# Managerial Accounting Test Questions – Flashcards

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question
A company sells pretzels for \$1.50/bag. Their February ending inventory was \$1,600. Marketing prepares the following forecast: January 15,000 bags February 12,000 bags March 16,000 bags Total 43,000 bags Projected sales for April are 13,000 bags. Try to maintain 10% of the next month's forecasted sales in inventory. What is the projected for March?
(c) 15,700 April (10%) 13,000 * 10% = 1,300 March 16,000 February (Ending Inventory) (1,600) 1,300 + 16,000 - 1,600 = 15,700
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2. Same info as no 1. What is the sales budget for January?
24,300 January 15,000 February (10%) 12,000 * 10% = 1,200 15,000 + 1,200 = 16,200 16,200 * \$1.50 = \$24,300
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Budgets are
(d) Uses by individual, staffs, managers department.
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Management accountant place more emphases on which of the following:
b. future activities
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A listing of line item that the organization will use to classify its accounting information is?
a. balance sheet
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RABBIT, long question, the answer is
(c) \$11.00
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The brothers sell pretzels for \$150 per bac, marketing prepares the following sales forecast for the 1st quarter of the year
D. 6,450,000 (15,000 + 12,000 + 16,000 = 43,000 43,000 * 150 = 6,450,000)
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Compute the fixed cost? DM 100,000 DL 150,000 Overhead 75,000 Sales 120,000
x Fixed cost will be Overhead 75,000. If answer is not 75,000 then "None of above"
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10. The primary purpose for carrying on "cost accounting activity" is
C. To plan operation
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NPV and IRR not TRUE
(c) NPV alone can be used to compare investments of different sizes.
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Company Z (long question) What is the fixed cost?
d. 20% of the sales revenue
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Cost volume profit (CVP) analysis to answer which of the following
b) What sales volume is needed to make a desired profit? c) Given a sales volume, what is the expected profit? d) How could changes in price, VC, TF and output affect profit? e) ALL
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The amount of overhead applied to a product or service is normally calculated by
a. Divide estimate overhead by estimated units of the cost driver.
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Comparing actual outcomes with budget outcomes, then following up, is a example of
b. operating activities
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Which of the following is typically a starting point for the budget process?
b. a sales budget
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Selected sales and cost data for a special job are given below Direct material used 100,000 Direct labor 150,000 Factory overhead (100% direct, 40% variable) 75,000 Selling and administration (50% direct, 60% variable) 120,000 Complete the Total Cost:
c. 352,000 100,000 + 150,000 + 30,000 (75,000 *40%) + 72,000 (120,000 *60%)
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Tax accounting is generally most used by:
d. Internal revenue service (IRS)
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The term "product cost" as used in cost and managerial accounting context means.
d. all manufacturing or production cost of the product
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Which of the following organization would be most likely to adopt a process costing system?
c. paper manufacture
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The discount rate for use in capital budgeting decision is also referred to as
d. the minimum required rate of return
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. Scuffy has the following product information. Sales price \$7.50 per unit Variable cost \$2.25 per unit Fixed cost \$10,000 Units sold 20,000 What is break-even point in sales?
b.1905 Fixed Cost / (Price - Variable Cost) 10,000 / (7.50 - 2.25) = 1905
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What is total contribution margin?
105,000 Contribution margin = Sales Revenue - Variable Expense (\$7.50 * 20,000) - (\$2.25 * 20,000) = 105,000
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Which of the following is referring Management Accounting?
B. Is not subject to GAAP
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The main purpose of management accounting is to provide information to?
Managers
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. The sum of direct materials plus Direct Labor is classified
D. Prime Cost
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Zero based budget?
B. Require mangers to build budget from the ground up
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Which of the following pairs most accurately represents the ease of traceability cost?
B. Variable costs and Fixed costs
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Find cost volume profit (CVP)
b. Variable and fixed cost
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Over and Under Over Head occurs when?
a. when either the overhead cost driver are estimated incorrectly
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Chief Accounting officer in an organization is :
Controller
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Financial accounting information is most generally most useful to:
a) external parties
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. The cost of rent for manufacturing plant is generally considered to be Prime Cost Product Cos
a) no yes
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All the following are period cost except:
c) factory rent
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Which of the following would most likely classified as direct material cost
b) an engine in a custom automobile
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Pairs that most accurate for the cost volume analysis
b) fixed cost and variable cost
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Target pricing:
A. target cost + target profit
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. Huts sells hot dog \$2/each. The variable cost is \$1 and \$0.35 is fixed overhead cost. A summer camp wishes to buy 100 hot dogs for \$1.25/each. What is the profit for hut?
C. decrease by \$10 (1.25 - 1 - 0.35 = - 0.10 - 0.10 * 100= - 10)
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Initial cash cost of investment \$75,000 Estimated annual cash savings \$18,000 Predicted residual value at the end of life \$3,000 Estimated useful life 2 years Cost of capital 12% If Present Value factor of an annuity of \$1 at 12% and 7 years is 4.564 and the present value factor of a payment of \$1 at 12% and 7 years is 0.452. What is the total present value of the estimated cash inflow?
D. \$83,508
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If the discount rate the present value of an annuity of \$1 at 12% for 8 years is 4.968 what is the present value of the salvage value?
E. the answer can't be compute (Missing salvage value)
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kamp corporation has the following info Unit sales price \$10 Total fixed cost \$50,000 Variable cost per input \$6 Compute contribution margin?
D. \$4 (Contribution margin = Sales revenue - Variable expense 10 - 6= 4)
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What is the variable cost ratio?
C. 60% (Variable Cost / Sales Price) * 100 6/10 *100 = 60
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Which phrase best describes the current role of a management accountant in an organization?
D. managerial accountants facilitate the decisions for an organization
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Determine DL used for month? (Given Data was something similar to below but instead of calculating DM used, question was to calculate DL used for month) Hilton Corporation had sales revenue of \$1,105 for the month. Marketing expenses for the month were \$60 and administrative expenses were \$50 Inventory classification 1st day of the month end of month Direct material \$60 \$70 Work in process 120 115 Finished goods 150 165 6 During the month, Hilton purchased \$250 of raw materials and spent \$400 of direct labor. Other manufacturing costs such supervisory salaries and utilities were \$90 and plant equipment depreciation was \$100. Direct materials used for the month are?
A. 240 (Beg + Purchase) - End (60 + 250) - 70 = 240
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A thing of value that is owned by an organization and is expected to provide future benefit is classified as which of the following?
A. asset
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A quantified plan of action for management is
D. budget
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Which equation best represents the basic production budget?
C. Sales budget in units + (target) projected ending inventory units - beginning inventory units.
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Selected sales and cost data for a special job are below Direct materials used \$100,000 Direct labor 150,000 F overhead (100% indirect, 40% variable) 75,000 Selling and administration (50% direct, 60% variable) 120,000 Compute the period costs?
\$120,000 (Because they ask only Period Costs, so it is 120,000. If they ask Direct Period Costs then we need to do (120,000 * 50% = 60,000)
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Selected sales and cost data for a special job are below: Direct materials used \$100,000 Direct labor 150,000 F overhead (100% indirect, 40% variable) 75,000 Selling and administration (50% direct, 60% variable) 120,000 Compute the prime costs?
a. 250,000 (Prime Costs = Direct Material + Direct Labor 100,000 + 150,000 = 250,000)
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Ethics' is true.
(b) Ethical issues frequently arise in the course of a management accountant's work
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In theory, what is a sacrifice made when we give up a resource to obtain a resource that will benefit the firm.
(b) A cost
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Cost information-
(c) Is used by managers across an organization.
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A predetermined overhead rate is equal to
(a) Estimated overhead y estimated units of the cost driver
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D.M -- \$7000 D.L -- \$2000 M. Overhead - \$10,000 Work-in-process (bb) \$ ? End work in process \$4000 C.G.M \$18,000 Revenue \$25,000 F.Goods(bb) \$6,000 C.G.S \$ ? F. Goods(eb) \$9,000 Operating expense \$6000 Net income \$ ? Gross margin (profit) \$ ? What is the cost of goods sold?
15,000 COGS = Beg Inv. + Purchase - End Inv. 6,000 + 18,000 - 9,000 = 15,000
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The primary purpose(s) for carrying on "Cost Accounting" activities is/are
(D) To control operation.
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Which of the following is true?
(a) Factories already running at full capacity should have increased fixed costs if new special orders are accepted.
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Which pricing equation is correct for "Target pricing"?
Answer: None are correct Target pricing (per unit) = Target cost per unit + Target operating income
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If the net present value of an investment is less than 0, and the cost of capital (K) is 16%, then the internal rate of return would
(b) Less than 16%
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. If the Net Present Value of an investment is greater than "0" and the cost of capital (K) is 16%, then the time adjusted rate of return would be
d. Cannot be determined with the information provided
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. The following information is provided for company Z. Total % Sales revenue (1,500 units) \$37,500 Variable costs \$15,000 40 Contribution Margin \$22,500 Fixed cost \$15,000 Net income \$7,500 What are the fixed costs per unit?
(a) \$10.00 (Fixed Cost / No of units 15,000 / 1,500 = 10)
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Same data as Question # 68. What is the price per unit?
(d) 25 (37,500 / 1,500 = 25)
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Classified as a "Period cost" Period cost =
Variable cost + Manufacturing overhead. Period cost: Operating costs that are expensed in the period in which they are incurred
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Total Contribution margin:
Sales revenue - Variable expense
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Budget:
The budget is a financial plan. The budgeted sales and cost data help managers plan the hotel's target profit (revenues - expenses)
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Manager should use budget for which -
Control operations.
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Break-even sales in units:
The number of units you need to sales in break-even.
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Break-even Point:
The sales level at which operating income is zero. Total revenues = total expenses.
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The going concern assumption assures that the loss
d. Will remain in operation for the foreseeable future
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An increase in the discount rate:
(c) Will decrease the future value of the cash flow (if this answer is not given) Then, None of the above
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82. Which of the following does not appear in financial statement service?
e. Capital Accounts
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83. Cost infor
a. Is important for manufacture companies.
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84. Which of the following is not a capital budgeting method?
e. Excess present value index.
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85. Period Cost
c. Depreciation on assembly equipment.
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86. Tax account information is used by
b. Managers
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Which one of the following regarding ethics is true?
d. . Most managers with in an organization are likely to agree on ethical issues
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Hilton Corporation had sales revenue of \$1,105 for the month. Marketing expenses for the month were \$60 and administrative expenses were \$50 Inventory classification 1st day of the month end of month Direct material \$60 \$70 Work in process \$120 \$115 Finished goods \$150 \$165 During the month, Hilton produced and transferred into finished Goods units with a cost of \$915. The cost of goods sold for the month was?
D. \$900
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A cost that is not a "Product Cost"?
d. Computer depreciation
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David has the following product information. Sales price 7.50 a unit Variable cost 2.25 a unit Fixed cost \$10,000 Units sold 20,000 What is the contribution margin ratio?
C. 70% CM = Price - Variable Cost CM = 7.50 - 2.25 = 5.25 CM Ratio = (CM / Sales) * 100 CM Ratio = (5.25 / 7.50) * 100 = 70
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What is the contribution margin per unit?
b. 5.25
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In setting the price of a particular product / service for the congress, which of the following should represent the best cost basis?
e. Production market and administrative cost
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42. An alternate name for the "Time Adjusted rate of return is:
e. The internal rate of return
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43. What type of their special short run decision is most likely to be needed to make:
c. Make it yourself or buy it from out side
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44. Which of the following is most representative of what is a summary cash budget?
All
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47. Which of the following accounting is in the Calculation of working capital:
c. Merchandise Inventory
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4. Sum of direct labor plus manufacturing overhead is classified
B. Conversion cost
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8. Sales revenue is 40,000 for period, variable expanses are 30,000, `fixed exp. 7,500. Net income before taxes would be?
C. 2,500 40,000 - 30,000 - 7,500 = 2,500
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14. Liability of a company are owned
C. Creditors
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2. Balance sheet shows
D. Assets liabilities and stockholder equity
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Which of the following isn't accounting assumption?
A. Integrity
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12. Expexted future cost that differ between decision alternatives at hand are know
D. Relevant cost
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Nik's beginning equity 4,350 million; Net income 490 million dividends withdraw 100 million. Increase in equity due to the times 50 million. Its ending equity is?
A. 3,810 million 4,350 - 490 - 100 + 50 = 3,810
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Rules adopted by the accounting professor as guides in preparing financial statements are
B. Known as general accepted accounting principle
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The principle that requires every business to be accounted for separately and distinctly from it's owner or owners is known as the
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B. Estimated overhead / estimated units of the cost driver.
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Job cost system
a. custom home builder
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6. Cost Accounting
e. all a. set asset values b. measure income c. plan operation d. control operation
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Which of the following statement is true about Ethics? .
a. Managerial Acc
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Future cost differ between alternations
d. relevant cost
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10. Monetary amount