Which of the following is not a duty of a management accountant under the IMA
Statement of Ethical Professional Practice ‘s confidentiality standard?
a.Refrain from engaging in any conduct that would prejudice carrying out duties
ethically.
b.Keep information confidential except when disclosure is authorized or legally
required.
c.Inform all relevant parties regarding appropriate use of confidential information.
Monitor subordinates ‘ activities to ensure compliance.
d.Refrain from using confidential information for unethical or illegal advantage.
A discretionary fixed cost
a.Remains the same per unit regardless of the level of activity.
b.Increases as the level of activity increases.
c.Can be changed in the short run.
d.Can be changed over the long run.
Casper Concrete manufactures custom concrete countertops for restaurants and
individual homeowners. Casper’s actual fixed overhead for the year was $86,600.
During the year Casper produced 8,500 square feet of countertop and used 4,420 direct
labor hours. Casper had budgeted to produce 9,000 square feet of countertop and had
budgeted to use 4,500 direct labor hours. Casper’s fixed overhead spending variance
was $1,200 unfavorable for the year. What was Casper’s budgeted fixed overhead for
the year (if necessary, round your answer to the nearest dollar)?
a. $87,800
b. $85,400
c. $88,167
d. $86,967
Assume that activity cost totals $180,000. The company produced an average of 40
units per batch and the number of batches produced is 9,000. Calculate the activity rate.
a. $20 per batch
b. $4,500 per batch
c. 225 per batch
d. .005 per batch
The algebraic equation for the direct labor rate variance is
a. Direct labor rate variance = AQ x (AP – SP).
b. Direct labor rate variance = SQx (AP – SP).
c. Direct labor rate variance = SP x (AQ – SQ).
d. Direct labor rate variance = AP x (AQ – SQ).
A company can increase its throughput by which of the following actions?
a. Decreasing sales.
b. Increasing costs.
c. Either by decreasing sales or by increasing costs.
d. Neither by decreasing sales nor by increasing costs.
Mounds Company has provided you with the following sales data.
The company requires that 5% of the next month ‘s sales be on hand at the end of each
month. Budgeted production for October would be
a. 30,000.
b. 31,000
c. 31,500
d. 35,000
Assume a sales price per unit of $25, variable cost per unit $15, and total fixed costs of
$18,000. What is the breakeven point?
a. 45,000 units
b. $45,000
c. 37,500 units
d. $37,500
Ans: b
The easiest part of calculating the total product cost is
a. Separating direct material and indirect material.
b. Allocating costs to products.
c. Adding the direct materials and direct labor costs to overhead.
d. None of these answer choices are correct.
Any costs that a company incurs to acquire raw materials and convert them to finished
goods ready for sale are referred to as
a. Direct costs.
b. Period costs.
c. Manufacturing costs.
d. None of these answer choices are correct.
Percy ‘s Pickled Snacks produces several types of pickled vegetables. The company
budgets for each quarter in the last month of the previous quarter. In early March, Percy
is preparing the budget for pickled beets. Budgeted sales are 12,000 jars for April,
16,000 jars for May, and 19,000 jars for June. Each jar requires 1.2 pounds of beets.
The pickling process takes 60 minutes for 20 jars. Because pressurized cooking is used,
the processing is monitored by an employee at all times. Each jar of pickled beets sells
for $15.00.
Percy requires ending Finished Goods inventory equal to 25% of the following month ‘s
sales. Other information is as follows:
What is Percy ‘s cost of goods sold for April?
a. $150,150
b. $138,600
c. $120,900
d. $111,600
Phelps Piping Company manufactures PVC pipe. The company has provided the
following selected financial information:
Required:
a. What is Phelps’ average days to sell inventory for 2014? b. What is Phelps’ debt ratio
for 2014?
Wolfe Manufacturing Company has the following information related to variable
overhead:
Required: a. Calculate the variable overhead spending variance for the period. b.
Calculate the variable overhead efficiency variance for the period.
Indicators that an activity-based costing analysis may be appropriate include all the
following except
a. Bids for complex products are accepted, while bids for simple products are rejected.
b. Products are similar and consume resources in the same way.
c. High-volume jobs show losses or minimal profits, while low-volume jobs show
healthy profits.
d. Bids for jobs that require ‘special” processing are always accepted.
To reduce the cost to deliver a product or service to consumers, a company must focus
on
a. Operational efficiency.
b. Location.
c. Sales mix.
d. Competition.
Which of the following will probably not be a result if a company’s liquidity is poor?
a. Workers will quit if they are not paid on time.
b. Debt or Equity will exceed the company’s maximum allowed amount.
c. Banks may not loan the company funds.
d. Customers will seek other sources of goods when the company’s product is not
available.
Probably the most common measure of short-term liquidity is the
a. Acid-test.
b. Current ratio.
c. Quick ratio.
d. Working capital.
In their book Killer Customers, Larry Selden and Geoffrey Colvin estimate what
percentage of a company’s customers generates approximately 120% of a company’s
profits?
a. 20%
b. 40%
c. 60%
d. 80%