cost of production report is __________ costs.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Allocating Costs of Support Departments and Joint Products
Available Study Resources on Quizplus for this Chatper
173 Verified Questions
173 Flashcards
Source URL: https://quizplus.com/quiz/74788
Sample Questions
Q1) A single changing rate uses the fixed costs of the support department.
A)True
B)False
Q2) Which of the following is NOT a major objective of allocation as identified by the IMA?
A) to detect fraud
B) to obtain a mutually agreeable price
C) to compute product-line profitability
D) to value inventory
Q3) Consequence Printing operates a Graphics business at two different locations. Consequence Printing has one support department that is responsible for cleaning, service, and maintenance of its printing equipment. The costs of the support department are allocated to each Graphics Center on the basis of total prints made.
Q4) Joint production processes result in the output of two or more products produced simultaneously. A)True
B)False
Q5) The __________ method of allocating costs assumes "step down" interdepartmental services.
9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Budgeting for Planning and Control Key
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/74787
Sample Questions
Q1) Goal congruence means
A) there is alignment of organizational and managerial goals.
B) the organization is aligned to the needs of the environment.
C) the organization is aligned to shareholder goals.
D) there is no divergence between organization and stockholder goals.
Q2) Firefly Manufacturing Company needs to know its anticipated cash inflows for the next quarter by month. Cash sales are 20 percent of total sales each month. Historically, sales on account have been collected as follows: 50 percent in the month of the sale, 35 percent in the month after the sale, and the remaining 15 percent two months after the sale. Sales for the quarter are projected as follows: January, $60,000; February, $30,000; and March, $90,000. Accounts receivable on December 31 were $45,000.
The expected cash collections of Firefly Manufacturing Company for March are
A) $90,000.
B) $69,600.
C) $64,500.
D) $114,600.
Q3) The master budget is composed of the operations budget and the future budget.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: Standard Costing: a Functional-Based Control Approach
Available Study Resources on Quizplus for this Chatper
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/74786
Sample Questions
Q1) Harrangue Company's standard variable overhead rate is $6 per direct labor hour, and each unit requires 2 standard direct labor hours. During March, Harry recorded 6,000 actual direct labor hours, $37,000 actual variable overhead costs, and 2,900 units of product manufactured. What is the total variable overhead variance for March for Harrangue?
A) $2,200 (U)
B) $600 (U)
C) $1,000 (U)
D) $1,200 (U)
Q2) The total budget variances are categorized into price variances and usage variances.
A)True
B)False
Q3) The direct materials usage variance is the sum of the actual quantities and the standard quantities of units.
A)True
B)False
Q4) All variances accounts are __________ at the end of the operating year.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Q5) The sum of the standard plus allowable deviation is called the upper __________ .
Chapter 10: Decentralization: Responsibility Accounting, Performance
Evaluation, and Transfer Pricing
Available Study Resources on Quizplus for this Chatper
139 Verified Questions
139 Flashcards
Source URL: https://quizplus.com/quiz/74804
Sample Questions
Q1) Worldwide Inc., is a multinational company with divisions around the world. Division A in the United States purchases a part from Division G in China. The part can be purchased externally for $7 each. Transportation costs amount to $1 and the commission of $.50 will not need to be paid. What is the transfer price using the comparable uncontrolled price method?
A) $8.50
B) $8
C) $7
D) $7.50
Q2) Worldwide Inc., is a multinational company with divisions around the world. Division A in the United States purchases a part from Division G in China. There is no outside market for the part because it is used to manufacture another product. The manufacturing cost for the part is $5. Transportation is $1 and commissions are $.5 but do not need to be paid. What is the transfer price using the cost-plus method?
A) $5.50
B) $6.50
C) $6
D) $5
Q3) __________ managers can make better decisions using __________ information.
Page 12
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: Strategic Cost Management
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/74803
Sample Questions
Q1) In a JIT environment, many overhead costs are directly traceable to products.
A)True
B)False
Q2) Strategic cost management emphasizes the importance of an external focus and the need to recognize and exploit internal and external linkages.
A)True
B)False
Q3) Traditional manufacturing uses which of the following philosophies of quality control?
A) zero defects
B) total quality control
C) acceptable quality level
D) both a and b
Q4) The use of cost data to develop and identify superior strategies that will produce a sustainable competitive advantage is called:
A) Strategic decision making
B) Competitive advantage
C) Strategic cost management
D) Customer value
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Activity-Based Management
Available Study Resources on Quizplus for this Chatper
146 Verified Questions
146 Flashcards
Source URL: https://quizplus.com/quiz/74802
Sample Questions
Q1) A well accepted approach for reducing costs by eliminating waste is called __________ costing.
Q2) The following is(are) awards made when performance is maintained or exceeds a specific measure:
A) Profit sharing
B) Stock options
C) Bonuses
D) Gain sharing
Q3) Financial measures of performance focus on the dollar effect of activity performance changes.
A)True
B)False
Q4) The unused capacity variance is
A) the difference in costs between activity availability and activity usage.
B) the difference in costs between actual activity level acquired and the value-added standard quantity of activity that should have been used.
C) the difference in costs between practical capacity of activity and the standard capacity of the activity.
D) none of these.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: The Balanced Scorecard: Strategic-Based Control
Available Study Resources on Quizplus for this Chatper
124 Verified Questions
124 Flashcards
Source URL: https://quizplus.com/quiz/74801
Sample Questions
Q1) Performance expectations are communicated by setting A) new initiatives.
B) targets.
C) a strategic vision.
D) activity measures.
Q2) In a strategic-based responsibility accounting system, stretch targets are established for individual performance measures.
A)True
B)False
Q3) The perspective that defines the capabilities needed by the organization to create long-term improvement is the
A) financial perspective.
B) customer perspective.
C) process perspective.
D) learning and growth perspective.
Q4) Diversifying customers and product lines are initiatives important to A) revenue growth.
B) cost reduction.
C) asset utilization.
D) risk management.
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Quality and Environmental Cost Management
Available Study Resources on Quizplus for this Chatper
202 Verified Questions
202 Flashcards
Source URL: https://quizplus.com/quiz/74800
Sample Questions
Q1) A goal based on short-run quality goals is the
A) interim quality performance report.
B) interim quality standard.
C) multiple-period quality trend report.
D) one-year quality performance report.
Q2) The costs of a consumer complaint department are
A) external failure costs.
B) internal failure costs.
C) appraisal costs.
D) prevention costs.
Q3) Environmental costs involves the damage to the environment by inefficient use of materials and energy.
A)True
B)False
Q4) From the operational content view, a quality product or service is one that meets or exceeds
A) customer expectations.
B) customer satisfaction.
C) company targets.
D) company standards.
Page 16
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Lean Accounting and Productivity Measurement
Available Study Resources on Quizplus for this Chatper
172 Verified Questions
172 Flashcards
Source URL: https://quizplus.com/quiz/74799
Sample Questions
Q1) With multiple products in a value stream, unit cost will increase if
A) more units are shipped than produced.
B) more units are produced than shipped.
C) average conversion cost is used instead of total average cost.
D) none of the above.
Q2) Productivity is concerned with producing A) output rapidly.
B) output efficiently.
C) the maximum quantity of output possible.
D) output effectively.
Q3) Explain the difference between partial and total measures of productivity.
Q4) Describe the objectives and characteristics of a Lean Manufacturing system.
Q5) Lean manufacturing adds value by reducing labor costs.
A)True
B)False
Q6) Productivity measurement is a quantitative assessment of increases or decreases in productivity.
A)True
B)False
Q7) Explain the difference between technical and input trade-off efficiency. Page 17
To view all questions and flashcards with answers, click on the resource link above.
Page 18
Chapter 16: Cost-Volume-Profit Analysis
Available Study Resources on Quizplus for this Chatper
138 Verified Questions
138 Flashcards
Source URL: https://quizplus.com/quiz/74798
Sample Questions
Q1) Biscuit Company sells its product for $50. In addition, it has a variable cost ratio of 45 percent and total fixed costs of $6,875. What is the break-even point in sales dollars for Biscuit Company?
A) $2,750
B) $3,125
C) $6,875
D) $12,500
Q2) The contribution margin at the break-even point
A) equals total fixed costs.
B) is zero.
C) plus total fixed costs equals total revenues.
D) is greater than variable costs.
Q3) Under ABC, cost drivers are separated into unit-based and non-unit-based drivers. A)True
B)False
Q4) Units to earn target profit equal total fixed costs plus target profit divided by the contribution margin ratio.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 17: Activity Resource Usage Model and Tactical
Decision
Making
Available Study Resources on Quizplus for this Chatper
128 Verified Questions
128 Flashcards
Source URL: https://quizplus.com/quiz/74797
Sample Questions
Q1) For flexible resources, if the demand for an activity changes across alternatives, then resource spending will remain the same and costs are relevant.
A)True
B)False
Q2) A decision to make a component internally versus purchasing from a supplier is a
A) special-order decision.
B) keep-or-drop a product-line decision.
C) make-or-buy decision.
D) both a and c.
Q3) Foreign trade zones are set up by the U.S. government to facilitate warehousing and/or manufacturing for companies.
A)True
B)False
Q4) The future costs that differ across alternatives are called
A) Sunk costs
B) Irrelevant costs
C) Relevant costs
D) Past costs
Q5) Past cost __________ represents an allocation of a cost already incurred.
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 18: Pricing and Profitability Analysis
Available Study Resources on Quizplus for this Chatper
164 Verified Questions
164 Flashcards
Source URL: https://quizplus.com/quiz/74796
Sample Questions
Q1) The market size variance is the difference between actual and budgeted industry sales in units, multiplied by the budgeted market share percentage, times the:
A) actual market share percentage
B) budgeted market share percentage
C) actual average unit contribution margin
D) budgeted average unit contribution margin
Q2) The relationship between supply and demand helps set pricing.
A)True
B)False
Q3) The sales mix variance tells managers what impact a difference between actual and expected percentages of products sold has on:
A) volume variance
B) sales variance
C) contribution margin
D) market share
Q4) The overall sales variance is the sum of the contribution margin and the sales price variance.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 19: Capital Investment
Available Study Resources on Quizplus for this Chatper
126 Verified Questions
126 Flashcards
Source URL: https://quizplus.com/quiz/74795
Sample Questions
Q1) If the tax rate is 40 percent and a company has $800,000 of income, a depreciation deduction of $160,000 would result in a tax savings of
A) $105,600.
B) $96,000.
C) $64,000.
D) $54,400.
Q2) The accounting rate of return on original investment is calculated as
A) original investment/net income.
B) net income/debt.
C) average income/original investment.
D) assets/debt.
Q3) A firm is evaluating a project that has a net present value of $0 when a discount rate of 9 percent is used. A discount rate of 7 percent will result in a
A) negative net present value.
B) positive net present value.
C) net present value of $0.
D) the question cannot be answered based upon the information provided.
Q4) NVP measures the __________ in a firm's wealth caused by a project.
Q5) Mutually exclusive projects do not affect the __________ of other projects.
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 20: Inventory Management: Economic Order
Quantity, Jit, and the Theory of Constraints
Available Study Resources on Quizplus for this Chatper
127 Verified Questions
127 Flashcards
Source URL: https://quizplus.com/quiz/74793
Sample Questions
Q1) The cost of holding inventory is known as A) ordering cost.
B) setup cost.
C) stock-out cost.
D) carrying cost.
Q2) The theory of constraints identifies a company's constraints and exploits them.
A)True
B)False
Q3) Which of the following is TRUE about the theory of constraints?
A) TOC recognizes that EOQ is important.
B) TOC recognizes that lowering inventory decreases carrying costs and thus decreases operating expenses and improves net income.
C) TOC recognizes that lower inventories mean more defects.
D) TOC recognizes that lower inventories mean slower response to customers.
Q4) The objectives of JIT are achieved by
A) controlling costs.
B) improving delivery performance.
C) improving quality.
D) all of these.
Q5) The costs of holding inventory are called __________ costs.
To view all questions and flashcards with answers, click on the resource link above. Page 23