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.