In a company that uses the direct method to prepare the statement of cash flows, the
amount of cash it pays in interest expense is computed as
A) the change in interest payable plus interest expense.
B) the change in interest payable minus interest expense.
C) the ending interest payable balance plus interest expense.
D) the ending interest payable balance minus interest expense.
The managerial accountant at Flat Screen Manufacturing reported that the organization
contains an automated production line to manufacture and produce its products for
consumers to enjoy in the marketplace. The managerial accountant reported that the
company uses the high-low method to estimate the costs in the new budget. The
managerial accountant reported the following information:
a.Compute the slope of the mixed cost, or the variable cost per unit of activity.
b.Compute the vertical intercept, or the fixed cost component of the mixed cost.
c.What is the mixed cost equation?
The Nichols Corporation data for the current year:
What would a horizontal analysis report with respect to selling/general expenses?
A) There was a 5.62% decrease from prior to current year.
B) There was a 5.95% increase from prior to current year.
C) The current ratio is 1.06.
D) Selling/general expenses are 8.08% of net sales revenue.
Which of the following organizations has developed the G4 Guidelines?
A) Global Reporting Initiative (GRI)
B) International Accounting Standards Board (IASB)
C) Carbon Disclosure Project (CDP)
D) International Organization for Standardization (ISO)
If a company uses the indirect method to prepare the statement of cash flows, which of
the following items would be added to net income to determine the net cash flow from
operating activities?
A) An increase in inventory added to net income to determine the net cash flow from
operating activities in the statement of cash flows.
B) A decrease in accounts receivable would be added to net income to determine the net
cash flow from operating activities in the statement of cash flows.
C) A decrease in accounts payable would be added to net income to determine the net
cash flow from operating activities in the statement of cash flows.
D) An increase in preferred dividends payable would be added to net income to
determine the net cash flow from operating activities in the statement of cash flows.
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.
To follow is selected information about The Boston Company for the current year and
prior year.
What is the current year’s selling and general expenses percentage (as would be found
on a vertical analysis of the income statement for the current year)?
A) 25.05%
B) 14.43%
C) 159.40%
D) 23.00%
All of the following are potential advantages of decentralization except
A) Frees top management’s time
B) Encourages use of expert knowledge
C) Potential duplication of costs
D) Provides training
The managerial accountant at the Export Shoppe attended a meeting with the facilities
manager to discuss the internal and external costs during the quarter. The facilities
manager provided the managerial accountant with the following cost worksheet that
highlights the internal and external costs during the period:
The managerial accountant reported that the total environmental costs are 20% of all
costs during the year. Calculate the total environmental costs at the Export Shoppe.
A) $4,000
B) $5,000
C) $6,000
D) $7,100
Crossroads Packaging Co. has budgeted the following amounts for its next fiscal year:
To maintain the original breakeven sales in units if fixed expenses were to increase by
10%, the selling price per unit would have to be
A) increased by 2.00%.
B) increased by 58.00%.
C) decreased by 2.00%.
D) decreased by 58.00%.
The following information relates to Woolf Unlimited for the past two years.
What is the rate of return on total assets for the current year?
A) 0.10
B) 0.13
C) 0.14
D) 0.78
The manager of the accounting department that may be evaluated on his or her ability to
control expenses at Adidas may be in charge of a(n)
A) investment center.
B) cost center.
C) profit center.
D) revenue center.
The McCumber Corporation data for the current year:
With respect to selling/general expenses, what would a horizontal analysis report?
A) The current ratio is 0.92.
B) There was a 4.47% increase from prior to current year.
C) There was a 4.28% decrease from prior to current year.
D) Selling/general expenses are 7.74% of net sales revenue.
Bridgette is a managerial accountant at the Middle Peninsula Manufacturing Company.
Recently, Bridgette received a Certified Management Accountant (CMA) certification.
To receive the certification, Bridgette was required to attend classes and she had to pass
a rigorous examination and maintain continuing professional education now and as
designated in the future. To prepare for the exam, Bridgette focused on managerial
accounting topics, economic topics, and business finance topics. The exam permits
Bridgette to earn a competitive salary and to obtain a promotion to a higher-level
position within the company. Which of the following is the name of the regulatory body
that issues the Certified Management Accountant (CMA) certification?
A) Sarbanes-Oxley Act of 2002
B) U. S. Securities and Exchange Commission
C) Institute of Management Accountants (IMA)
D) The Federal Reserve Board
E) International Financial Reporting Standards (IFRS)
Using the direct method to prepare the statement of cash flows, cash payments for
merchandise inventory is categorized on the statement of cash flows as
A) a cash payment in the operating activities section on the statement of cash flows.
B) a cash receipt in the operating activities section on the statement of cash flows.
C) a cash payment in the investing activities section on the statement of cash flows.
D) a cash receipt in the investing activities section on the statement of cash flows.
The management accountant at Technology Innovators determined $500,000 is the
organization’s earning goal to accommodate the organizational plan during the first
quarter during a new year. The accountant realizes that to achieve the new earning goal,
the operations manager needs to increase the price of technology parts charged to a
consumer to $250.00 per unit. The manager is scheduling a new staff meeting to
determine if they need to increase the marketing efforts at the firm, or if they need to
design a new part that uses materials that are less expensive to produce.
Which of the following management responsibilities is the managerial accountant using
in this example?
A) Directing
B) Planning
C) Controlling
D) Implementing
E) Designing
The following information relates to Truman Unlimited for the past two years.
The book value per share of common stock for the current year is
A) $52.77.
B) $79.50.
C) $13.50.
D) $96.00.
The individuals at the International Fireplace Shoppe perform the following duties:
Identify individual E and individual F at International Fireplace Shoppe.
A) CEO; CFO
B) Treasurer; Controller
C) Management Accountant; Financial Accountant
D) Secretary; Receptionist
E) Internal Audit Function; Audit Committee
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%
Prince Paper has budgeted the following amounts for its next fiscal year:
If Price Paper spends an additional $12,500 on advertising, sales volume should
increase by 2,300 units. What effect will this have on operating income?
A) Increase of $102,500
B) Increase of $115,000
C) Decrease of $115,000
D) Decrease of $102,500
The managerial accountant at Megaton Company reported no preferred dividends paid
in 2013 and 2014; and, there were 20,000 shares of outstanding stock at the end of 2013
and 2014. The managerial accountant reported that net income in 2014 was $95,000 and
the value of common stock at the end of the year was $28.85 per share. The managerial
accountant reported that net income in 2013 was $65,000 and the value of common
stock at the end of the year was $12.95 per share.
Compute the earnings per share (EPS) at Megaton Company in 2013 and in 2014. Did
the EPS increase or decrease in 2014? Should a managerial accountant strive to achieve
an increase in EPS or a decrease in EPS? What can a decrease in EPS indicate?
The managerial accountant at Company A, a small retailer, reviews information about
Company B, a large national firm. Review the following information listed below about
Company A and Company B:
Why does the managerial accountant at Company A review the income statement at
Company B? What is the name of this statement? Which company is most profitable?
Why?
The new manager at Sailboat Manufacturing oversees the manufacturing operations to
ensure the effective manufacturing process of sails to accommodate the special-orders
of sails they receive for sailboats. The manager compiled a report that contained the
following data:
Compute the activity cost allocation rate for each of Sailboat Manufacturing’s
production activities listed in the report. What should the new manager understand
about the cost allocation rates at Sailboat Manufacturing? How will the new manager
use the activity cost allocation rates during the coming year at Sailboat Manufacturing?
Marble Countertops and Cabinet Manufacturing produces marble inserts to
accommodate the marble countertops. The Marble Division can use the MAR1 insert
that is manufactured in the company’s Cabinet Division because there is excess
capacity. The standard market price to produce the MAR1 insert is $1,400. The
managerial accountant reported the following manufacturing cost and variable expense
information:
What is the highest price that Marble Countertops and Cabinet Manufacturing should
pay in the outside market? What is the lowest acceptable transfer price to the Cabinet
Division? What would happen if the managerial accountant produced the part below the
acceptable transfer price?
The managerial accountant at Sunny Manufacturing needs to determine how many costs
are fixed costs and how many costs are variable costs in the organization. The
managerial accountant reported the following information:
Use the high-low method to determine the cost equation and use machine hours as the
base for a cost driver in the analysis.
Use the direct method of cash flows to answer the question.
Compute the change in accounts payable during the year.
(Annuity FV Table Required) Jennifer recently earned a degree in accounting and her
first employment opportunity is an accountant at a major corporation. The 401K portion
of her employment package has a personal investment cap at 20% of her salary and the
employer contribution portion is 50% of her contribution. Her annual salary is $56,500
and she chose to invest 14% annually. Calculate the value of her 401K after 10 years at
4%, and then calculate the value of her 401K had she invested the maximum amount
that her employer would match.
The managerial accountant at the Organic Food Shoppe used the indirect method to
prepare the Statement of Cash Flows and reported the following data:
The managerial accountant is required to determine the amount of free cash flow at the
company. Calculate the free cash flow at the company and list at least three ways the
company can use the free cash flow at the business.
Standard Products Company recognizes variances from standards at the earliest
opportunity, and the quantity of direct materials purchased is equal to the quantity used.
The following information is available for the most recent month. Assume the
allocation base for fixed overhead costs is the number of units.
Journalize the purchase and usage of direct materials including the related variances.