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WorksheetsManagement Accounting Quiz
Total questions: 78
Worksheet time: 39mins
Which component of the AMPS model addresses the question of the best way for management accountants to communicate their analyses with decision-makers?
Ask the question
Master the data
Perform the analysis
Share the story
Which of the following is considered discretionary information for a company's accountants to provide?
The break-even level of a new product
The annual report submitted to shareholders detailing financial performance
The federal tax return
Sales information as part of the sales tax return
Which of the following value chain activities is considered to be a primary activity?
Procurement
Inbound logistics
Human resources management
Information technology
What requires context to create information?
Knowledge
Data
Facts
Data stores
The analysis of variances (e.g., actual performance is different from budgeted performance) is most often associated with which type of analytics?
Descriptive analytics
Diagnostic analytics
Predictive analytics
Prescriptive analytics
Summary statistics are most often associated with which type of analytics?
Descriptive analytics
Diagnostic analytics
Predictive analytics
Prescriptive analytics
Time series analysis is most often associated with which type of analytics?
Descriptive analytics
Diagnostic analytics
Predictive analytics
Prescriptive analytics
Which of the following is not one of the four overarching ethical principles mentioned in the 2017 IMA Statement of Ethical Professional Practice?
Competence
Honesty
Confidentiality
Credibility
Which questions aim to more clearly understand why net income is decreasing when revenues are increasing?
What happened? What is happening?
Why did it happen? What are the root causes of past results?
Will it happen in the future? What is the probability something will happen? Is it forecastable?
What should we do based on what we expect will happen? How do we optimize our performance based on potential constraints?
What type of visualization is used to track overtime labor on a continuous, real-time basis?
Dashboard with static display
Dashboard with dynamic display
Conditional formatting
Bar chart for the past 10 months
Which management accounting question will require predictive analytics?
Why did labor expenses increase over the past year as compared to prior years?
Should the company rent or lease its headquarters office building?
Can we forecast future sales for this company?
Why did our cost structure (fixed and variable costs) change over the past year?
Which management accounting question will require prescriptive analytics?
Why did the company perform worse this year than last year?
Should the company manufacture its product, or should it outsource the production of its products to an outside contractor?
Can we forecast future sales, earnings, and cash flows for this company?
What was the total revenue last quarter?
If a manager is a decision-maker, and a data scientist is a developer, then what best describes a management accountant?
An interpreter
An expert at investments
An intermediary
A broker
Which of the following is mandatory information that a company's accountants is required to maintain?
The cost drivers used to allocate overhead
The calculation of the difference between actual and budgeted performance
The product price that should be charged to maximize profits
The amount of dividends paid to shareholders
Which entity sponsors the certification of management accountants as a CMA?
Institute of Management Accountants
Institute of Certified Public Accountants
American Institute of Management Accountants
Association of Certified Management Accountants
Which of the following applies to management accounting?
There are required audits of management accounting information.
Management accounting works to minimize the cost of compliance with regulatory entities.
A source of management accounting data comes from a cost accounting system.
Common output is the income statement.
Performing a regression falls into which of the following components of the AMPS model?
Ask the question
Master the data
Perform the analysis
Share the story
Which data visualization is used to evaluate trends of values over time?
Bar Chart
Pie Chart
Scatterplot
Line Graph
To estimate costs using prior data, regression analysis is preferable to the high-low method because:
Regression analysis is not influenced by data outliers.
Regression analysis makes use of more data.
Regression analysis is computationally simpler.
Regression analysis emphasizes data that are more recent.
Which of the following is not an advantage of using regression analysis to estimate costs rather than the high-low method?
Regression is likely more accurate because it uses more data points in the calculations.
Regression uses simpler calculations.
Regression provides an estimate of fixed costs.
Regression can be used to predict future costs.
In a regression analysis examining the effect of customer visits on total office costs, R is 0.12. Interpret R.
There is a strong positive correlation between customer visits and total office costs.
There is a strong negative correlation between customer visits and total office costs.
There is little or no linear relationship between customer visits and total office costs.
There is a curvilinear relationship between customer visits and total office costs.
Which of the following describes the precision of an estimate in a regression analysis?
Correlation
Standard error
Coefficient
Margin of safety
Snack Pantry regresses total costs on units produced. Results of the regression indicate a statistically significant coefficient of 2.5 on the units produced variable. How should this result be interpreted?
Each unit costs an average of $2.50 to produce.
Each unit has an average variable cost of $2.50.
Each unit has an average fixed cost of $2.50.
Each unit has an average labor cost of $2.50.
Which of the following is not used in CVP analysis?
Fixed cost per unit
Variable cost per unit
Total operating income
Revenue per unit
Which of the following equations is incorrect?
Contribution margin - fixed costs = operating income
Contribution margin per unit + variable cost per unit = sales price
(Contribution margin per unit * units) - Fixed cost per unit = sales price
Revenue - variable costs -operating income = fixed costs
Which of the following costs is deducted from revenue to calculate contribution margin?
Depreciation
Hourly wages for the sales department
Rent for production facility
Production supervisor salary
All things equal, how will the purchase of additional production equipment affect a company's breakeven point?
The breakeven point will increase.
The breakeven point will decrease.
The breakeven point will remain the same.
It depends on the price of the production equipment.
Trader Mo's is a furniture company. The company has decided to alter its strategy by selling its automated production equipment and producing furniture using skilled labor instead. However, in the short-term, the company is unable to cut fixed costs due to contractual obligations related to production equipment. In the short-term, how will this change in strategy affect the breakeven point?
The breakeven point will increase.
The breakeven point will decrease.
The breakeven point will remain the same.
Indeterminable without knowing the average selling price of the furniture.
Gouda Vibes Company must increase profitability this year to avoid bankruptcy. Gouda Vibes can sell all units produced, but it faces a production constraint: a shortage of skilled labor. To maximize profit, Gouda Vibes should produce:
products that have the highest contribution margin.
products that have the highest sales price.
products that use the least amount of skilled labor.
products that have the highest contribution margin per hour of skilled labor.
Operating leverage is a measure of:
a company's cost structure
a company's profitability
a company's competitiveness
a company's strategy
All things equal, which of the following will decrease a company's operating leverage?
Purchasing production equipment
Hiring supervisors who work on salary
Increasing production
Automating production to decrease direct labor
When companies sell more units than they produce, operating income will be highest under:
Absorption costing
Variable costing
Standard costing
Mixed costing
Which of the following is considered a period cost under variable costing?
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Which of the following products or services is least appropriate for a job costing system?
Furniture
Soft drinks
Medical services
Interior design consultations
Which of the following is not included as a production cost in a job order costing system?
Production machine maintenance
Marketing
Indirect materials
Factory utilities
All of the following are reasons why companies are likely to use applied, rather than actual, overhead for job costing EXCEPT:
Companies have difficulty tracing supervisor labor costs.
Companies have significant amounts of indirect costs.
Companies face a delay when gathering indirect cost data.
Companies decide not to trace certain materials costs.
Correcting an overapplication of overhead will result in increased:
finished goods inventory.
work-in-process inventory.
cost of goods sold.
net income.
Nature Meadow Company analyzes indirect costs and determines that 85% of its costs are related to machine maintenance and depreciation. Which of the following is the most appropriate application base?
Direct labor hours
Direct labor costs
kWh (kilowatt hours) consumed
Machine hours
Job costing is most likely to be used by companies that produce:
jewelry.
paint.
bottled water.
breakfast cereals.
In job costing, costs are accumulated by a specific cost object. Which of the following is not a cost object in job costing?
An individual client
A customized order
An individualized service
Monthly factory production costs
Which of the following information is not contained on a job cost sheet?
Direct labor hours
Amount of direct materials purchased
Direct labor rates
Applied overhead rates
Which of the following represents a credit to the manufacturing overhead account?
The application of overhead
The use of indirect materials
The use direct labor
The use of supervisor labor
Snack Mart uses a normal costing system and applies overhead at a rate of $10 per direct labor hour. During the year, the company had the following data: Actual Direct Labor costs: $80,000 Actual Direct Labor hours: 3,000 hours Estimated Direct Labor hours: 3,500 hours Actual Direct Materials: $30,000 Actual Manufacturing Overhead: $25,000 Prior to any adjusting entries to manufacturing overhead, what are the total production costs for Snack Mart for the year?
$135,000
$140,000
$145,000
$150,000
Given the following information about Nibbles N Scribbles Co., what was Nibbles N Scribbles' predetermined application rate for manufacturing overhead (MOH)? MOH Application base: machine hours (MH)s Estimated MHs: 10,000 hours Actual MHs: 12,000 hours Estimated overhead costs: $48,000 Actual overhead costs: $50,000
$4.00/machine hour
$4.17/machine hour
$4.80/machine hour
$5.00/machine hour
Study Volt Inc, underapplied manufacturing overhead during the quarter. Assuming no adjusting entry is made, which of the following will be overstated?
Net income
Finished goods inventory
Work-in-process inventory
Cost of goods sold
Zen Craft applies overhead at a rate of $4.50 per direct labor hour. Zen Craft's actual overhead rate was $4.25. Which of the following is correct?
Actual total overhead must be higher than estimated total overhead.
Actual total overhead must be lower than estimated total overhead.
Zen Craft had fewer direct labor hours than anticipated during the year.
There is insufficient data to determine the relationship between estimated and actual overhead.
Bake It Easy incurred more overhead costs than it applied. Prior to any adjusting entries, which of the following must be true?
The overhead application rate was higher than the actual overhead rate.
The manufacturing overhead account has a debit balance.
Net income is overstated.
Bake It Easy produced more goods than anticipated.
Regal Furnishers used $10,000 worth of indirect materials in production in June. The journal entry made to record this transaction should include a $10,000 debit to:
Work-in-Process Inventory.
Accounts Payable.
Raw Materials.
Manufacturing Overhead.
Under a normal costing system, which of the following is not included when computing the cost of a job?
Direct materials
Direct labor
Sales Commision
Applied overhead
Shield Bunny had the following information: Allocation base: Direct labor hours (DLH) Estimated DLH: 20,000 hours Actual DLH: 25,000 hours Estimated overhead cost/DLH: $5/DLH Actual overhead cost/DLH: $4/DLH Assuming no adjusting entry to manufacturing overhead, which of the following is true?
There will be a debit balance in the Manufacturing Overhead account.
There will be a credit balance in the Manufacturing Overhead account.
There will be a zero balance in the Manufacturing Overhead account.
The balance in the Manufacturing Overhead account can
Under a job costing system, which of the following is most likely to be considered indirect labor during the construction of a chair?
Significant labor used to shape and cut wood
Moderate labor used to assemble wood
Minimal labor used to stain the chair
Moderate labor used to closely supervise the production of chairs
Under a job cost system, which of the following is most likely to be considered indirect materials for Alfredough's orders?
Cost of meat used during preparation of food
Cost of fruit used during preparation of food
Cost of vegetables used during preparation of food
Cost of salt used during preparation of food
In practice, items such as wood screws and glue used in the production of school desks and chairs would most likely be classified as
direct labor.
factory overhead.
direct materials.
period costs.
Which of the following allocation bases is most likely to be the cost driver of supervisor labor?
Direct labor hours
Machine hours
Units produced
Square footage
Which of the following allocation bases is most likely to be the cost driver of quality control?
Direct labor hours
Machine hours
Units produced
Square footage
Undercosting a product or service can result in:
overstated product efficiency.
overstated product market share.
overstated product profitability.
undercosting all products and services.
The implementation of a two-stage cost allocation revealed that Basic Box was __________.
undercosted
overcosted
cross-costed
inefficient
When Crimson Box implements two-stage cost allocation, how are manufacturing overhead costs affected?
Total manufacturing overhead costs increase.
Total manufacturing overhead costs decrease.
Total manufacturing overhead costs are unchanged.
Total manufacturing overhead costs increase, but product costs remain the same.
Which of the following cost systems is least likely to conform to GAAP?
Traditional job-order costing
Two-stage job-order costing
Activity-based costing
Process costing
Which of the following indirect costs can be included as a product cost under activity-based costing but should not be included as a product cost according to GAAP?
Machine depreciation
Factory rent
Supervisor labor
Advertising expenses
Which of the following indirect costs is not included as a product cost under activity-based costing but should be included as a product cost according to GAAP?
Machine depreciation
Factory rent
Supervisor labor
Advertising expenses
Under activity-based costing, which of the following costs are not allocated to individual products and services?
Marketing costs
Warranty costs
Facility-support costs
Indirect labor costs
The costs of testing a new product and obtaining a patent are examples of:
unit-level costs.
batch-level costs.
product-line costs.
facility-support costs.
This pricing strategy is likely the result of Big T's analysis of ___________.
unit-level costs
batch-level costs
product-line costs
facility-support costs
In an activity-based costing system, costs are allocated to jobs and products based on ____________.
resource usage
simplicity
profit margins
historic costs
Which of the following levels of cost is most susceptible to changes in production volume?
Unit-level
Batch-level
Product-line
Facility-support
Which of the following is the chief difficulty of implementing and maintaining an activity-based costing system?
Allocating costs from cost pools to jobs and products
Determining activity cost pools
Allocating costs to activity cost pools
Allocating traced costs to products
Practical capacity typically means that workers are using _________ of their time productively.
65%-70%
75%-80%
85%-90%
95%-100%
Which of the following factors indicates that a company should not implement activity-based costing?
Minimal overhead costs
Complex products
Extensive product variety
Excessive profits
Relative to traditional activity-based costing, time-driven activity-based costing is easier to implement because it removes the need to:
Estimate the resources used by activities
Query employees about how they spend their time
Allocate indirect costs
Identify activity cost pools.
When using activity-based costing techniques, which one of the following departmental activities would be expected to use machine hours as a cost driver to allocate overhead costs to production?
Plant cafeteria
Machine setups
Material handling
Robotics painting
A company is considering the implementation of an activity-based costing and management program. The company:
should focus on manufacturing activities and avoid implementation with service-type functions.
will probably find a lack of software in the marketplace to assist with the related recordkeeping.
will likely gain added insights into causes of cost.
will likely use fewer cost pools than it did under more traditional accounting methods.
Under activity-based costing, which one of the following statements is correct?
The muffins are $2,000 more profitable.
The cheesecakes are $75 more profitable.
The muffins are $1,925 more profitable.
The muffins have a higher profitability as a percentage of sales and, therefore, are more advantageous.
Which of the following is not a reason for sharing support services?
Increased efficiency
Increased expertise
Improved consistency
Improved ability to customize shared services to groups and departments
Which of the following departments is least likely to be considered a support department?
Motor pool
Cafeteria
Information technology department
Assembly department
When allocating the costs of a single support department to production departments, the dual-rate method determines an allocation rate for variable costs by using the __________ usage of support department resources, and it allocates costs by multiplying this rate by ___________ usage of support department resources.
actual; actual
actual; budgeted
budgeted; actual
budgeted; budgeted
The dual-rate method of allocating support department costs relies on categorizing costs as either:
fixed or variable.
inventoriable or non-inventoriable.
recurring or unique.
product or period.
When allocating the costs of a single support department to production departments, the dual-rate method determines an allocation rate for fixed costs by using the __________ usage of support department resources, and it allocates costs by multiplying this rate by ___________ usage of support department resources.
actual; actual
actual; budgeted
budgeted; actual
budgeted; budgeted
