Which of the following is not a characteristic of a managerial accountant?
a.Just a number cruncher
b.Analyze and interpret financial data
c.Analyze and interpret operating data
d.Active participant in the decision making process
Which of the following is not a consequence of budgetary slack?
a. Resources may not be allocated in the optimal way
b. Those who implement the budget may engage in undesirable behavior because they
did have input into setting the budget.
c. Managers may receive bonuses they would not have earned if the budget had been
prepared realistically
d. All of these answer choices are consequences of budgetary slack.
A favorable variance is a variance that
a. Increases cash relative to the budgeted amount.
b. Decreases cash relative to the budgeted amount.
c. Increases operating income relative to the budgeted amount.
d. Decreases operating income relative to the budgeted amount.
Christy’s Cup Cakes applies overhead based on direct labor hours. In June, Christy
applied overhead of $98,620 and incurred overhead of $97,730. For the year, Christy
expected total manufacturing overhead of $1,200,000. To dispose of the difference
between applied and incurred overhead, Christy should
a. Increase Cost of Goods Sold by $890
b. Decrease Cost of Goods Sold by $890
c. Increase Cost of Goods Sold by $2,270
d. Decrease Cost of Goods Sold by $1,830
Which of the following is not a duty of a management accountant under the IMA
Statement of Ethical Professional Practice ‘s competence standard?
a.Maintain an appropriate level of professional expertise by continually developing
knowledge and skills.
b.Provide decision support information and recommendations that are accurate, clear,
concise and timely.
c.Mitigate actual conflicts of interest. Regularly communicate with business associates
to avoid apparent conflicts of interest. Advise all parties of any potential conflicts.
d.Perform professional duties in accordance with relevant laws, regulations, and
technical standards.
Which of the following costs would be relevant in deciding whether to accept a special
order?
a. Direct material
b. Variable overhead
c. Both direct material and variable overhead
d. Neither direct material nor variable overhead
An unfavorable variance is a variance that
a. Increases cash relative to the budgeted amount.
b. Decreases cash relative to the budgeted amount.
c. Increases operating income relative to the budgeted amount.
d. Decreases operating income relative to the budgeted amount.
Which of the following is not a criticism of ideal standards?
a. After a period of performing below standard, employees will likely lose motivation.
b. Morale will suffer because employees cannot attain the standard.
c. In an effort to meet an ideal efficiency standard, employees may take shortcuts.
d. All of these answer choices are criticisms of ideal standards.
Companies that mass-produce similar products or employ a continuous production
process typically use which of the following costing systems?
a. Process
b. Job order
c. Either process or job order
d. Neither process nor job order
If the actual price of direct materials is $200 and the standard price of the direct
materials is $180,
a. There will be no direct materials quantity variance
b. The direct materials quantity variance will be unfavorable
c. The direct materials price variance will be favorable
d. The direct materials price variance will be unfavorable
Activities that are performed all at once on groups of products is classified as a
a. Unit-level activity.
b. Group-level activity.
c. Batch-level activity.
d. None of these answer choices are correct..
Cost-volume-profit analysis, or CVP, helps managers assess the impact of various
business decisions on company profits.
Morgan’s, Inc. has provided you with the following financial information:
Required:
Prepare a performance report for the period.
The following balances were gathered from Newport Industries general ledger.
Required:
Using the indirect method, prepare the cash flows provided by operating activities
section of Newport’s statement of cash flows.
What basic information is needed in order to calculate the level of sales to reach a target
operating income?
Mountaineer, Inc. currently makes 6,000 pairs of weatherproof hiking boots each year.
The boots sell for $119. Mountaineer has been manufacturing the boots and applying
the weatherproofing as the final process before packaging. However, the company is
concerned about the costs associated with the weatherproofing process. The company is
concerned that the EPA will not approve of their disposal of the residue from the
process, resulting in heavy monetary penalties. Mountaineer has found a manufacturing
company that can waterproof the boots and package them at a cost of $18 each. If the
company outsources the waterproofing and packaging of the boots, its insurance
premiums will be reduced. Mountaineer ‘s standard cost of the waterproofing and
packaging process for one unit is listed below.
Required
Should Barber outsource the waterproofing and packaging? Why?
Hunter Company produces personalized towel wraps. During May, the company’s
actual wage rate was $8.50. The standard wage rate is $8 per hour, and the standard
hours allowed for actual production was 9,000. The favorable direct labor efficiency
variance for May was $1,200.
Required:
How many hours were actually worked during May?
The accounts receivable turnover is calculated as
Fixed costs are those costs that do not change as the level of activity increases or
decreases. However, fixed costs may be classified as discretionary or committed.
Explain the differences in these classifications and give an example of each. Discuss
why managers should consider the impact of these costs in the decision making process
in times of falling profits.