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Managerial Accounting Flashcards

1
Q

Which phrase best describes the current role of the managerial accountant? a. Managerial accountants prepare the financial statements for an organization. b. Managerial accountants facilitate the decision-making process within an organization. c. Managerial accountants make the key decisions within an organization. d. Managerial accountants are primarily information collectors. e. Managerial Accountants are solely staff advisors in an organization.

A

b. Managerial accountants facilitate the decision-making process within an organization.

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2
Q

An example of qualitative data is: a. product cost b. customer satisfaction c. net income d. inventory cost e. net worth.

A

b. customer satisfaction

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3
Q

Product and service costing information is prepared for a. manufacturing companies with inventory. b. merchandising companies. c. service providers. d. each of the other four answers. e. manufacturing companies without inventory.

A

d. each of the other four answers.

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4
Q

Manufacturing costs typically consist of a. direct materials, direct labor, and manufacturing overhead. b. production and shipping costs. c. production and marketing costs. d. direct materials, direct labor, and administrative costs. e. direct materials, direct labor, marketing and administrative costs.

A

a. direct materials, direct labor, and manufacturing overhead.

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5
Q

In comparison to the traditional manufacturing environment, overhead costs in a JIT environment all the following are true except: a. are more easily tracked to products. b. are frequently direct in nature. c. include rent, insurance and utilities. d. most of the costs are likely to be indirect in nature. e. labor need not be tracked to the product.

A

d. most of the costs are likely to be indirect in nature.

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6
Q

As production increases within the relevant range, a. variable costs will vary on a per unit basis. b. variable costs will vary in total. c. fixed costs will vary in total. d. fixed and variable cost stay the same in total. e. none of the other four answers is true.

A

b. variable costs will vary in total.

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7
Q

You are given the cost and volume information below: Volume 1 unit 10 units 100 units What type of a cost is given? a. fixed cost b. variable cost c. step cost d. mixed cost e. rent cost.

A

b. variable cost

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8
Q

Which of the following statements regarding graphs of fixed and variable costs is true? a. Variable costs can be represented by a straight line where costs are the same for each data point. b. Fixed costs can be represented by a straight line starting at the origin and continuing through each data point. c. Fixed costs are zero when production is equal to zero. d. Variable costs are zero when production is equal to zero. e. Fixed and Variable costs are curvilinear form above zero on the “Y” axis.

A

d. Variable costs are zero when production is equal to zero.

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9
Q

All of the following statements regarding budgeting is true except a. Budgeting helps managers determine the resources needed to meet their goals and objectives. b. Budgeting is a key ingredient in good decision-making. c. Budgeting is a bookkeeping task d. The focus of budgeting is planning. e. Budgeting is an executive responsibility.

A

c. Budgeting is a bookkeeping task

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10
Q

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. 100000/2+80000/2 50000+40000 90000

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11
Q

The time value of money focuses on a. accounting net income. b. earnings per share. c. cash flow. d. current earnings e. accrual net income.

A

c. cash flow.

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12
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 51,200-50000=1200

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13
Q

Budgets are

A

Uses by individual, staffs, managers department.

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14
Q

Management accountant place more emphases on which of the following: a. certified financial statement b. future activities c. historial cost information d. cash flow e. annual tax returns

A

b. future activities

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15
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

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16
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

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17
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”

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18
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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19
Q

Cost volume profit (CVP) analysis to answer which of the following a) What sales volume is needed to break even 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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20
Q

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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21
Q

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

A

c. controlling activities

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22
Q

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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23
Q

Tax accounting is generally most used by: a. Share holder b. Manager c. Creditors d. Internal revenue service (IRS) e. Decision makers

A

d. Internal revenue service (IRS)

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24
Q

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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25
Q

Which of the following organization would be most likely to adopt a process costing system? a. customer homebuilder b. law office c. paper manufacturer d. dental office e. TV sale and services organization

A

c. paper manufacturer

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26
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

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27
Q

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? a. 1333 b. 1905 c. 10000 d. 20000

A

b. 1905 fc/p-vc

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28
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

B. Is not subject to GAAP

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29
Q

The main purpose of management accounting is to provide information to? A. Shareholders B. Managers C. Creditors D. Government Agencies E. All of the above

A

B. Managers

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30
Q

The sum of direct materials plus Direct Labor is classified A. Product cost B. Conversion Cost C. Period Cost D. Prime Cost E. Manufacturing Cost

A

D. Prime Cost

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31
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

B. Require mangers to build budget from the ground up

32
Q

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

33
Q

Over and Under Over Head occurs when? a. when either the overhead cost driver are estimated incorrectly b. when actual cost are equal to estimate cost c. when the amount of the estimated cost driver equals the amount of the cost driver d. not often e. when estimated overhead and the estimated cost driver are forecasted perfectly.

A

a. when either the overhead cost driver are estimated incorrectly

34
Q

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

35
Q

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

36
Q

All 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

37
Q

Which of the following would most likely classified as direct material cost? a) factory supplies b) an engine in a custom automobile c) depreciation in the assembly group d) Advertising expenses e) none

A

b) an engine in a custom automobile

38
Q

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

39
Q

Target pricing: A. target cost + target profit B. target cost – target profit C. target cost – target profit D. Target cost = target price - target profit

A

A. target cost + target profit

40
Q

Lamar’s disc 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

41
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 contribution margin=sales revenue - variable expense 10-6=4 C. 60% (variable cost/sales price)*100 6/10*100=60

42
Q

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

43
Q

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

44
Q

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

45
Q

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 units – beginning inventory units. 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 units – beginning inventory units.

46
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

47
Q

Cost information is…

A

used by managers across an organization.

48
Q

A predetermined overhead rate is equal to

A

Estimated overhead estimated units of the cost driver

49
Q

Which pricing equation is correct for “Target pricing”?

A

Target pricing = Target cost per unit + Target operating income

50
Q

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

Less than 16%

51
Q

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

A

$10.00 FC/#of units 15000/1500=10

52
Q

Total Contribution margin Formula

A

Sales revenue – Variable expense

53
Q

An increase in the discount rate:

A

Will decrease the future value of the cash flow

54
Q

Which of the following does not appear in financial statement service?

A

Capital Accounts

55
Q

Which of the following is not a capital budgeting method?

A

Excess present value index.

56
Q

Period Cost

A

Depreciation on assembly equipment.

57
Q

A cost that is not a “Product Cost”?

A

Computer depreciation

58
Q

Contribution margin ratio formula

A

Price-Variable cost

59
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

60
Q

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

61
Q

What type of their special short run decision is most likely to be needed to make: a. Accept reject a special order b. Bring standard product c. Make it yourself or buy it from out side d. Sell now or process future e. All

A

a. Accept reject a special order

62
Q

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

63
Q

Unplanned uses of organization recourses, usually measured by the resources given up is defined as? a. An expenses b. A cost c. A loss d. A production cost e. A period cost

A

d. A production cost

64
Q

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

65
Q

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

A

D. Net present value

66
Q

Sum of direct labor plus manufacturing overhead is classified A. Product cost B. Conversion cost C. Period cost D. Prime Cost E. manufacture cost

A

B. Conversion cost

67
Q

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 40,000 - 30,000 - 7,500 = 2,500

68
Q

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

A

C. Creditors

69
Q

Balance sheet shows A. Revenue liability and stokehold equity B. Expense dividend and stockholder equity. C. Revenue expense and dividend. D. Assets liabilities and stockholder equity E. None

A

D. Assets liabilities and stockholder equity

70
Q

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 B. 4,690 million C. 470 million D. 4,990 million E. 371 million

A

A. 3,810 million 4,350 – 490 – 100 + 50 = 3,810

71
Q

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

B. Known as general accepted accounting principle

72
Q

The concept that a business has a reasonable expectation of remedy in business for the force able future is called? A. Economic entitle assumption B. Monetary unit C. Time period D. going concern E. None.

A

A. Economic entitle assumption

73
Q

Predetermined overhead is equal to

A

Estimated overhead / estimated units of the cost driver

74
Q

Cost Accounting a. set asset values b. measure income c. plan operation d. control operation e. all

A

e. all

75
Q

Future cost differ between alternations a. sunk cost b. prime cost c. period cost d. relevant cost e. indirect cost

A

d.relevant cost

76
Q

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 above

A

E. All of the above

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