Managerial Accounting IVY software
If the breakeven is 5000 units and fixed costs are $50,000, what is the contribution margin per unit? Select one: a. $5 b. $10 c. $15 d. None of the above
b. $10
If the actual overhead is $152,000 and the flexible budget overhead for actual production is $151,000, the controllable overhead variance is Select one: a. $1000 favorable b. $1000 unfavorable c. 0 d. None of the above Incorrect
b. $1000 unfavorable
The audit function reports to the Select one: a. CFO b. Board of directors c. Both A and B d. CEO
Both A and B
Which of the following will be found on an absorption costing income statement but not on a variable costing income statement? Select one: a. Gross margin b. Cost of goods sold c. Both A and B d. Contribution margin
Both A and B
If units produced are more than units sold, net income using absorption costing is Select one: a. Greater than variable costing b. Less than variable costing c. The same as variable costing
Greater than variable costing
Managerial accounting reports are prepared for: Select one: a. Management b. External parties such as creditors. c. The Internal Revenue Service d. None of the above
Management
Variable costing is used for internal reporting but absorption costing is used for external reporting. Select one: a. TRUE b. FALSE
TRUE
The standard for direct labor for product B is two hours at $20 per hour. If a firm produces 200 units of product B and uses 410 hours at $18 per hour, the direct labor efficiency variance is Select one: a. $200 unfavorable b. $200 favorable c. $400 unfavorable d. $400 favorable
a. $200 unfavorable
If the selling price is $5/unit, the variable cost is $1/unit and the fixed cost is $20,000, the breakeven in units is Select one: a. 5000 b. 4000 c. 3000 d. None of the above
a. 5000
Which costing approach is in accordance with generally accepted accounting principles? Select one: a. Absorption costing b. Variable costing c. Direct Costing d. None of the above
a. Absorption costing
In the schedule of cost of goods manufactured, work in process beginning inventory is Select one: a. Added to the cost for the period. b. Subtracted from the cost for the period c. Neither A nor B
a. Added to the cost for the period
A budget is an integral part of the planning process. Select one: a. TRUE b. FALSE
a. TRUE
A fixed cost per unit decreases as the production level increases. Select one: a. TRUE b. FALSE
a. TRUE
Direct labor costs are not a part of the sales and administrative budget. Select one: a. TRUE b. FALSE
a. TRUE
Direct labor is a conversion cost. Select one: a. TRUE b. FALSE
a. TRUE
In every case, with total returns being equal, the investment which provides cash flow sooner is the superior choice. Select one: a. TRUE b. FALSE
a. TRUE
Overhead volume variance is a production indicator. Select one: a. TRUE b. FALSE
a. TRUE
Process costing requires the use of equivalent units. Select one: a. TRUE b. FALSE
a. TRUE
The labor rate variance calculation involves actual direct labor hours used in production. Select one: a. TRUE b. FALSE
a. TRUE
The overhead variance between the actual production and the anticipated production is Select one: a. The overhead volume variance b. The controllable overhead variance c. The flexible budget variance d. None of the above
a. The overhead volume variance
The budgeted balance sheet is done Select one: a. Prior to the cash receipts budget b. After the cash receipts budget c. Prior to the income statement d. None of the above
b. After the cash receipts budget
The timing of cash receipts and cash disbursements is essential to the development of the Select one: a. Budgeted income statement b. Budgeted balance sheet c. Cost of goods sold budget d. None of the above
b. Budgeted balance sheet
The difference between the actual overhead cost and the flexible budget level of overhead for actual production is called Select one: a. Overhead volume variance b. Controllable overhead variance c. Budget variance d. None of the above
b. Controllable overhead variance
A cash receipts budget is necessary to develop the cost of goods sold budget. Select one: a. TRUE b. FALSE
b. FALSE
A fixed cost changes in total over increasing amounts of units produced. Select one: a. TRUE b. FALSE
b. FALSE
A variable cost per unit decreases as the production level increases. Select one: a. TRUE b. FALSE
b. FALSE
Absorption costing clearly separates fixed costs from variable costs. Select one: a. TRUE b. FALSE
b. FALSE
Breakeven indicates that the sales dollars cover only fixed costs. Select one: a. TRUE b. FALSE
b. FALSE
Direct materials are a conversion cost. Select one: a. TRUE b. FALSE
b. FALSE
If an investment's net present value is zero, then it's IRR must also be zero. Select one: a. TRUE b. FALSE
b. FALSE
Inventoriable costs using variable costing is appropriate for external reporting. Select one: a. TRUE b. FALSE
b. FALSE
The flexible overhead budget consists of fixed overhead only. Select one: a. TRUE b. FALSE
b. FALSE
To calculate the overhead volume variance actual overhead costs are required. Select one: a. TRUE b. FALSE
b. FALSE
Unless an addition to working capital is permanent, it should not be considered among the cash flows of a capital budget. Select one: a. TRUE b. FALSE
b. FALSE
Producing cans of evaporated milk would lend itself to a job order costing system. Select one: a. TRUE b. FALSE
b. FALSE Correct
Activity-based costing gives more information with respect to Select one: a. Direct materials b. Direct labor c. Overhead d. None of the above
c. Overhead
Costs that change in total with increased production are Select one: a. Fixed cost b. Variable costs c. Neither A nor B
b. Variable costs
Anticipated overhead is $100,000 and anticipated production is 100,000 units and there were 10,000 direct labor hours used . If overhead is applied using direct labor hours ,the overhead application rate is Select one: a. $1/DLH b. $2/DLH c. $10/DLH d. None of the above
c. $10/DLH
If the breakeven is 5000 units, the fixed costs are $20,000, the variable cost per unit is $1, what is the selling price? Select one: a. $3 b. $4 c. $5 d. None of the above
c. $5 Correct
The cash disbursements budget is done Select one: a. Prior to the cash receipts budget b. Prior to the budgeted income statement c. After the cash receipts budget d. None of the above
c. After the cash receipts budget
Which area houses the largest group of management accountants? Select one: a. Sales b. Marketing c. Auditing d. None of the above
c. Auditing
Activity-based costing identifies Select one: a. Overhead activity associated with manufacturing b. Cost drivers c. Both A and B d. None of the above
c. Both A and B
Process costing would be appropriate for Select one: a. Gallons of ice cream b. Cans of soup c. Both A and B d. Neither A nor B
c. Both A and B
The cost of goods sold budget requires assumptions regarding the levels of Select one: a. Work in process inventory b. Finished goods inventory c. Both A and B d. Neither A nor B
c. Both A and B
The professional affiliation for the management accountant is the Select one: a. AAA b. AICPA c. IMA d. None of the above
c. IMA
If the hurdle rate used to discount a stream of cash flows is raised, the IRR of the cash stream will Select one: a. Always increase b. Always decrease c. Not change d. Increase if the NPV is negative or decrease if the NPV is positive
c. Not change
What is the major advantage of using the present value index (PVI) instead of NPV or IRR for comparison of alternative investments? Select one: a. Analysts are more familiar with PVI b. PVI does a better job of measuring the time value of money. c. PVI accounts for the relative size of the initial investment d. None of the above
c. PVI accounts for the relative size of the initial investment
After the sales budget, the next budget produced is the Select one: a. Cost of goods sold budget b. Direct materials budget c. Production budget d. Budgeted balance sheet
c. Production budget
Budgeting begins with the Select one: a. Production budget b. Cost of goods sold budget c. Sales budget d. Direct materials budget
c. Sales budget
f anticipated overhead is $100,000 and anticipated production is 100,000 units, and the overhead application rate is based on direct labor hours, the overhead application rate per direct labor hour is Select one: a. $1/DLH b. $2/DLH c. Unable to tell from data given
c. Unable to tell from data given
If anticipated overhead is $100,000 and anticipated production is 100,000 units, the overhead application rate is Select one: a. $1/unit b. $2unit c. Unable to tell from information given
c. Unable to tell from information given
Which of the following items will be found in the balance sheet of a manufacturing company? Select one: a. Raw materials b. Work in process c. Finished goods d. All of the above
d. All of the above
The capital expenditures budget is a part of the Select one: a. Direct materials budget b. Direct labor budget c. Cost of goods sold budget d. None of the above
d. None of the above
Which of the following is not an inventoriable item? Select one: a. Direct materials b. Direct labor c. Overhead d. None of the above. All are inventoriable items.
d. None of the above. All are inventoriable items.