1) A company uses the direct method to prepare the statement of cash flows. It presents
the following data on its financial statements:
*Relates solely to the acquisition of inventory
What will appear in the operating activities section related to inventory?
A) The decrease of $18,000 will be subtracted from net income.
B) The decrease of $18,000 will be added to net income.
C) The decrease of $18,000 will be subtracted from cost of goods sold to determine
payments to suppliers.
D) The decrease of $18,000 will be added to cost of goods sold to determine payments
to suppliers.
2) Kepple Manufacturing currently uses a traditional costing system. The company
allocates overhead to its two products, Zips and Dees, using a predetermined
manufacturing overhead rate based on direct labor hours. Here is data related to the
company’s two products:
The amount of manufacturing overhead that would be allocated to one unit of Zips
using the traditional costing system would be closest to
A) $35.35.
B) $23.57.
C) $47.14.
D) $32.86.
3) The managerial accountant at Organic Beverage Factory used spreadsheet software
to run a regression analysis scenario and compile the following monthly cost data:
Which of the following is the correct cost equation showing the correlation of monthly
costs, based on the results of the regression analysis compiled by the managerial
accountant?
A) y = $4,286,652 + $28.21
B) y = 0.6521x + $4,286,652
C) y = $0.6521 + $28.21x
D) y = $28.21x + $4,286,652
4) The managerial accountant at the Umbrella Manufacturing Plant allocates
manufacturing overhead from each activity to the individual jobs that use the activities
for Product A.
Product A:
Two Products
Compute the total MOH allotted to Product A. Next, use the same Activity Cost
Allocation Rates to compute the Activity Cost Allocation Rates and the MOH allocated
to produce two products. What is the total MOH allocated to manufacture two
products?
5) As managers use less and different types of direct materials, which of the following
standards do managers focus on to enhance sustainability in the workplace?
A) Quantity/Efficiency standard
B) Price standard
C) Flexible standard
D) Both A and B
6) The balance sheet for Blineberry Corporation follows:
Operating income during the period was $18,000, while cash dividends paid were
$17,400. The total sources of cash at Blineberry Corporation during the year was
A) $40,950.
B) $8,200.
C) $48,050.
D) $12,050.
7) XYZ uses job costing. Actual manufacturing overhead for the period is $20,000
while allocated manufacturing overhead is $18,000. What entry will close the
manufacturing overhead balance?
A) Debit the Manufacturing Overhead account and credit the Work-in-Process account
for $2,000.
B) Debit the Manufacturing Overhead account and credit the Cost of Goods Sold
account for $2,000.
C) Debit the Cost of Goods Sold account and credit the Finished Goods Inventory
account for $2,000.
D) Debit the Cost of Goods Sold account and credit the Manufacturing Overhead
account for $2,000.
8) The following data pertain to costs at Summit Company:
The variable cost per unit is
A) $3.75.
B) $15.00.
C) $18.75.
D) $11.25.
9) A company reported the following amounts of net income:
Which of the following is the percentage change from Year 2 to Year 3?
A) 24.00%
B) 55.00%
C) 124.00%
D) 25.00%
10) The Nichols Corporation data for the current year:
What would a horizontal analysis report with respect to long-term liabilities?
A) Long-term liabilities increased by $6,000.
B) Long-term liabilities decreased by 5.92%.
C) Long-term liabilities increased by 6.21%.
D) Long-term liabilities decreased by $1,500.
11) Karlene is the new managerial accountant at the Bay Beach House Restaurant.
Karlene complies with principles and standards that help accountants deal with ethical
challenges that she can encounter in the workplace. The principles and standards ensure
that management accountants exhibit the highest level of ethical behavior. The four
ethical standards include competence, confidentiality, integrity, and credibility. Which
of the following requires management accountants comply with the four ethical
standards?
A) IMA’s Statement on Ethical Professional Practice
B) Certified Management Accountant (CMA)
C) Sarbanes-Oxley Act of 2002
D) Certified Public Accountant (CPA)
E) The Federal Reserve Board
12) Which of the following positions is responsible for the oversight, strategy
formulation, and guidance at a large corporation?
A) CEO
B) Company president
C) Stockholders
D) Board of Directors
13) If a company uses the indirect method to prepare the statement of cash flows, which
of the following items would be subtracted from net income to determine the net cash
flow from operating activities?
A) A loss on the sale of equipment would be subtracted from net income to determine
the net cash flow from operating activities in the statement of cash flows.
B) An increase in dividends payable would be subtracted from net income to determine
the net cash flow from operating activities in the statement of cash flows.
C) Amortization of a premium on bonds payable would be subtracted from net income
to determine the net cash flow from operating activities in the statement of cash flows.
D) Depreciation expense would be subtracted from net income to determine the net
cash flow from operating activities in the statement of cash flows.
14) Which of the following value chain elements is associated with the costs of
shipping inventory to the retail outlet in a merchandising company?
A) Design
B) Distribution
C) Production and Purchases
D) Customer Service
15) Porches, Inc. sells lawn furniture to consumers in the marketplace. The managerial
accountant reported the following financial information that reflects the 20XX data:
Compute the operating income.
A) $712,000
B) $127,000
C) $170,000
D) $90,000
16) The following information relates to Truman Unlimited for the past two years.
The inventory turnover for the current year is
A) 1.76 times.
B) 0.85 times.
C) 13.50 times.
D) 2.00 times.
17) Della’s e-Portfolio Design Service has $4,900 fixed expenses. The company’s
operating income is $0 and the contribution margin ratio is 60%.
What are the company’s sales in dollars using the shortcut approach to the contribution
margin ratio?
A) $8,167
B) $8,192
C) $8,198
D) $8,199