Managerial Accounting (20 MCQs)_Version 1

Managerial Accounting (20 MCQs)
Version 1

1. The Institute of Management Accountants (IMA):
is a professional organization of management accountants
is a professional organization of financial accountants
issues standards for management accounting
issues standards for financial accounting

2. The five step framework used to guide Six Sigma improvement efforts includes all of the following EXCEPT
Analyze.
Control.
Digitize.
Measure.

3. ____________ is an example of a line position.
Controller for a merchandising company
Chief financial officer of a merchandising company
Store manager for Best Buy
Human resources manager for a community college

4. Which of the following is NOT a period cost?
Monthly depreciation of the equipment in a fitness room used by factory workers.
Salary of a billing clerk.
Insurance on a company showroom, where current and potential customers can view new products.
Cost of a seminar concerning tax law updates that was attended by the company's controller.

5. A staff position
related directly to the carrying out of the basic objectives of the organization.
is supportive in nature, providing service and assistance to other parts of the organization.
is superior in authority to a line position.
none of these.

6. A daily report on the number of quality units assembled by each employee is information MOST useful to:
a front-line assembly worker
the accounting department
the chief executive officer
the personnel department

7. Which of the following is NOT one of the Institute of Management Accountants' five Standards of Ethical Conduct?
Competence
Confidentiality
Independence
Integrity

8. Nonmanufacturing costs
include only fixed costs
seldom influence financial success or failure
include the cost of selling, distribution, and after-sales costs for customers
are considered by GAAP to be an element of product costs

9. Financial accounting:
focuses on the future and includes activities such as preparing next year's operating budget
must comply with GAAP (generally accepted accounting principles)
reports include detailed information on the various operating segments of the business such as product lines or departments
is prepared for the use of department heads and other employees

10. Which of the following descriptors refer to management accounting information?
It is verifiable and reliable.
It is driven by rules.
It is prepared for shareholders.
It provides reasonable and timely estimates.

11. The accounting process is constrained by mandated reporting requirements by all of the following organizations EXCEPT the:
Internal Revenue Service (IRS)
Institute of Management Accountants (IMA)
Financial Accounting Standards Board (FASB)
Securities and Exchange Commission (SEC) for companies that are publicly traded

12. The one cost that would be classified as part of both prime cost and conversion cost would be:
indirect material
direct labor
direct material
indirect labor

13. A __________position in an organization is directly related to the achievement of the organization's basic objectives.
line
management
staff
none of these.

14. Which of the following statements about products is true?
Product costs are deducted from revenue when the production process is completed.
Product costs are deducted from revenue as expenditures are made.
Product costs associated with unsold finished goods and work in process appear on the balance sheet as assets.
Product costs appear on financial statements only when products are sold.

15. The Institute of Management Accountants (IMA):
is a professional organization of management accountants
is a professional organization of financial accountants
issues standards for management accounting
Both a and c are correct.

16. Shown below are a number of costs incurred last year at Mecca Publishing Co., a manufacturer of elementary school textbooks:
Solvents and cleaners used by the custodians to clean the textbook printing presses $ 500
Depreciation on the automobiles used by sales representatives $4,200
Fire insurance on factory building $2,000
Shipping costs on textbooks sold $3,700
What is the total of the manufacturing overhead costs above?
$500
$2,500
$6,200
$6,700

17. The information below relates to Derby Manufacturing Company's operations for a recent month. (Assume that all raw materials are direct materials.):
Purchases of raw materials $ 91,000
Direct labor cost $122,000
Selling costs (total) $ 42,000
Administrative costs (total) $ 56,000
Manufacturing overhead costs (total) $340,000
Raw materials inventory, beginning $ 22,000
Work in process inventory, beginning $ 27,000
Finished goods inventory, beginning $ 42,000
Raw materials inventory, ending $ 7,000
Work in process inventory, ending $ 35,000
Finished goods inventory, ending $ 15,000
What was Derby's cost of goods manufactured for the month?
$545,000
$560,000
$568,000
$587,000

18. The person MOST likely to use ONLY financial accounting information is a
factory shift supervisor
vice president of operations
current shareholder
department manager

19. Which of the following is an example of a period cost? (Points : 2)
Fabric used to produce men's pants.
Advertising cost for a new product campaign.
Factory supervisor's salary.
Monthly depreciation of production equipment.

20. The cost of inventory reported on the balance sheet may include the cost of all the following EXCEPT:
advertising
wages of the plant supervisor
depreciation of the factory equipment
parts used in the manufacturing process
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