Managerial Accounting
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| QUESTION 1 | ||||||||
| Managerial accounting must conform to which of the following standards? | ||||||||
| Generally Accepted Accounting Principles (GAAP) | ||||||||
| International Financial Reporting Standards (IFRS) | ||||||||
| Internal Revenue Service tax code | ||||||||
| None of the above | ||||||||
| 2.5 points | ||||||||
| QUESTION 2 | ||||||||
| Which of the following mathematical expressions best describes a mixed cost? | ||||||||
| Y = bX | ||||||||
| Y = a | ||||||||
| Y = a + bX | ||||||||
| Y = ai | ||||||||
| 2.5 points | ||||||||
| QUESTION 3 | ||||||||
| The introduction of production technology to replace labor in a manufacturing process would likely result in which of the following? | ||||||||
| An increase in fixed cost | ||||||||
| An increase in general and administrative expenses. | ||||||||
| An increase in direct labor hours. | ||||||||
| A decrease in contribution margin. | ||||||||
| 2.5 points | ||||||||
| QUESTION 4 | ||||||||
| An increase in volume within the relevant range will cause: | ||||||||
| Unit fixed costs to increase. | ||||||||
| Unit variable costs to decrease. | ||||||||
| Total fixed costs to stay the same. | ||||||||
| Total variable costs to decrease. | ||||||||
| 2.5 points | ||||||||
| QUESTION 5 | ||||||||
| Which of the following is one of the three major components of product costs? | ||||||||
| Research and development expenses | ||||||||
| Manufacturing overhead | ||||||||
| Marketing costs related to specific products | ||||||||
| Selling, general and administrative expenses | ||||||||
| 2.5 points | ||||||||
| QUESTION 6 | ||||||||
| Which of the following would be classified as a fixed selling and administrative cost? | ||||||||
| Sales Commissions | ||||||||
| Depreciation on office equipment | ||||||||
| Depreciation on factory equipment | ||||||||
| Wages of production supervisor | ||||||||
| 2.5 points | ||||||||
| QUESTION 7 | ||||||||
| In the following equation for total cost, Y = a + bX, "a" represents which of the following? | ||||||||
| Total Cost | ||||||||
| Fixed Cost | ||||||||
| Variable Cost | ||||||||
| Volume | ||||||||
| 2.5 points | ||||||||
| QUESTION 8 | ||||||||
| Managerial accounting is primarily focused on: | ||||||||
| Providing information for internal and external users | ||||||||
| Providing general purpose financial statements | ||||||||
| Providing special-purpose information and reports | ||||||||
| Following generally accepted accounting principles | ||||||||
| 2.5 points | ||||||||
| QUESTION 9 | ||||||||
| Examples of activity cost drivers include all of the following except: | ||||||||
| Inspecting incoming raw materials | ||||||||
| Machine time spent working on a product | ||||||||
| Deciding how to arrange raw materials inventory within the warehouse | ||||||||
| Receiving (loading) raw materials into the warehouse | ||||||||
| 2.5 points | ||||||||
| QUESTION 10 | ||||||||
| The following information pertains to Marvolo, Inc.: | ||||||||
| Selling price per unit | ||||||||
| $100 | ||||||||
| Variable costs per unit | ||||||||
| $75 | ||||||||
| Total fixed costs | ||||||||
| $425,000 | ||||||||
| Tax rate | ||||||||
| 40% | ||||||||
| The sales volume required to obtain a target after-tax profit of $108,000 is: | ||||||||
| 6,000 units | ||||||||
| 8,572 units | ||||||||
| 24,200 units | ||||||||
| 20,000 units | ||||||||
| 2.5 points | ||||||||
| QUESTION 11 | ||||||||
| The scatter diagram method of cost estimation: | ||||||||
| Uses only the high and low data points | ||||||||
| Is superior to other methods in its ability to distinguish between discretionary and committed fixed costs | ||||||||
| Requires the use of judgment | ||||||||
| Provides a measure of the goodness of fit | ||||||||
| 2.5 points | ||||||||
| QUESTION 12 | ||||||||
| What is the purpose for using predetermined overhead rates? | ||||||||
| Delays in product costing can be avoided | ||||||||
| Variation in cost assignment due to seasonality can be prevented | ||||||||
| Variation in cost assignment due to short-term variations in volume can be prevented | ||||||||
| Use of predetermined overhead rates serves all the above purposes | ||||||||
| 2.5 points | ||||||||
| QUESTION 13 | ||||||||
| Which of the following aspects of manufacturing must be understood in order to implement activity based costing in a production setting? | ||||||||
| The production process | ||||||||
| The activities that occur in the production process must be known | ||||||||
| The cost drivers that generate activities within the production process | ||||||||
| All of the above | ||||||||
| 2.5 points | ||||||||
| QUESTION 14 | ||||||||
| Determine the unit break-even point, assuming fixed costs are $60,000 per period, variable costs are $16.00 per unit, and the sales price is $25.00 per unit. | ||||||||
| 5,000 | ||||||||
| 6,667 | ||||||||
| 15,000 | ||||||||
| 12,000 | ||||||||
| 2.5 points | ||||||||
| QUESTION 15 | ||||||||
| Total contribution margin is calculated by subtracting: | ||||||||
| Cost of goods sold from total revenues | ||||||||
| Fixed costs from total revenues | ||||||||
| Total manufacturing costs from total revenues | ||||||||
| Total variable costs from total revenues | ||||||||
| 2.5 points | ||||||||
| QUESTION 16 | ||||||||
| Wesley’s income statement is as follows: | ||||||||
| Sales (10,000 units) | ||||||||
| $150,000 | ||||||||
| Less variable costs | ||||||||
| -48,000 | ||||||||
| Contribution margin | ||||||||
| $102,000 | ||||||||
| Less fixed costs | ||||||||
| -24,000 | ||||||||
| Net income | ||||||||
| $78,000 | ||||||||
| If sales increase by 1,000 units, profits will: | ||||||||
| Increase by $12,000 | ||||||||
| Increase by $10,200 | ||||||||
| Increase by $4,800 | ||||||||
| Increase by $8,000 | ||||||||
| 2.5 points | ||||||||
| QUESTION 17 | ||||||||
| The introduction of production technology to replace labor in a manufacturing process would likely result in which of the following? | ||||||||
| A shift in costs from variable costs to fixed costs. | ||||||||
| A shift in costs from fixed costs to variable costs. | ||||||||
| An increase in total manufacturing costs. | ||||||||
| An increase in employment | ||||||||
| 2.5 points | ||||||||
| QUESTION 18 | ||||||||
| Financial accounting is primarily focused on: | ||||||||
| Providing the Internal Revenue Service with information to determine the amount of taxes owed | ||||||||
| Providing investors with useful information for valuing securities | ||||||||
| Providing information for internal users | ||||||||
| None of the above | ||||||||
| 2.5 points | ||||||||
| QUESTION 19 | ||||||||
| When finished goods are sold, there is an increase in which of the following accounts? | ||||||||
| Cost of Goods Sold | ||||||||
| Cost of Goods Manufactured | ||||||||
| Finished Goods Inventory | ||||||||
| Work-in-Process | ||||||||
| 2.5 points | ||||||||
| QUESTION 20 | ||||||||
| As volume increases, which of the following statements is not correct? | ||||||||
| Variable cost per unit will remain the same. | ||||||||
| Total fixed will remain the same. | ||||||||
| Average cost per unit will increase. | ||||||||
| Total variable costs will increase. | ||||||||
| 2.5 points | ||||||||
| QUESTION 21 | ||||||||
| Peoria Corporation reported the following on their contribution format income statement: | ||||||||
| Sales (12,000 units) | ||||||||
| $350,000 | ||||||||
| Less: variable expenses | ||||||||
| 200,000 | ||||||||
| Contribution margin | ||||||||
| $150,000 | ||||||||
| Less: fixed expenses | ||||||||
| 125,000 | ||||||||
| Net operating income | ||||||||
| $25,000 | ||||||||
| What is the contribution margin ratio? | ||||||||
| 38.57% | ||||||||
| 42.86% | ||||||||
| 57.14% | ||||||||
| 4.30% | ||||||||
| 2.5 points | ||||||||
| QUESTION 22 | ||||||||
| Chattanooga, Inc. has two categories of overhead: maintenance and inspection. Costs expected for these categories for the coming year are as follows: | ||||||||
| Maintenance | $800,000 | |||||||
| Inspection 400,000 | ||||||||
| The following data have been assembled for use in developing a bid for a proposed job: | ||||||||
| Direct materials | ||||||||
| $6,000 | ||||||||
| Direct labor | ||||||||
| $16,000 | ||||||||
| Machine-hours | ||||||||
| 400 | ||||||||
| Number of inspections | ||||||||
| 4 | ||||||||
| Direct labor-hours | ||||||||
| 800 | ||||||||
| The total estimate for machine-hours for all jobs during the year is 25,000, and for inspections is 800. These are the cost drivers for maintenance and inspection costs, respectively | ||||||||
| Using the appropriate cost drivers, the total cost of the potential job is: | ||||||||
| $22,000 | ||||||||
| $62,800 | ||||||||
| $33,600 | ||||||||
| $36,800 | ||||||||
| 2.5 points | ||||||||
| QUESTION 23 | ||||||||
| The following information pertains to Oliwander’s 2014 operations: | ||||||||
| Selling price per unit | ||||||||
| $50 | ||||||||
| Variable costs per unit | ||||||||
| $20 | ||||||||
| Total fixed costs | ||||||||
| $110,000 | ||||||||
| Oliwander’s break-even point in units is: | ||||||||
| 2,000 units | ||||||||
| 3,333 units | ||||||||
| 3,667 units | ||||||||
| 60,000 units | ||||||||
| 2.5 points | ||||||||
| QUESTION 24 | ||||||||
| The Chateau Company manufactures 4,000 telephones per year. The full manufacturing costs per telephone are as follows: | ||||||||
| Direct materials | ||||||||
| $4 | ||||||||
| Direct labor | ||||||||
| 16 | ||||||||
| Variable manufacturing overhead | ||||||||
| 12 | ||||||||
| Average fixed manufacturing overhead | ||||||||
| 12 | ||||||||
| Total | ||||||||
| $44 | ||||||||
| The Quick Assembly Company has offered to sell Chateau 4,000 telephones for $31 per unit. If Chateau accepts the offer, $20,000 of fixed overhead will be eliminated. | ||||||||
| Chateau should: | ||||||||
| Make the telephones; the savings is $4,000 | ||||||||
| Buy the telephones; the savings is $35,000 | ||||||||
| Buy the telephones; the savings is $24,000 | ||||||||
| Make the telephones; the savings is $24,000 | ||||||||
| 2.5 points | ||||||||
| QUESTION 25 | ||||||||
| Direct labor used in manufacturing digital cameras would best be classified as what type of cost? | ||||||||
| Variable cost | ||||||||
| Fixed cost | ||||||||
| Mixed cost | ||||||||
| Step cost | ||||||||
| 2.5 points | ||||||||
| QUESTION 26 | ||||||||
| If a trucking company were operating at capacity, but had an opportunity to fill a one-time high volume special order, which of the following ramifications could occur? | ||||||||
| Lost revenues from regular customers | ||||||||
| Long-term revenue loss from customers who change service to competitors | ||||||||
| Questions from regular customers about commitment to service | ||||||||
| eAll of the above | ||||||||
| 2.5 points | ||||||||
| QUESTION 27 | ||||||||
| From a managerial accounting standpoint, which of the following areas of the Sarbanes-Oxley Act of 2002 (SOX) are most pertinent? | ||||||||
| External auditing standards | ||||||||
| Review of internal controls | ||||||||
| Codes of ethics for financial officers | ||||||||
| Penalties for fraud | ||||||||
| 2.5 points | ||||||||
| QUESTION 28 | ||||||||
| Future costs that differ among competing alternatives are: | ||||||||
| Absorption costs | ||||||||
| Relevant costs | ||||||||
| Replacement costs | ||||||||
| Variable overhead costs | ||||||||
| 2.5 points | ||||||||
| QUESTION 29 | ||||||||
| According to Michael Porter, which of the following is an example of cost leadership as a business strategy? | ||||||||
| A regional beer brewer that caters to local tastes. | ||||||||
| A glass manufacturer utilizing research and development to identify new applications for glass and ceramics. | ||||||||
| An online bookseller utilizing efficient scale facilities and overhead cost control p.9. | ||||||||
| A manufacturer focused on designing and building corporate jet aircraft. | ||||||||
| 2.5 points | ||||||||
| QUESTION 30 | ||||||||
| Activity-based costing’s primary benefit is that it provides: | ||||||||
| Absolutely accurate product costing information | ||||||||
| Data for external financial reporting purposes | ||||||||
| More precise cost data for internal decision-making purposes | ||||||||
| All of the above | ||||||||
| 2.5 points | ||||||||
| QUESTION 31 | ||||||||
| The most appropriate cost driver for the activity of cleaning (bussing) tables in a restaurant is: | ||||||||
| The number of cooks in the kitchen | ||||||||
| The number of tables cleaned | ||||||||
| The number of employees assigned to the job of cleaning tables | ||||||||
| The amount of money deposited to the bank each day | ||||||||
| 2.5 points | ||||||||
| QUESTION 32 | ||||||||
| Cari German uses gas to heat her home. She has accumulated the following information regarding her monthly gas bill and monthly heating degree-days. The heating degree-days value for a month is found by first subtracting the average temperature for each day from 65 degrees and then summing these daily amounts together for the month. | ||||||||
| Month | ||||||||
| Heating Degree-Days | ||||||||
| Gas Bill | ||||||||
| February | ||||||||
| 1,900 | ||||||||
| $254 | ||||||||
| April | ||||||||
| 600 | ||||||||
| $101 | ||||||||
| What will be the increase in Cari's monthly gas bill per heating degree-day using the high-low method? | ||||||||
| $0.33 | ||||||||
| $0.12 | ||||||||
| $46.00 | ||||||||
| $153.00 | ||||||||
| 2.5 points | ||||||||
| QUESTION 33 | ||||||||
| All of the following are assumptions used in cost-volume-profit analysis, except: | ||||||||
| All costs are classified as fixed or variable | ||||||||
| The total cost function is linear | ||||||||
| The total revenue function is linear | ||||||||
| All of the above are assumptions used in cost-volume-profit analysis | ||||||||
| 2.5 points | ||||||||
| QUESTION 34 | ||||||||
| Gross margin is calculated by subtracting: | ||||||||
| Total variable costs from total revenues | ||||||||
| Total manufacturing overhead costs from total revenues | ||||||||
| Fixed costs from total revenues | ||||||||
| Cost of goods sold from total revenues | ||||||||
| 2.5 points | ||||||||
| QUESTION 35 | ||||||||
| The total contribution margin at the break-even point: | ||||||||
| Equals total fixed costs | ||||||||
| Is zero | ||||||||
| Is greater than total variable costs | ||||||||
| Plus total fixed costs equal total revenues | ||||||||
| 2.5 points | ||||||||
| QUESTION 36 | ||||||||
| Partially completed goods that are in the process of being converted into a finish product are defined as: | ||||||||
| Work-in-process inventories | ||||||||
| Conversion inventories | ||||||||
| Raw materials inventories | ||||||||
| Operational inventories | ||||||||
| 2.5 points | ||||||||
| QUESTION 37 | ||||||||
| Which of the following is not included in work-in-process inventory? | ||||||||
| Direct materials costs | ||||||||
| Applied manufacturing overhead | ||||||||
| Direct manufacturing labor costs | ||||||||
| Sales commissions | ||||||||
| 2.5 points | ||||||||
| QUESTION 38 | ||||||||
| Which of the following procedures best describes activity-based costing? | ||||||||
| All overhead costs are recorded as expenses as incurred. | ||||||||
| Overhead costs are assigned directly to products. | ||||||||
| Overhead costs are assigned to activities; then costs are assigned to products. | ||||||||
| Overhead costs are assigned to departments; then costs are assigned to products. | ||||||||
| 2.5 points | ||||||||
| QUESTION 39 | ||||||||
| The contribution margin ratio is: | ||||||||
| The difference between price and variable cost per unit | ||||||||
| The percentage difference between sales and cost of goods sold | ||||||||
| The portion (or percent) of revenues available for covering fixed costs and providing a profit | ||||||||
| The percentage difference between total revenues and total costs | ||||||||
| 2.5 points | ||||||||
| QUESTION 40 | ||||||||
| Although adding more activity cost pools to an activity-based costing system may improve the precision of product costing, this increase in precision must be judged against: | ||||||||
| The cost of the product | ||||||||
| The price of the product | ||||||||
| The cost of developing and maintaining the additional cost pools | ||||||||
| All of the above | ||||||||
10 years ago
100% correct answers, I just scored a perfect 100 :)
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