The primary objective of a management accountant is to provide...

Question 1 options:

	stockholders and potential investors with financial information
	banks and other creditors with financial information
	internal management with information for planning & control
	the IRS with taxable income information

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Question 2 (2.5 points)

Management accountants are required by the Institute of Management Accountants (IMA) to obtain a certain number of continuing professional education (CPE) hours. This is to comply with which of the following standards of ethical conduct?

Question 2 options:

	confidentiality
	integrity
	competence
	credibility

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Question 3 (2.5 points)

Which of the following is a fixed factory overhead cost?

Question 3 options:

	depreciation for office equipment using straight line depreciation
	direct labor costs
	factory rent
	office president's salary
	advertising expense

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Question 4 (2.5 points)

A company manufactures small planes. One of these planes was started on April 15, completed on May 15, and sold on June 15. Where would the cost of this plane appear on the April, May, and June financial statements respectively? (assume the financial statements are prepared at the end of each month)

Question 4 options:

	work-in-process, work-in-process, cost of goods sold
	direct materials, work-in-process, finished goods
	work-in-process, cost of goods sold, gross margin
	work-in-process, finished goods, cost of goods sold

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Question 5 (2.5 points)

Which of the following is a variable factory overhead expense?

Question 5 options:

	Direct material
	Indirect material
	Factory supervisors salary
	Direct labor
	Factory rent

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Question 6 (2.5 points)

An understatement of the Finished Goods Inventory account at the end of a period will lead to which of the following effects?

Question 6 options:

	an understatement of the COGS in the current period
	an overstatement of the Gross Margin in the current period
	an understatement of the Net Income for the current period
	an understatement of the Cash balance for the current period

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Question 7 (2.5 points)

Costs of goods that have been started but not completed by the end of the period will be recorded as?

Question 7 options:

	Ending Inventory WIP
	COGM
	COGS
	Ending Inventory FG

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Question 8 (2.5 points)

Which of the following statements is true:

Question 8 options:

	a misclassification of an operating expense as a FOH expense will understate the unit cost of a product
	a misclassification of a FOH expense as an operating expense will overstate the unit cost of a product
	a misclassification of an indirect material expense as a direct labor expense will have no effect on the COGM
	a misclassification of an office supplies expense as a FOH expense will have no effect on the COGM

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Question 9 (2.5 points)

Use the following information to answer questions 9-13: Cooks Co. reports the following information for January

Office salaries	$ 25,000
Advertising expense	$ 13,000
Material Inventory, January 1	$ 39,000
Direct Labor expense	$ 30,000
Material Inventory, January 31	$ 38,000
Office Supplies	$ 1,000
Sales	$118,000
WIP Inventory, January 1	$ 12,000
Material purchased	$16,000
Finished Goods Inventory, January 1	$24,000
Depreciation on factory machine	$12,000
Finished Goods Inventory, January 31	$22,000
Factory utilities	$6,000
Factory rent	$17,000
WIP Inventory, January 31	$16,000
Units completed	5,600

Determine the cost of materials used in January?

Question 9 options:

	$17,000
	$38,000
	$55,000
	$82,000

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Question 10 (2.5 points)

Use the following information to answer questions 9-13:

Cooks Co. reports the following information for January

Office salaries	$ 25,000
Advertising expense	$ 13,000
Material Inventory, January 1	$ 39,000
Direct Labor expense	$ 30,000
Material Inventory, January 31	$ 38,000
Office Supplies	$ 1,000
Sales	$118,000
WIP Inventory, January 1	$ 12,000
Material purchased	$16,000
Finished Goods Inventory, January 1	$24,000
Depreciation on factory machine	$12,000
Finished Goods Inventory, January 31	$22,000
Factory utilities	$6,000
Factory rent	$17,000
WIP Inventory, January 31	$16,000
Units completed	5,600

Determine the COGM for January?

Question 10 options:

	$76,000
	$78,000
	$80,000
	$94,000

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Question 11 (2.5 points)

Use the following information to answer questions 9-13:

Cooks Co. reports the following information for January

Office salaries	$ 25,000
Advertising expense	$ 13,000
Material Inventory, January 1	$ 39,000
Direct Labor expense	$ 30,000
Material Inventory, January 31	$ 38,000
Office Supplies	$ 1,000
Sales	$118,000
WIP Inventory, January 1	$ 12,000
Material purchased	$16,000
Finished Goods Inventory, January 1	$24,000
Depreciation on factory machine	$12,000
Finished Goods Inventory, January 31	$22,000
Factory utilities	$6,000
Factory rent	$17,000
WIP Inventory, January 31	$16,000
Units completed	5,600

Determine the Cost of Goods Sold for January?

Question 11 options:

	$76,000
	$78,000
	$80,000
	$94,000

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Question 12 (2.5 points)

Use the following information to answer questions 9-13:

Cooks Co. reports the following information for January

Office salaries	$ 25,000
Advertising expense	$ 13,000
Material Inventory, January 1	$ 39,000
Direct Labor expense	$ 30,000
Material Inventory, January 31	$ 38,000
Office Supplies	$ 1,000
Sales	$118,000
WIP Inventory, January 1	$ 12,000
Material purchased	$16,000
Finished Goods Inventory, January 1	$24,000
Depreciation on factory machine	$12,000
Finished Goods Inventory, January 31	$22,000
Factory utilities	$6,000
Factory rent	$17,000
WIP Inventory, January 31	$16,000
Units completed	5,600

Determine the Net Income (ignoring taxes) for January?

Question 12 options:

	($1,000)
	$1,000
	$38,000
	$39,000

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Question 13 (2.5 points)

Use the following information to answer questions 9-13:

Cooks Co. reports the following information for January

Office salaries	$ 25,000
Advertising expense	$ 13,000
Material Inventory, January 1	$ 39,000
Direct Labor expense	$ 30,000
Material Inventory, January 31	$ 38,000
Office Supplies	$ 1,000
Sales	$118,000
WIP Inventory, January 1	$ 12,000
Material purchased	$16,000
Finished Goods Inventory, January 1	$24,000
Depreciation on factory machine	$12,000
Finished Goods Inventory, January 31	$22,000
Factory utilities	$6,000
Factory rent	$17,000
WIP Inventory, January 31	$16,000
Units completed	5,600

Compute the unit cost for January (round to 2 decimal places)

Question 13 options:

	$14.64
	$13.93
	$14.11
	$14.82

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Question 14 (2.5 points)

From Aaron's year-end financial statements you observe that the finished goods inventory has increased sharply during the current year. This indicates that during the current year Aaron

Question 14 options:

	finished more goods than were sold
	sold more goods than were finished
	finished the same amount of goods as sold
	sold more goods than last year

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Question 15 (2.5 points)

Use the following information to answer questions 15 17 Photon Dynamics has run two simple regressions and one multiple regression to estimate FOH costs: the simple regressions use # of units produced and the # of machine hours as the independent variables whereas the multiple regression uses both variables. The outputs of these 3 regressions are provided below:

Item	Simple regressiom (units)	Simple regression (machine hours)	Multiple regression (both variables)
Intercept	$3,000	$2,600	$3,200
R2	0.89	0.67	0.92
Coefficient/slope	$2.50	$1.82	$1.80 (units)
			$4.90 (machine hours)

State the best cost estimation model to estimate FOH costs?

Question 15 options:

Y = $3,000 + 0.89 (# of units)

Y = $2,600 + 1.82 (# of m/c hours)

Y = $3,200 + 1.80 (# of units) + 4.90 (# of m/c hours)

Y = $3,200 + 2.5 (# of units) + 1.82 (# of m/c hours)

Use the following information to answer questions 15 17

Photon Dynamics has run two simple regressions and one multiple regression to estimate FOH costs: the simple regressions use # of units produced and the # of machine hours as the independent variables whereas the multiple regression uses both variables. The outputs of these 3 regressions are provided below:

Item	Simple regressiom (units)	Simple regression (machine hours)	Multiple regression (both variables)
Intercept	$3,000	$2,600	$3,200
R2	0.89	0.67	0.92
Coefficient/slope	$2.50	$1.82	$1.80 (units)
			$4.90 (machine hours)

Which of the following statements is false (with respect to the best model)?

Question 17 options:

	92% of the variation in FOH costs can be explained by changes in the # of units produced and the # of m/c hours used
	FOH costs are estimated to increase by $1.80 for every additional unit produced
	The estimated amount of fixed FOH costs is $3,985
	FOH costs are estimated to increase by $4.90 for every additional m/c hour used

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Question 18 (2.5 points)

The slope of the regression line is

Question 18 options:

	the rate at which the independent variable varies with a change in the dependent variable
	the rate at which the dependent variable varies with a change in the independent variable
	the level of total fixed costs
	the level of total variable costs

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Question 19 (2.5 points)

Which of the following statements is false?

Question 19 options:

	R2 indicates the % of variation in the dependent variable that is explained by the independent variable(s)
	the most critical step in the regression process is the correct identification of the independent variable(s)
	the cost estimation model obtained from a regression analysis is more reliable than a cost estimation model obtained using the high-low method
	in a multiple regression model, an independent variable with a t-statistic of -2.46 indicates that it is not making a contribution to the overall model

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Question 20 (2.5 points)

Which of the following statements is false?

Question 20 options:

	In a multiple regression model, the t-stat for each independent variable indicates the goodness of fit for the overall model
	It is possible to have a multiple regression model with a strong R2 even though an individual cost driver may not be making a significant contribution to the model
	The slope of the cost estimation model indicates the rate of change in the dependent variable with a unit change in the independent variable
	A cost estimation model using the high-low method will almost always produce a different intercept & slope compared to a regression model