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Management Accounting > Managerial Accounting > Flashcards

Managerial Accounting Flashcards

1
Q 
Which of the following is referring Management Accounting?
A. Is required by law 
B. Is not subject to GAAP 
C. Primarily stands by it self 
D. Is and end itself 
E. Emphasis on the part
A

Is not subject to GAAP

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2
Q

Zero based budget?
A. Start the budget process from last years number
B. Require mangers to build budget from the ground up
C. Are used primarily to invest short term cash
D. Involve planning for long same inventory

A

Require mangers to build budget from the ground up

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3
Q 
The primary purpose for carrying on "cost accounting activity" is
A. T set asset values
B. To measure in cost or core
C. To plan operation
D. To control operation
A

C. To plan operation

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4
Q

NPV and IRR not TRUE

A

NPV alone can be used to compare investments of different sizes.

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5
Q 
Cost that are always relevant in making decisions are
A. cost incurred each period 
B. Cost that can be avoided
C. cost that are sunk 
D. cost that are fixed
A

B.Cost that can be avoided

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6
Q
  1. Cost volume profit (CVP) analysis to answer which of the following
    a) What sales volume is needed to break even (NOTA)
    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
A

e all

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7
Q
  1. 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.
    b. Multiply estimate overhead by estimate units of the cost driver.
    c. Divide the predetermined overhead rate by the actual units of the cost driver.
    d. Multiply the predetermined overhead rate by the actual units of the cost driver.
    e. Multiply the actual overhead rate by the predetermined overhead rate
A

a. Divide estimate overhead by estimated units of the cost driver.

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8
Q
  1. Comparing actual outcomes with budget outcomes, then following up, is a example of a
    a. planning activities
    b. operating activities
    c. controlling activities
    d. accounting activities
    e. staffing activities
A

c. controlling activities

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9
Q
  1. Which of the following is typically a starting point for the budget process?
    a. A summary cash budget
    b. A sales budget
    c. A budget balance sheet
    d. A production budget
    e. A materials purchase budget
A

b. A sales budget

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10
Q
  1. The term product cost as used in cost and managerial accounting context means
    A. All cost of producing, selling and support a product
    B. An expense
    C. A variable cost
    D. All manufacturing or production cost of the product
    E. All fixed cost associated with a product
A

D. All manufacturing or production cost of the product

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11
Q 
30. Which of the following pairs most accurately represents the ease of traceability cost?
A.	Direct costs and Indirect costs
B.	Variable costs and Fixed costs
C.	Product costs and Period costs 
D.	Standard costs and Operation costs 
E.	Sunk costs and Incremental costs
A

A. Direct costs and Indirect costs

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12
Q
  1. Chief Accounting officer in an organization is:
    a) Vice President of Finance
    b) Treasurer
    c) Controller
    d) General Accounting manager
    e) tax manager
A

c) Controller

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13
Q
  1. Financial accounting information is most generally most useful to:
    a) external parties
    b) internal parties
    c) environmentalist
    d) government agencies
    e) management decision maker
A

a) external parties

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14
Q
  1. All of the following are period cost except:
    a) order getting costs
    b) order delivery cost
    c) factory rent
    d) advertising cost
    e) administrative cost
A

c) factory rent

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15
Q
  1. Pairs that most accurate for the cost volume analysis
    a) direct cost and indirect cost
    b) fixed cost and variable cost
    c) product cost and period cost
    d) standard cost and operation cost
    e) sunk cost and incremental cost
A

b) fixed cost and variable cost

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16
Q 
40. 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 hotdogs for $1.25/each. What is the profit for hut?
A. increase by $25 
B stay the same
C decrease by $10 
D decrease by $65
E none
A

C decrease by $10

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17
Q
  1. 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 7 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 1§2% and 7 years is 0.452. What is the total present value of the estimated cash inflow?
    A 4,167 years
    B $82,152
    C $1,356
    D $83,508
    E $8,508
A

D $83,508

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18
Q 
43.  Lamar’s discount rate 12 %. 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?
A $99,360
B 10 
C $248,400
D $596,160	
E the answer can’t be compute
A

E the answer can’t be compute

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19
Q
  1. Which phrase best describes the current role of a management accountant in an organization?
    A. managerial accountants prepare the financial statements for publication
    B. managerial accountants are primarily information collectors.
    C. managerial accountants make key decisions for an organization.
    D. managerial accountants facilitate the decisions for an organization
    E. managerial accountants file the organization tax returns.
A

D. managerial accountants facilitate the decisions for an organization

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20
Q
  1. 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 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                       
B. 285
C. 590
D. 640
E. 830
A

A. 240

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21
Q 
48. 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
B. liability
C. equity
D. revenue
E. expense
A

A. asset

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22
Q 
49. A quantified plan of action for management is 
A. certified balance sheet
B. certified income statement
C. statement of cash flows
D. budget
C. cost of production report
A

D. budget

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23
Q
  1. Which equation best represents the basic production budget?
    A. Sales forecast in units - projected ending inventory - beginning inventory
    B. Total projected production needs - beginning inventory + projected ending inventory
    C. Sales budget in units + (target) projected ending inventory – beginning inventory
    D. Projected production volume – projected ending inventory – beginning inventory
    E. Sales budget in units + projected ending inventory – projected ending inventory
A

C. Sales budget in units + (target) projected ending inventory – beginning inventory

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24
Q
  1. Selected sales and cost data for a special job are belowDirect 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?
A. 120,000
B. 60,000
C. 75,000
D. 95,000
A

120,000 because they only ask for period cost if they ask for direct period cost then answer is 60,000

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25
Q
  1. 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) $6000
    C.G.S $ ? F. Goods(eb) $9000
    Operating expense $6000 Net income $ ?
    Gross margin (profit) $ ?
    What is the cost of good sold?
A

15,000

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26
Q 
63. The primarily purpose for carrying on cost Accounting activities are?e9
A. T set asset values
B. To measure in cost or core
C. To plan operation
D. To control operation
A

C. To plan operation

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27
Q
  1. 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 be –
A

A. Less than 16%

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28
Q
  1. 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
A

D. Cannot be determined with the information provided.

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29
Q
  1. The following information is provided for company Z.
    Per unit Total %
    Sales revenue (1500 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? (RESULT= 15000/1500)
A

(a) $10.00

30
Q
  1. The following information is provided for company Z.
    Per unit Total %
    Sales revenue (1500 units) $37,500
    Variable costs . $15,000 40
    Contribution Margin $22,500
    Fixed cost $15,000
    Net income $7,500
    What is the price per unit?
A

(d) 25 ( 37,500/1500)= 25

31
Q 
73. Manager should use budget for which
A. Control Operation
B. Production Operations
C. None of them 
D. Plan Operations
A

Control operations.

32
Q
  1. The going concern assumption assures that the loss
A

D. Will remain in operation for the foreseeable future

33
Q
  1. An increase in the discount rate:
A

C. Will decrease the future value of the cash flow (if this and not given) Then None of the above

34
Q
  1. The amount of overhead applied to a product or service is normally calculated by
A

a. Dividing estimated overhead by estimated units of the cost driver.

35
Q
  1. Which of the following does not appear in financial statement service
A

e. Capital Accounts

36
Q

A cost that is not a “Product Cost”?

A

d. Computer depreciation

37
Q
  1. Tax account information is used by
A

b. Managers

38
Q 
88. 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 per unit?
Unit CM = Price – variable cost 
a)	7.50
b)	5.25
c)	9.75
d)	4.75
e)	None
A

b) 5.25

39
Q
  1. In setting the price of a particular product / service for the congress, which of the following should represent the best cost basis?
    a. Product / service cost
    b. Marketing cost
    c. Administrative cost
    d. Production market cost
    e. Production market and administrative cost
A

e. Production market and administrative cost

40
Q 
99. Which of the following is a present value method and capital investments
A. Average rate of return
B. Accounting rate of return
C. Cash payback method
D. Net present value
E. Payback reciprocal
A

D. Net present value

41
Q 
100.  Sales revenue is 40,000 for period, variable expanses are 30,000, fixed exp. 7,500. Net income before taxes would be?
A. 10,000
B. 37,500
C. 2,500
D. 7,500
E. 30,000
A

C. 2,500

42
Q 
101. Liability of a company are owned
A. Debits
B Owners
C. Creditors
D. Stockholders
A

C. Creditors

43
Q
  1. In the long run product sales price must be sufficient to cover
    A. Design cost
    B. Manufacturing cost
    C. Marketing cost
    D. Serving cost
    E. All of the all 4 of the other answers need to be covered
A

E. All of the all 4 of the other answers need to be covered

44
Q 
106. Expected future cost that differ between decision alternatives at hand are known as
A. Sunk cost
B. Prime cost
C. Period cost  
D. Relevant cost
E. Indirect cost
A

D. Relevant cost

45
Q 
107. Sales revenue 40,000, variable expense 30,000, fixed expense for the period are 7,500, breakeven point before taxes?
A. 10,000
B. 37,500
C. 2,500
D. 7,500
E. 30,000
A

D. 7,500

46
Q 
109. Niki’s beginning equity 4,350 million, Net income 490 million dividends withdraw 100 million.  Increase in equity due to the times 50 million.  It’s ending equity is?
A. 3,810 million   
B. 4,690 million
C. 470 million
D. 4,990 million
E. 371 million
A

A. 3,810 million

47
Q
  1. Long – term investment decision require consideration of
    A. Time value of money
    B. Cost behavior
    C. Forecasted cash flow
    D. Relevant cost
    E. All of the other answers should be considered
A

C. Forecasted cash flow

48
Q
  1. Rules adopted by the accounting professor as guides in preparing financial statements are
    A. Comprised of both general and specific principles
    B. Known as general accepted accounting principle
    C. Abbreviated as GAAP
    D. Intended to make information in financial statement.
    E. All
A

E. All

49
Q 
111. The principle that requires every business to be accounted for separately and distinctly from it’s owner or owners is known as the
A. Objective
B. Business entitle     
C. Going concern 
D. Revenue recognition 
E Cost
A

B. Business entitle

50
Q 
112. The concept that a business has a reasonable expectation of remedy in business for the forceable future is called? 
A. Economic entitle assumption
B. Monetary unit (WA)  
C. Time period
D. going concern 
E. None.
A

D. going concern

51
Q
  1. Which of the following accounting is in the Calculation of working capital:
    a. R/E
    b. Sales
    c. Merchandise Inventory
    d. Common stock
    e. Long-term debt
A

c. Merchandise Inventory

52
Q
  1. Which of the following is most representative of what is a summary cash budget?
    a. cash flow from activities
    b. cash flow from O/P
    c. cash flow from Investing activities
    d. cash flow from Borrowing activities
    e. All
A

e. All

53
Q
  1. Cost volume profit analysis attempt to answer which of the following:
    a. which sales volume is needed to break even.
    b. which sales volume is needed to make a desire profit.
    c. Given the sales volume, what is expected profit.
    d. How would change in price, variable cost, and out put affect profit
    e. All
A

e. All

54
Q
  1. An alternate name for the “Time Adjusted rate of return is:
    a. Cost of capital
    b. The hurdle rate
    c. The minimum rate of return
    d. The investment burden rate
    e. The internal rate of return
A

e. The internal rate of return

55
Q 
10. Broihan Corporation has the following purchases budget for the last half of 2002: 
July $100,000 
August $80,000 
September $110,000
October $ 90,000  
November $100,000   
December $94,000
Historically, the company pays one half at the time of purchase and the remainder in the month following purchase.
What are the expected cash disbursements in August? 
a. $ 80,000.
b. $ 90,000. 
c. $ 95,000. 
d. $100,000 
e. $105,000
A

b. $ 90,000.

56
Q 
39. Target pricing:
A target cost + target profit
B target cost – target profit 
C target cost – target profit
D Target cost= target price-target profit
E none are correct
A

E) none are correct

57
Q
  1. The cost of rent for manufacturing plant is generally considered to be
    Prime Cost Product Cost
    a) no yes
    b) no no
    c) yes no
    d) yes no
    e) manufacturing plant rent is not normally either of the 4 answers
A

a) no yes

58
Q

1.Ringle Brothers sells pretzels for $1.50 per bag. The marketing department prepared the following first quarter sales forecast:
January 15,000 bags
February 12,000 bags
March 16,000 bags
Projected sales for April are 13,000 bags. If the company tires try to maintain 10% of the next month’s forecasted sales in inventory, what is the projected production for March?
A. 14,800
B. 16,000
C. 15,700
D. It cannot be determined from the information provided

A

C. 15,700
April 13,000 (0.10) = 1300 [ 10% = 0.10]
16,000 + 1,300 = 17,300, 17,300 – 1600(march*0.10) = 15,700

59
Q 
2. Ringle Brothers sells pretzels for $1.50 per bag. The marketing department prepared the following first quarter sales forecast:
January		15,000 bags
February		12,000 bags
March			16,000 bags
Projected sales for April are 13,000 bags. If the company tires try to maintain 10% of the next month’s forecasted sales in inventory, what is the sales budget for January?
A. 22,500
B. 33,000
C. 18,850
D. 29,700
A

A. 22,500

60
Q 
8.  The brothers sell pretzels for $1.50 per bag; marketing prepares the following sales forecast for the 1st quarter of the year.   jan 15000, feb 12000, march 16000. What is the sales budget for the 1st quarter? 
A. 64,500
B. 78,950
C. 61,400
D. 80,950
A

( 15000+12000+16000= NUMBER * 1.5 THEN ADD THE RESULT TO THE NUMBER ) P*Q
A. 64,500

61
Q
  1. Company Z (long question) What are the fixed cost?
A

20% of the sales revenue

62
Q 
44.  Kamp corporation has the following info
Unit sales price 		$10
Total fixed cost 		$50,000
Variable cost per input 	$6
Compute contribution margin?  Contribution margin = Sales revenue – Variable expense         $4    (10 – 6) 
A $10
B $6
C $5
D $4
E $3
A

D $4

63
Q

The Unique Bookshelf Company is considering the purchase of a custom delivery van costing approximately $50,000. Using a discount rate of 20%, the present value of future cost savings is estimated at $51,200. To yield the 20% return, the actual cost of the van should not exceed the $50,000 estimate by more than:

a. $50,000
b. $51,200
c. $25,000
d. $ 1,200
e. 20%

A

d. $ 1,200

64
Q

Management accountant place more emphases on which of the following:

a. certified financial statement
b. future activities
c. historical cost information
d. cash flow
e. annual tax returns

A

b. future activities

65
Q

A listing of line item that the organization will use to classify its accounting information is?

a. balance sheet
b. income statement
c. chart of accounts
d. schedule of cash flows
e. production cost response

A

a. balance sheet

66
Q

The brothers sell pretzels for $150 per bac, marketing prepares the following sales forecast for the 1st quarter of the year.
Jan 15,000 Feb 12,000 March 16,000.
What is the sales budget for the 1st quarter?

A

6,450,000

(15,000 + 12,000 + 16,000 = 43,000 43,000 * 150 = 6,450,000

67
Q

Compute the fixed cost?

DM 100,000 DL 150,000 Overhead 75,000 Sales 120,000

A

Fixed cost will be Overhead 75,000. If answer is not 75,000 then “None of above”

68
Q

The discount rate for use in capital budgeting decision is also referred to as

a. a cost of capital
b. the cost of capital
c. the hurdle rate
d. the minimum required rate of return
e. all none

A

d. the minimum required rate of return

69
Q 
kamp corporation has the following info
Unit sales price $10
Total fixed cost $50,000
Variable cost per input $6
Compute contribution margin?
A. $10
B. $6
C. $5
D. $4
E. $3
What is the variable cost ratio?
A. 100%
B. 40%
C. 60%
D. 75%
A

D. $4

C. 60%

70
Q

In theory, what is a sacrifice made when we give up a resource to obtain a resource that will benefit the firm.

A

A cost

71
Q

Which of the following is not a capital budgeting method?

A

External accounting factor method.

Management Accounting (2 decks)

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