1. Managerial accounting:

A. is unregulated.

B. produces information that is useful only for manufacturing organizations.

C. is based exclusively on historical data.

D. is regulated by the Securities and Exchange Commission (SEC).

E. generally focuses on reporting information about the enterprise in its entirety rather than by subunits.

2. The estimates used to calculate the predetermined overhead rate will

A. generally prove to be incorrect to some degree.

B. usually result in a nonzero balance left in the manufacturing overhead account at the

end of the year.

C. result in either overapplied or underapplied overhead.

D. be closed to cost of goods sold if there is under- or overapplied overhead.

E. all of the above.

3. Which of the following is true regarding job-order costing?

A. It is a type of product costing system whereby small numbers of products are

produced in distinct batches.

B. It is used exclusively in manufacturing environments.

C. It is used for continuous mass production of products.

D. It would always be used in the food processing industry.

E. It is used exclusively for products of a similar nature.

4. Madison Inc. is an Advertising Agency that uses a job-order cost system. Madison applies

overhead to jobs based on direct professional labor hours. At the beginning of the year,

overhead was estimated to be $75,000, direct professional labor hours were estimated to

be 15,000, and direct professional labor cost was projected to be $225,000. During the year,

Madison incurred actual overhead of $80,000, actual direct labor hours of 14,500, and

actual direct labor cost of $222,000. What was Madisons over- or under-applied overhead

during the year?

A. $5,000 under-applied

B. $5,000 over-applied

C. $7,500 under-applied

D. $7,500 over-applied

E. $3,000 over-applied

5. In computing the margin in an ROI analysis, which of the following is used?

A. Sales in the denominator

B. Net operating income in the denominator

C. Average operating assets in the denominator

D. Residual income in the denominator

E. Average operating assets in the numerator

6. Consider the following information:

Selling price per unit $25

Contribution margin $10

Fixed costs $45,000

Refer to the above information. What is the number of units that must be sold to break even?

A.3,000

B.4,000

C.4,500

D.1,800

E.367

7. Refer to the given information in 6. above. To earn a targeted net profit of $50,000, the total

dollar value of sales must be at least:

A. $ 8,000

B. $ 237,500

C. $ 112,500

D. $ 122,500

E $ 10,000

8. Variances are computed by taking the difference between which of the following?

A. Product cost and period cost.

B. Actual cost and differential cost.

C. Price factors and rate factors.

D. Actual cost and standard cost.

E. Product cost and standard cost.

9. Most companies base the calculation of the materials price variance on the:

A. number of units purchased.

B. number of units spoiled.

C. number of units that should have been used.

D. number of units actually used.

E. number of units to be purchased during the next accounting period.

10. Soderquist Corporation uses residual income to evaluate the performance of its divisions.

The company's minimum required rate of return is 11%. In April, the Commercial Products

Division had average operating assets of $100,000 and net operating income of $9,400. What

was the Commercial Products Division's residual income in April?

A. ($1,600)

B. $1,600

C. $1,034

D. ($1,034)

E. $9,400

11. National Ceramics, Inc., recently completed 45,000 units of a product that was expected to consume four pounds of direct material per finished unit. The standard price of the direct material was $8 per pound. If the firm purchased and consumed 186,000 pounds in manufacturing (cost = $1,534,500), the direct-materials quantity variance would be figured as:

A. $48,000F.

B. $48,000U.

C. $49,500F.

D. $49,500U.

E. none of the above.

12. Carolina Enterprises recently used 17,000 labor hours to produce 8,000 completed units. According to manufacturing specifications, each unit is anticipated to take two hours to complete. The company's actual payroll cost amounted to $200,600. If the standard labor cost per hour is $12, Carolina's labor rate variance is:

A. $2,000F.

B. $2,000U.

C. $3,400U.

D. $3,400F.

E. none of the above.

13. Smithfield Company collects 20% of a month's sales in the month of sale, 70% in the month

following sale, and 6% in the second month following sale. The remainder is uncollectible.

Budgeted sales for the next four months are:

January February March April

Budgeted sales. $200,000 $300,000 $350,000 $250,000 Cash collections in April are budgeted to be: A. $321,000 B. $245,000 C. $320,000

D. $292,000

E. $313,000

14. Rand, Inc. had an unfavorable labor efficiency variance and an unfavorable materials quantity variance. Which department might be held accountable for these variances?

A. Purchasing, because bad materials can harm labor efficiency.

B. Production, because inefficient workers may use more materials than allowed.

C. Purchasing and/or production.

D. Marketing.

E. Shipping

15. A static budget:

A. is based on one anticipated activity level.

B. is based totally on prior year's costs.

C. is based on a range of activity.

D. is preferred over a flexible budget in the evaluation of performance.

E. presents a clear measure of performance when planned activity differs from actual activity

16. Flexible budgets reflect a company's anticipated costs based on variations in:

A. activity levels.

B. inflation rates.

C. managers.

D. anticipated capital acquisitions.

E. standards.

17. Grove Street Merchandising anticipated selling 24,000 units of a major product and paying sales commissions of $5 per unit. Actual sales and sales commissions totaled 23,600 units and $120,360, respectively. If the company used a flexible budget for performance evaluations, Grove Street would report a cost variance of:

A. $360U.

B. $360F.

C. $2,360U.

D. $2,360F.

E. some other amount not listed above.

18. Which of the following is not an example of a responsibility center?

A. Cost center.

B. Revenue center.

C. Profit center.

D. Investment center.

E. Contribution center.

19. If the head of a hotel's food and beverage operation is held accountable for revenues and costs, the food and beverage operation would be considered a(n):

A. cost center.

B. revenue center.

C. investment center.

D. profit center.

E. contribution center.

20. The ROI calculation will indicate:

A. the percentage of each sales dollar that is invested in assets.

B. the sales dollars generated from each dollar of income.

C. how effectively a company used its invested capital.

D. the invested capital generated from each dollar of income.

E. the overall quality of a company's earnings.

21. The City of Miami is about to replace an old fire engine with a new vehicle in an effort to save maintenance and other operating costs. Which of the following items, all related to the transaction, would not be considered in the decision?

A. Purchase price of the new vehicle.

B. Purchase price of the old vehicle.

C. Savings in operating costs as a result of the new vehicle.

D. Proceeds from disposal of the old vehicle.

E. Future depreciation on the new vehicle.

22. Which of the following costs can be ignored when making a decision?

A. Opportunity costs.

B. Differential costs.

C. Sunk costs.

D. Relevant costs.

E. All future costs.

23. Which of the following represents the correct order in which the indicated budgets for a

manufacturing company would be prepared?

A.	Sales budget, cash budget, direct materials budget, direct labor budget
B.	Production budget, sales budget, direct materials budget, direct labor budget
C.	Sales budget, cash budget, production budget, direct materials budget
D.	Sales budget, direct materials budget, direct labor budget, production budget
E.	Selling and administrative expense budget, cash budget, budgeted income statement, budgeted balance sheet

24. The following costs appear in Porter Company's flexible budget at an activity level

of 15,000 machine-hours:

Total Cost

Indirect materials......... $7,800

Factory rent.. $18,000

What would be the flexible budget amounts at an activity level of 12,000 machine-hours

if indirect materials is a variable cost and factory rent is a fixed cost?

Indirect Materials Factory Rent

$7,800 $14,400

$7,800 $18,000

$6,240 $14,400

$6,240 $18,000

$7,020 $20,000

25. Which of the following conditions would cause absorption-costing net income to be lower

than variable-costing net income?

A. Units sold exceeded units produced.

B. Units sold equaled units produced.

C. Units sold were less than units produced.

D. Sales prices decreased.

E. Selling expenses increased.

26. A new machine that costs $80,800 is expected to save annual cash operating costs of

$20,000 over each of the next seven years. The machine's internal rate of return is:

A. approximately 12%.

B. approximately 14%.

C. approximately 16%.

D. approximately 18%.

E. some other figure not noted above.

27. Mount Royal Corporation has two divisions: the Beta Division and the Alpha Division. The

Beta Division has sales of $580,000, variable expenses of $301,600, and traceable fixed

expenses of $186,500. The Alpha Division has sales of $510,000, variable expenses of

$178,500, and traceable fixed expenses of $222,100. The total amount of common fixed

expenses not traceable to the individual divisions is $235,500. What is the company's net

operating income? A. $374,400 B. $201,300 C. $609,900

D. ($34,200)

E. $42,900

28. Capital-budgeting decisions primarily involve:

A. emergency situations.

B. long-term decisions.

C. short-term planning situations.

D. cash inflows and outflows in the current year.

E. planning for the acquisition of capital.

29. Santa Ana Corporation has computed the following unit costs for the year just ended:

Direct material used	$25
Direct labor	19
Variable manufacturing overhead	35
Fixed manufacturing overhead	40
Variable selling and administrative cost	17
Fixed selling and administrative cost	32

Which of the following choices correctly depicts the per-unit cost of inventory under variable costing and absorption costing?

	Variable Costing	Absorption Costing
A.	$79	$119
B.	$79	$151
C.	$96	$119
D.	$96	$151
E.	Some other combination of figures not listed above.

30. A salesperson from a different computer company claims that his machine, which costs $85,000 and has an estimated service life of four years, will generate annual savings for the city of $32,000. If the discount rate is 10%, the net present value of this system would be:

A. $16,440.

B. $23,175.

C. $63,512.

D. $101,440.

E. some other amount.