Managerial Accounting Exam Materials
Course Introduction
Managerial Accounting is an essential course that explores the role of accounting information in supporting internal decision-making processes within organizations. The course covers key topics such as cost behavior analysis, budgeting, performance evaluation, and decision-making techniques. Students learn how to interpret financial data, prepare management reports, and utilize various accounting tools to plan, control, and evaluate business operations effectively. Emphasis is placed on real-world applications, enabling students to develop critical thinking and problem-solving skills necessary for making informed managerial decisions in dynamic business environments.
Recommended Textbook
Horngren's Accounting The Managerial Chapters 11th Edition by Tracie L. Miller Nobles
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9 Chapters
1673 Verified Questions
1673 Flashcards
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Chapter 18: Introduction to Managerial Accounting
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210 Verified Questions
210 Flashcards
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Sample Questions
Q1) List the three kinds of inventory accounts that are used by manufacturing companies.Briefly discuss what each account includes.
Answer: Raw Materials Inventory includes materials used to make a product.
Work-in-Process Inventory includes goods that are in the manufacturing process but are not yet complete.
Finished Goods Inventory includes completed good that have not yet been sold.
Q2) An Enterprise Resource Planning system (ERP)________.
A) is a cost management system in which a company produces products just in time to satisfy needs
B) requires the implementation of Total Quality Management
C) integrates all worldwide functions, departments, and data of a company into a single system
D) cannot be implemented in service companies
Answer: C
Q3) Manufacturing overhead includes all manufacturing costs,such as direct labor and direct materials.
A)True
B)False
Answer: False
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Page 3
Chapter 19: Job Order Costing
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170 Flashcards
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Sample Questions
Q1) Jeremy Corporation estimated manufacturing overhead costs for the year to be $490,000.Jeremy also estimated 7,000 machine hours and 1,000 direct labor hours for the year.It bases the predetermined overhead allocation rate on machine hours.On January 31,Job 25 was completed.It required 4 machine hours and 6 direct labor hours.What is the amount of manufacturing overhead allocated to the completed job? (Round your answer to the nearest dollar.)
A) $70
B) $700
C) $280
D) $1,960
Answer: C
Q2) Which of the following will be categorized as a manufacturing overhead cost?
A) depreciation on factory plant and equipment
B) wages paid to assembly line workers
C) administration charges of showroom
D) cost of direct materials used
Answer: A
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Chapter 20: Process Costing
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167 Flashcards
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Sample Questions
Q1) Under process costing,a single Work-in-Process Inventory account is maintained for all processes,with a subsidiary ledger containing individual production cost reports for each process.
A)True
B)False Answer: False
Q2) A textile manufacturing company is most likely to use job order costing to arrive at the cost per unit of textile manufactured and sold to customers. A)True
B)False Answer: False
Q3) Direct labor costs are accumulated in the Manufacturing Overhead account. A)True B)False Answer: False
Q4) Provide the formula for (1)To account for and (2)Accounted for. Answer: (1)To account for = Beginning balance + Amount started or added (2)Accounted for = Completed and transferred out + In process
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Page 5
Chapter 21: Cost-Volume-Profit Analysis
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Sample Questions
Q1) Sales mix,or product mix,is the combination of products that make up total sales.
A)True
B)False
Q2) The following data has been provided by Zimtex,Inc.for the year ended December 31,2017.
\[\begin{array} { | l |r | l|}
\hline \text { Units produced and sold } & 5,500& \text { units } \\
\hline \text { Sales price } & \$ 300& \text { per unit } \\
\hline \text { Direct materials } & \$ 90& \text { per unit } \\
\hline \text { Direct labor } & \$ 50& \text { per unit } \\
\hline \text { Variable manufacturing overhead } & \$ 40& \text { per unit } \\
\hline \text { Fixed manufacturing overhead } & \$ 110,000 &\text { per year } \\
\hline \text { Fixed selling and administrative costs } & \$ 150,000 &\text { per year } \\
\hline
\end{array}\] There are no beginning inventories.Prepare an income statement using the contribution margin format.
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Chapter 22: Master Budgets
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172 Flashcards
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Sample Questions
Q1) Delleate,Inc.has prepared the following direct materials purchases budget: \(\begin{array}{|c|c|}
\hline \text { Month } & \begin{array}{l}
\text { Budgeted DM } \\
\text { Purchases } \end{array} \\
\hline \text { June } & \$ 68,000 \\
\hline \text { July } & 77,500 \\
\hline \text { August } & 76,300 \\
\hline \text { September } & 75,000 \\
\hline \text { October } & 72,000 \\
\hline
\end{array}\) All purchases are paid for as follows: 10% in the month of purchase,50% in the following month,and 40% two months after purchase.Calculate total cash payments made in October for purchases.
A) $44,700
B) $68,020
C) $37,720
D) $75,220
Q2) What is the final step in the master budget process?
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Page 7
Chapter 23: Flexible Budgets and Standard Cost Systems
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Sample Questions
Q1) A new factory manager was hired for a company that was experiencing slow production rates and lower production volumes than demanded by management.Upon investigation,the manager found that the workers were poorly motivated and not closely supervised.Midway through the quarter,an incentive program was initiated,and cash bonuses were given when workers hit their production targets.Within a short time,production output increased,but the bonuses had to be charged to the direct labor budget,and the manager was worried about the impact of these costs on operating income.This could produce a(n)________.
A) unfavorable direct materials cost variance
B) unfavorable direct materials efficiency variance
C) favorable direct labor efficiency variance
D) favorable direct labor cost variance
Q2) A static budget presents financial data at multiple levels of sales volume.
A)True
B)False
Q3) When investigating overhead variances,management needs to determine whether cost increases were controllable or if the cost standard needs to be updated.
A)True
B)False
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Page 8
Chapter 24: Cost Allocation and Responsibility Accounting
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Sample Questions
Q1) Manufacturing overhead costs,which are also known as indirect costs,cannot be cost-effectively traced to products.
A)True
B)False
Q2) Net income is used in the numerator of the return on investment formula.
A)True
B)False
Q3) Which of the following is a disadvantage of decentralization?
A) It results in increased customer response time.
B) It allows only the top management to make decisions.
C) It does not motivate employees because the decision-making powers are not delegated.
D) It results in problems with achieving goal congruence.
Q4) Management by exception directs the management's attention to important differences between the actual and the budgeted amounts.
A)True
B)False
Q5) Why is using a single plantwide predetermined overhead allocation rate not always accurate?
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Chapter 25: Short-Term Business Decisions
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Sample Questions
Q1) Gnome Company is deciding whether to continue to manufacture a component or to buy the component from a supplier.Which of the following is relevant to this decision?
A) the potential uses of the facilities that are currently used to manufacture the component
B) the insurance on the manufacturing facility that will continue regardless of the decision
C) fixed costs that do not differ between the alternatives
D) the cost of the equipment that is currently being used to manufacture the component
Q2) A company produces 1,000 packages of chicken feed per month.The sales price is $4.00 per pack.Variable cost is $1.60 per unit,and fixed costs are $1,700 per month.Management is considering adding a vitamin supplement to improve the value of the product.The variable cost will increase from $1.60 to $1.70 per unit,and fixed costs will increase by 20%.The company will price the new product at $6 per pack.How will this affect operating income?
A) Operating income will decrease by $1,560 per month.
B) Operating income will remain unchanged.
C) Operating income will decrease by $40 per month.
D) Operating income will increase by $1,560 per month.
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Page 10
Chapter 26: Capital Investment Decisions
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Sample Questions
Q1) Which of the following two methods are typically used for initial screening of investments,rather than for detailed,in-depth analysis?
A) payback and accounting rate of return
B) net present value and payback
C) internal rate of return and net present value
D) accounting rate of return and net present value
Q2) The accounting rate of return shows the effect of the investment on the company's accrual-based income.
A)True
B)False
Q3) All else being equal,the shorter the investment period,the higher the total amount of interest earned.
A)True B)False
Q4) The accounting rate of return is calculated by dividing the average annual operating income by the average amount invested.
A)True
B)False
Q5) What are the strengths of the net present value capital budgeting method?
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