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1.
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Managerial accounting is concerned with all but: N/A
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  External users of financial information
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Internal users of financial information
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Future orientation
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Focuses on parts as well as the whole business
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2.
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This is not a function of management: N/A
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Planning
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Controlling
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Recording
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Decision making
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3.
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The Cost Accounting Standards Board (CASB) was established by N/A
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The financial accounting standards board (FASB).
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The general accounting office (GAO).
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The U.S. congress.
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The Securities and Exchange Commission (SEC).
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4.
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The treasury function is usually not concerned with N/A
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Cash management .
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Pension management.
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Financial statements Preparation.
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Obtaining financing.
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5.
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The professional certification program most suited for one interested in a career in internal auditing leads to which of the following designations? N/A
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6.
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The Certified Management Accountants (CMA) does not require examination of: N/A
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Economics, finance and management
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Business law
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Managerial reporting, analysis ,behavioral issues
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Decision analysis and information systems
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7.
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Manufacturing costs can be classified into all but: N/A
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Direct material costs
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Direct labor costs
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Factory overhead
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Operating costs
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8.
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All costs related to the selling function in a company are N/A
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Prime costs.
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Direct costs.
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Advertising.
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Conversion costs.
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9.
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Period costs N/A
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Are always expensed in the same period in which they are incurred.
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Vary from one period to the next.
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Remain unchanged over a given period of time.
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Are associated with the periodic inventory method.
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10.
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In a traditional manufacturing operation, direct costs normally include N/A
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Machine repairs in an automobile factory.
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Electricity in an electronics plant.
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Wood in a furniture factory.
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Commissions paid to sales personnel.
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11.
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For product costing purposes, the cost of production overtime caused by equipment failure that represents idle time plus the overtime premium should be classified as a(n) N/A
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Indirect cost.
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Direct cost.
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Controllable cost.
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Discretionary cost.
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12.
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The wages of the factory janitorial staff should be classified as N/A
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Factory overhead cost.
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Direct labor cost.
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Period cost.
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Prime cost.
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13.
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The difference between variable costs and fixed costs is N/A
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Unit variable costs fluctuate, and unit fixed costs remain constant.
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Unit variable costs are fixed over the relevant range, and unit fixed costs are variable.
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Total variable costs are variable over the relevant range and fixed in the long term, while fixed costs never change.
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Unit variable costs change in varying increments, while unit fixed costs change in equal increments.
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14.
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The contribution approach to income determination may not be useful for: N/A
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Break-even and cost-volume-profit analysis
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Evaluating performance of a division and management
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Assigning common fixed costs
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Short-term and non-routine decisions
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15.
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The contribution income statement classifies costs by N/A
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Managerial function
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Behavior
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Timing of charges against sales revenue
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Traceability
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16.
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A basic approach to cost accumulation is: N/A
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Job order costing
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Segmented costing
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Accrued costing
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Absorption costing
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17.
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Process costing includes all except: N/A
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By department
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Cost of production
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By jobs
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Processing industries
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18.
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Job cost records do not include: N/A
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Job cost sheet
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Production report
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Materials requisition form
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Work ticket
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19.
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Which one of the following is least likely to be an objective of a cost accounting system? N/A
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Product costing and inventory valuation.
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Departmental efficiency.
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Sales commission determination.
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Income determination.
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20.
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This is appropriate when the products are manufactured in identifiable lots or batches or when the products are manufactured to customer specifications. N/A
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Direct costing.
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Absorption costing.
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Process costing.
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Job-order costing
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21.
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Under this, accounting data are accumulated by the production department (or cost center) and averaged over all of the production that occurred in the department. N/A
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Job-order costing.
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Process costing.
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Variable costing.
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Absorption costing.
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22.
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There are several alternative cost drivers (denominator measures) for applying overhead. Which is not commonly used? N/A
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Production volume.
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Sales volume.
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Direct labor costs.
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Direct material dollars
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23.
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Unit costs may not be useful for: N/A
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Inventory evaluation
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Income determination
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Decision making
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Pricing
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24.
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Factory overhead costs include all except: N/A
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Setup
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Inventory
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Quality control
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Power
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25.
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Cost drivers for non-manufacturing costs include all except: N/A
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Number of beds in a hospital
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Machine hours
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Flight hours
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Number of rooms occupied in a hotel
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26.
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This is not included in the value chain of business functions: N/A
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Research and development
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Cost reporting
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Design
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Marketing
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27.
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Cost-volume-profit (CVP) analysis allows management to determine the relative profitability of a product by N/A
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Highlighting potential bottlenecks in the production process.
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Keeping fixed costs to an absolute minimum.
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Determining the contribution margin per unit and the projected profits at various levels of production.
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Assigning costs to a product in a manner that maximizes the contribution margin
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28.
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The difference between sales and total variable costs is N/A
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Gross operating profit.
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Net profit.
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The breakeven point.
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The contribution margin
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29.
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The dollar amount of revenues needed to attain a desired income is calculated by dividing the contribution margin ratio into N/A
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Fixed cost.
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Desired income.
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Desired income plus fixed costs.
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Desired income less fixed costs.
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30.
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When used in cost-volume-profit analysis, sensitivity (what-if) analysis N/A
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Determines the most profitable mix of products to be sold.
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Allows the decision maker to introduce probabilities in the evaluation of decision alternatives.
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Is done through various possible scenarios and computes the impact on profit of various predictions of future events.
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Is limited because in cost-volume-profit analysis, costs are not separated into fixed and variable components.
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31.
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Information about two products is as follows: Product A: Selling price per unit is $20; Variable costs per unit are $11; Contribution margin per unit is $ 9. Product B: Selling price per unit is $25; Variable costs per unit are $18; Contribution margin per unit is $7. Sixty percent of sales in units are expected to be product A (a sales mix of 6:4 or 3:2). Fixed costs are expected to be $82,000. Breakeven in units would be: N/A
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3,000 units 2,000 units
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6,000 units 4,000 units
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18,000 units 14,000 units
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2,460 units 1,312 units
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32.
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The most likely strategy to reduce the breakeven point would be to N/A
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ncrease both the fixed costs and the contribution margin.
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Decrease both the fixed costs and the contribution margin
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Decrease the fixed costs and increase the contribution margin.
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Increase the fixed costs and decrease the contribution margin.
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33.
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Depreciation based on the straight-line method is classified as what type of cost? N/A
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Out-of-Pocket.
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Marginal.
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Variable.
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Fixed.
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34.
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Which one of the following categories of cost is most likely not considered a component of fixed factory overhead? N/A
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Rent.
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Property taxes.
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Supervisory salaries.
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Power.
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35.
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Basic break-even and CVP models are subject to limiting assumptions such as: N/A
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The selling price per unit is nonlinear
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All costs are classified as variable and fixed costs
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There is uncertain sales mix
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Inventories change significantly from period to period.
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36.
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An undertaking of cost behavior is helpful for all except: N/A
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Break-even and cost-volume profit analysis
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To make long term commitments
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Appraisal divisional performance
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Flexible budgeting
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37.
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Variable cost categories do not include: N/A
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Direct materials
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Insurance
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Direct labor
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Sales commissions
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38.
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One popular method for estimating the cost-volume formula is: N/A
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Progressive analysis
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Differential analysis
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Regression analysis
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Total analysis
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39.
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Major steps in preparing the budget do not include: N/A
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Project production volume
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Prepare a sales forecast
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Estimate manufacturing costs and operating expenses
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Determine cash flow and other financial effects
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40.
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Computer-based models are used for: N/A
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Financial planning and budgeting
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Management development
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Relocation development
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Compliance diversity
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41.
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Responsibility centers can be all except: N/A
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Cost center
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Distribution center
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Profit center
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Investment center
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42.
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Performance reports based on analysis of variances do not need to address: N/A
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If it is favorable or unfavorable
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If the budget is tight
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If it is significant
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If it is controllable
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43.
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a standard cost system, the materials price variance is obtained by multiplying the N/A
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Actual price by the difference between actual quantity purchased and standard quantity used.
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Actual quantity purchased by the difference between actual price and standard price.
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Standard price by the difference between standard quantity purchased and standard quantity used.
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Standard quantity purchased by the difference between actual price and standard price.
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44.
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An unfavorable price variance occurs because of N/A
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Price increases for raw materials.
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Price decreases for raw materials.
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Less-than-anticipated levels of waste in the manufacturing process.
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More-than-anticipated levels of waste in the manufacturing process.
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45.
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Under a standard cost system, the materials price variances are usually the responsibility of the N/A
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Production manager.
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Cost accounting manager.
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Sales manager.
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Purchasing manager.
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46.
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How is labor rate variance computed? N/A
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The difference between standard and actual rates, times standard hours.
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The difference between standard and actual hours, times actual rate.
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The difference between standard and actual rates, times actual hours.
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The difference between standard and actual hours, times the difference between standard and actual rates.
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47.
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If a manufacturing company uses responsibility accounting, which one of the following items is least likely to appear in performance report for a manager of an assembly line? N/A
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Supervisory salaries.
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Materials.
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Repairs and maintenance.
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Depreciation on equipment.
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48.
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Variance analysis for factory overhead does not consist of: N/A
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Two-way analysis
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Three-way analysis
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One-way analysis
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Four-way analysis
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49.
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Non-financial performance task measures do not include: N/A
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Diversification
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Rate of product recall
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Delivery success rate
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Number of customer complaints
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50.
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The primary difference between centralization and decentralization is N/A
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Separate offices for all managers.
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Geographical separation of divisional headquarters and central headquarters.
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The extent of freedom of decision making by many levels of management.
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The relative size of the firm.
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51.
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Return on Investment (ROI) can be enhanced by the following actions: N/A
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Increase sales
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Increase assets
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Improve margin, turnover, or margin and turnover together
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Decrease the cost of capital
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52.
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In some cases, ROI is preferred to RI because. N/A
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ROI represents the results for one period, while residual income is a measure over time
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The imputed interest rate used in calculating residual income is harder to derive than the target rate that is compared to the calculated ROI.
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ROI concentrates on maximizing a percentage return rather than absolute dollars of income with R
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Year-end investment is employed with ROI while average investment is employed with residual income
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53.
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Improving Economic Value Added (EVA) can be achieved by: N/A
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Invest capital in high-performing projects
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Use more capital
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Increase the cost of capital
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Enhance ROI
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54.
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The corporate balanced scorecard N/A
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Is an activity-based responsibility accounting model that measures operating activities
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Is a financial-based responsibility accounting model that focuses on the financial performance of units, rewarding performance with static financial-oriented standards
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Is a strategic-based financial reporting system that balances assets with liabilities and owner's equity
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Is a strategic-based performance management system that identifies objectives and measures from a financial perspective, customer perspective, process perspective, and learning and growth perspective
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55.
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Which of the following would be a nonfinancial measure? N/A
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Customer profitability
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Number of new patents
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Return on investment
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Cost per unit
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56.
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Considerations needed to determine which type of transfer policy to use includes all except: N/A
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Goal congruence
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Limited economy
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Performance evaluation
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Autonomy
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57.
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A binding constraint can: N/A
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Limit a company's profitability
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Limit advertising
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Limit accounting functions
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Limit benefits
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58.
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Common mistakes you make in decision making are to include: N/A
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Unitized fixed costs
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Expected future costs
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Total costs
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Relevant cost
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59.
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Future value is best described as N/A
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The sum of dollars-in discounted to time zero.
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The sum of dollars-out discounted to time zero.
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The value of a dollar-in or a dollar-out at a future time adjusted for any compounding effect.
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None of the answers are correct.
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60.
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An annuity is a series of payments of a fixed amount for: N/A
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A specified number of periods
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For one-time period
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For an indeterminable period
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For an unspecified number of periods
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61.
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The present worth of future sums of money is N/A
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Future value
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Present value
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Past value
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Limited value
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62.
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The discount rate (or cost of capital) ordinarily used in present value calculations is the N/A
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Federal Reserve rate.
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Treasury bill rate.
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Minimum rate of return set by the firm.
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Prime rate.
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63.
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A method of evaluating investment projects does not include: N/A
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Payback period
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External index
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Internal rate of return (IRR)
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Net present value (NPV)
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64.
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A characteristic of the payback method (before taxes) is that it N/A
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Neglects total project profitability.
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Uses accrual accounting inflows in the numerator of the calculation.
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Uses the estimated expected life of the asset in the denominator of the calculator.
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Uses the hurdle rate in the calculation.
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65.
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Jones Company is considering the purchase of a new machine for $57,000. The machine would generate an annual cash flow of $17,411 for five years. At the end of five years, the machine would have no salvage value. The company's cost of capital is 12 percent. The company uses straight-line depreciation with no mid-year convention.What is the internal rate of return for the machine rounded to the nearest percent, assuming no taxes are paid? N/A
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66.
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The technique that recognizes the time value of money by discounting the after-tax cash flows for a project over its life to time period zero using the company’s minimum rate of return is the N/A
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Net present value method.
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Capital rationing method.
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Payback method.
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Accounting rate of return method.
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67.
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Oakland Shop is considering the purchase of a used printing press costing $9,600. The printing press would generate an annual cash flow of $4,000 per year for three years. At the end of three years, the press would have no salvage value. The company's cost of capital is 10 percent. The company uses straight-line depreciation with no mid-year convention. What is the net present value for the press? N/A
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68.
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The technique that reflects the time value of money and is calculated by dividing the present value of the future net after-tax cash inflows that have been discounted at the desired cost of capital by the initial cash outlay for the investment is the N/A
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Net present value method
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Capital rationing method.
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Accounting rate of return method.
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Profitability index method.
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69.
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If the tax rate is 40 percent and a company has $800,000 of income, a depreciation deduction of $160,000 would result in a tax savings of N/A
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70.
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A project’s cash flow will fall into: N/A
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Initial investment
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Differential flows over the project's life
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Terminal cash flow
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Any one of the above
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