Management Past Exam PDF

1.1) Which of the following statements describe cost and financial accounting the best? a) The primary users of cost accounting are the investors, whereas the primary users of financial accounting are the managers. b) Cost accounting deals with product design, production, and marketing strategies, w...

1.1) Which of the following statements describe cost and financial accounting the best? a) The primary users of cost accounting are the investors, whereas the primary users of financial accounting are the managers. b) Cost accounting deals with product design, production, and marketing strategies, whereas financial accounting deals mainly with pricing of the products. c) Cost accounting measures only the financial information related to the costs of acquiring fixed assets in an organization, whereas financial accounting measures financial and nonfinancial information of a company's business transactions. d) Cost accounting measures information related to the costs of acquiring or using resources in an organization, whereas financial accounting measures a financial position of a company to investors, banks, and external parties. e) None of the above. 1.2) Concentrating on areas that need attention and neglecting areas that appear to be running smoothly is called ______. der impene deanie is e a) Variance analysis funwhat being aPlannedarepected,and it Gaismaof bulentwhich b) Management by exception is c) Management smoothing - d) Budget analysis e) None of the above 1.3) Which of the following cost items will remain constant if the level of cost- driver activity increases within the relevant range? a) Variable cost per unit b) Total variable costs c) Total fixed costs d) Variable cost per unit AND Total fixed costs e) Total costs f) Total variable costs, Total fixed costs, AND Total costs g) None of the above. 1.4) If you can work for $25,000 a year, but you decide to go to college instead, then the $25,000 represent ______. a) Sunk costs b) opportunity costs c) outlay costs d) none of the above e) misplaced costs 1.5) Each of the following statements are true regarding relevant information except? a) Past costs are helpful when making predictions but not relevant when making decisions. b) Different alternatives can be compared by examining differences in expected future revenues and expected total future costs. costs are c) Significant past investment amounts are relevant to decision making. past investment amounts also known as some ~ and can't d) Not all future revenues and expenses are relevant. cuts that have been alreadyincurred be e) None of the above. recovered changed. or for decision making because They are considered irrelevant They will not be affected by future decisions 1.6) Which of the following statements is TRUE? a) Budgeting provides an opportunity for managers to reevaluate existing activities and evaluate possible new activities. b) Budgeting compels managers to think ahead by formalizing their responsibilities for planning. c) Budgeting aids managers in communicating objectives to units and coordinating actions across the organization. d) Budgeting provides benchmarks to evaluate subsequent performance. e) All of the above. f) None of the above.  had no excess capacity, then thewould pay the total act of penducing the product" the company of inter 1.7) If a company has excess capacity, the most it would pay for buying a product that it currently produces (outsourcing) would be the ____? the level of production and will not be costs incurred regardless of a) total variable cost of producing the product - Fixed are saved by outsourcing. b) full cost of producing the product c) total cost of producing the product d) business function cost of the product e) All of the above. f) None of the above. 1.8) Which of the following statements is TRUE for ‘sell-or- process further decision's in joint costing? a) Joint costs incurred before the split-off point are relevant in deciding whether to process the product further. b) All separable costs in joint-cost allocations are incremental costs. c) Separable costs incurred before the split-off point are irrelevant in decision whether to process the product further. d) The cost difference between the alternatives of selling products or processing further is relevant. e) None of the above. When making the sell-or-process further decision in joint costing, the cost difference between selling the products at the split-off point and processing them further is Setthe a relevant factor. This cost difference includes the incremental costs incurred beyond the split-off point, such as additional processing costs or additional marketing expenses. Options (a), (b), and (c) are incorrect because they state that costs before the split-off point are either relevant or irrelevant. However, in the sell-or- process further decision, only costs incurred beyond the split-off point are considered. Decests: x method 1.9) Which of the following statements describes the ‘sequential method’ the best? Reciprocal a) it partially recognizes the services provided among support departments. b) it does not recognize the total services that support departments provide to each other.. Y X c) It is conceptually the most precise method. d) It partially recognizes the services provided among support departments and it does not recognize the total services that support departments provide to each other. e) It does not recognize the total services that support departments provide to each other and it is conceptually the most precise method. f) None of the above. Income is 1.10) If the unit level of inventory increases during an accounting period, then ________? a) less operating income will be reported under absorption costing than variable costing. Bod. =sales sales Equal lower aptthe Equel Prd> lower b) more operating income will be reported under absorption costing than variable costing. And a sales higher c) operating income will be the same under absorption costing and variable costing. ↳ because under absorptive casting, fixed manufacturing overhead is so it more units are produced spread produced, all units d) the exact effect on operating income cannot be determined. over ofwill be stood in then sold, a portion of the 7.runfucturing the ending inventory, which decreases the cost of goods sold e) None of the above. and subsequentially increases operating income. 1.11) A distinct feature of the FIFO process-costing method is that the __________? a) work done on beginning inventory before the current period is blended with the work done during the current period in the calculation of equivalent units b) work done on beginning inventory before the current period is kept separate from the work done during the current period in the calculation of equivalent units c) work done on ending inventory is kept separate from the work done during the current period in the calculation of equivalent units and is usually not included in the calculation d) FIFO process-costing method is only minimally different from the weighted-average process-costing method e) None of the above. Cost Flow: Under the FIFO method, it is assumed that the first items purchased or produced are the first ones to be sold. Cost Flow: The weighted average method considers all units available for sale during the period as one big pool or average. FIFO assigns costs based on the chronological order of acquisition, while the weighted average method calculates an average cost per unit.  1.12) WHO Corporation produces a part that is used in manufacturing of one of its products. The costs associated with the production of 10,000 units of this part are as follows: Direct materials $45,000 Direct labor $65,000; variable overhead costs $30,000; fixed overhead costs $70,000. Of the fixed overhead costs $30,000 is avoidable. A supplier has offered to sell 10,000 units of the same part to WHO Corporation for $18 per unit. Assuming there is no other use for the facilities, WHO should _____. cost of 10,000 units - D. Met 45,000 a) make the part, as this would save $3 per unit 65,000 D. Lab b) make the part, as this would save $1 per unit out o An - c) buy the part, as this would save the company $30,000 ToA 170,000 d) buy the part, as this would save the company $3 per unit e) None of the above Cret/urit = 1.13) Moto Inc. manufactures and sells scooters. A projected income statement for the expected sales volume of 100,000 scooters is as follows: Sales $7,500,000; variable costs $3,000,000; contribution margin $4,500,000; fixed costs $2,500,000 Moto Inc. is subject to a 40% tax rate. The units of scooters Moto. Inc must sell to achieve an after- tax profit of $1,500,000 is closest to: 1, 500, 7,500,000 wo profit-et+Fr_t=1111 target profit a) 66,666 3, so, wo b) 333,333 Units for desired a - c) 111,111 after tax contribution per unit 45 -magi 4,500,000 d) 142,857 e) None of the above. weite - zon/unit 1.14 For 2018, Franklin Manufacturing uses machine-hours as the only overhead cost-allocation base. The estimated manufacturing overhead costs are $340,000 and estimated machine hours are 40,000. The actual manufacturing overhead costs are $450,000 and actual machine hours are 50,000. What is the difference between the budgeted and the actual manufacturing overhead using job costing? (Round the final answer to the nearest cent.) 340,000 a) $2.75 Budgeted -= 8.5 (9-8 5) 0.50 = = b) $2.20 40,00 c) $0.50 d) $2.25 e) $0.75 450,000 29 Difference z LAcuOD- Budgeted CHD) Actual machine X hours f) $1.00 Actor - 50,000 g) $1.50 50,000 h) $2.00 8.5) x i) None of the above. =(9 = - - $25,000 med"I" => I - - estimated OHD Ste old cost move enated = hous = 2000: 8.5 /a 20,000 Stawetex Asterie under apprised CAD Applied or CHD over = Actual OHD - 450,000 -(8.5x 50,000) - 425,000 = S 25,000 - -> $250=$0.50 - 450,000 - 50,000 has  1.15) JB plc operates a standard marginal cost accounting system. Information relating to product J, which is made in one of the company departments, is given in the Table. we Standard marginal product cost per unit: Direct material 6 kg at $4 per kg Direct labor 1 hour at $7 per hour note Variable production overhead is $3.- Units of J produced are equal to $18,500. ni Direct materials purchased and used 113,500 which equals to $442,650 Direct labor: 17800 hours which costs 129,949 Variable production overhead incurred is 58,800 Fixed production overhead incurred $104,000 The direct material quantity variance for product J [in $] is closest to? a) 9750 b) 9800 mat.gty =(A0-59) SP c) 9850 variance d) 9900 e) 9950 =(113,500 111,000) x 4 - f) 10,000 - g) 10,050 undervoluble h) 10,100 =- 1000 is - i) none of the above 1.16) Based on the information provided in the above question, the labor rate variance for product J in $ is closest to: a) 4900 Labor rate Actual time (SR-AR) b) 5340 c) 5800 - d) 5110 variance e) 5550 = 17,800 (7-7.307 f) 5220 g) 5580 5540 unferrable - h) 5800 >- - 1.17) Base on the above question the direct material quantity variance for product J is __________ and the labor rate variance for Product J is ________. a) unfavorable/ unfavorable b) unfavorable/ favorable c) none of the above. d) favorable/favorable e) favorable/unfavorable 1.18) Consider the data stated in the Table for the satellite Assembly Division of Aero-France Opening work in progress (1 May) 8 units (Degree of completion: direct materials 90%, conversion costs 40%) Started in May 50 Units Completed during May 46 units Closing work in progress (31 May) 12 Units (Degree of completion; direct materials 60%, conversion costs 30%) The equivalent units of work done in the current period for direct materials are closest to? Opening 8 a) 53.2 units b) 58 units Completel 50 c) 46 units - d) 60.4 units ->100%46 e) None of the above M 46 Closing 12 -> 60%72 53.2 units - - 1. Single choice, 5 points per answer: 1.1) Management accounting is the process of supplying managers within an organization with relevant financial and nonfinancial information for: a) making decisions. b) allocating resources. c) monitoring, evaluating, and rewarding performance. d) all the above. 1.2) Management accounting has the following characteristics EXCEPT that it is not: a) current and future-oriented b) regulated by the government c) auditable d) disaggregate 1.3) The analytical role for management accounting emphasizes: a) planning and decision making b) acting c) monitoring and improving d) all the above 1. Single choice, 5 points per answer [Fortsetzung]: 1.4) In a job order costing system, the cost flow model moves costs through the accounts in which order? a) Raw materials, work-in-process, cost of goods sold, finished goods b) Finished goods, work-in-process, raw materials, cost of goods sold c) Raw materials, work-in-process, finished goods, cost of goods sold d) Work-in-process, raw materials, finished goods, cost of goods sold 1.5) Which of the following statements about job order costing systems is FALSE? a) A job order costing system is a method used for estimating product costs in firms that have several distinct products. b) A job order costing system estimates costs of manufacturing products for different jobs required for customer orders. c) A job order costing system relies on the concept of conversion costs. d) A job order costing system provides the means to estimate costs so that bids can be prepared. 1.6) Pat’s Paint Company (PPC) uses process costing to determine the costs of its various products. In October, PPC had 3,000 gallons of paint in work in process. The paint was 100% complete with respect to materials and 40% complete with respect to conversion. If the cost per equivalent unit of materials is $18 and the cost per equivalent unit of conversion is $130, then the cost of ending work in process is: Tutul % - 3000 Process a) $177,600. 1200 b) $210,000. units 3wo 56, - Er. - c) $411,600. EN costs 1300x 18) 54, t w 210, ouo - - d) $444,000. 1.7) The sequential method of allocating service department costs completely deals with the criticism that the direct method ignores services provided among service departments. the sequential method of allocating secure dept cast does notcompletely a) True address the criticism. b) False 1.8) The term that refers to costs that are not relevant to a decision is: a) marginal costs. b) cost driver. c) sunk costs. d) incremental costs. 1.9) Which of the following is FALSE? a) A product’s contribution margin per unit is the difference between its sales price per unit and variable production cost per unit. b) A product’s contribution margin ratio is the ratio of the product’s contribution margin per unit to its sales price per unit. c) A product’s contribution margin per unit is the difference between its sales price per unit and variable cost per unit. d) Both the contribution margin per unit and contribution margin ratio are useful in cost-volume- profit analysis. 1. Single choice, 5 points per answer [Fortsetzung]: 1.10) Aker Enterprises manufactures one product, a remote-control sailboat. The company has capacity to make 100,000 sailboats per year and estimates the following cost data for coming year: Variable cost per unit: $35 Total fixed costs: $975,000 What price will Aker have to charge per sailboat in order to break even if it sells 100,000 sailboats for the year? Be it selling price 35+9.75 = it - a) $25.25 575 = b) $35.00 100,000 - c) $44.75 d) $9.75 infuit 9.75= 1.11) Which of the following should NOT be used in a linear program to choose quantities of specified products to produce and sell in order to maximize profit subject to resource constraints? prout prdui 2x + 3y = 0, y >= 0 since we can't produce negative c) Fixed cost per unit for each specified product. quantities of a product. d) Variable selling cost per unit for each specified product. As you can see, the fixed cost per unit for each product isn't factored into our model since it doesn't change based on how many units we decide to produce. It is a sunk cost and won't affect our decision making in a linear program. 1.12) What is always the question to ask to determine if revenues or costs are relevant? a) What is the time frame for achieving results? will change based on the are those that relevent cuts or revenues b) What difference will a particular action make? - we talk. action that decision or c) Who will be responsible? d) How much will it cost? 1.13) The concept of outsourcing services to countries with lower labor costs is known as with lower labour costs a) opportunity cost. a to foreign country business activities or processes certain skills or resources b) offshoring. relocating gain access specialized to - adventure of cast differentists, -to take c) insourcing. seve d) international outsourcing. to external ampanies or or services I specific out take, processes services etc) contracting technology practice of support, information merider in a different country. Gastower 1.14) Troy Instruments uses ten units of Part Number S1798 each month in the production of scientific equipment. The unit cost to manufacturing one unit of S1798 is presented below. 400D Direct materials $4,000 200 Materials handling $400 (10% of direct materials cost) 6008 Direct manufacturing labor $6,000 3008 Indirect manufacturing $12,000 (200% of direct labor) 18,000x1Y 3000 - - = 13,400 Total manufacturing cost $22,400 - / variable Materials handling represents the direct variable costs of the Receiving Department that are applied to all direct materials and purchased components on the basis of their cost. This is a separate charge in addition to indirect manufacturing cost. Troy’s annual indirect manufacturing cost budget is one-fourth variable and three-fourths fixed. Duncan Supply, one of Troy’s reliable vendors, has offered to supply Part Number S1798 at a unit price of $17,000. If Troy purchases the S1798 units from Duncan, the capacity Troy used e to manufacture these parts would be idle. Should Troy decide to purchase the parts from - Duncan, the unit cost of S1798 would be? a) decrease by $3,700. b) decrease by $5,600. c) increase by $3,600. d) increase by $5,300. 1.15) Which of the following is not a reason for the performance evaluation model to differ from the decision model? a) The use of different time frames: one being an annual basis, the other a period of several years. b) The accounting systems enable each decision to be tracked separately. c) The accrual accounting method incorporates irrelevant costs. d) Top management is rarely aware of particular desirable alternatives that were not chosen by subordinate managers. 1.16) All of the following are concerns about target costing EXCEPT: a) conflicts may arise within organizations. E b) employees may experience burnout due to the pressures of meeting target costs. c) development time may increase. positive the is the at all, this d) cross-functional product teams guide the target costing process. concern - This is not espectof target costing. Target costing is a system in which the selling price of a product is set first by assessing the market, and then the desired profit is subtracted to determine the target cost. A cross-functional team, including members from design, production, marketing, and other relevant departments, then collaboratively work to ensure the product can be produced at this target cost. This is generally viewed as a positive aspect of the target costing process, as it encourages cooperation and a comprehensive understanding of the product lifecycle across different functions of the organization. 1.17) Which of the following stages is NOT part of the total life cycle costing approach? designed and e prototype ponduet is a) Research, development, and engineering stage - (Thisiswherethe is actually (when product produced) b) Manufacturing stage - c) Research, development, and post-manufacturing stage after its sold, d) Post-sale service and disposal stage itsrelated servicing the product to - laws associated with disparing of and any cats (orverences) at the end of useful its life). the product 1.18) Even though activity-based costing is a valuable measurement and management tool, it can NOT be applied to environmental costs. a) True environmental such impact and menage the costs associatedwith better understand b) False ABG can control, and every consumption. management, pollution - as ate 1.19) Which of the following is FALSE about the breakeven time (BET) metric for the product development process? a) BET equals fixed costs divided by contribution margin per unit. b) Computing BET requires tracking the entire cost of the design and development process must be tracked. c) BET stresses profitability. d) Use of BET for performance evaluation encourages collaboration and integration across organizational functions. The use of breakeven time (BET) for the product development process does not necessarily encourage collaboration and integration across organizational functions. The BET metric primarily focuses on determining the amount of time it takes for a product to reach the breakeven point, where total revenue equals total costs. It is a financial measure used to assess the financial viability and time required to cover costs for a product. While collaboration and integration across organizational functions are crucial aspects of successful product development, the BET metric itself does not directly promote or incentivize collaboration. Collaboration and integration typically involve cross-functional teamwork, effective communication, and coordination among different departments or teams involved in the product development process. 00:47 Institute of Management, Accounting and Finance Prof. Dr. Rainer Lueg Chair of Managerial Accounting Management Accounting Note: 1. This exam has a duration of 60 minutes. You can reach a maximum of 95 points. Organize your time accordingly! 2. Permissible aid: non-programmable calculator, ruler and pen. 3. Only distributed paper may be used. 4. The test has to be handed back completely with all pages in the correct order. We wish you the best success! 1 Single choice, 5 points per answer 1.1 Management accounting is the process of supplying managers within an organization with relevant financial and nonfinancial information for: making decisions. allocating resources. monitoring, evaluating, and rewarding performance. all the above. 1.2 Management accounting has the following characteristics EXCEPT that it is not: current- and future-oriented. regulated by the government. auditable. disaggregate. 1.3 The analytical role for management accounting emphasizes: planning and decision making. acting. monitoring and improving. all the above. 1.4 In a job order costing system, the cost flow model moves costs through the accounts in which order? Raw materials, work-in-process, cost of goods sold, finished goods Finished goods, work-in-process, raw materials, cost of goods sold Raw materials, work-in-process, finished goods, cost of goods sold Work-in-process, raw materials, finished goods, cost of goods sold 1.5 Which of the following statements about job order costing systems is FALSE? A job order costing system is a method used for estimating product costs in firms that have several distinct products. A job order costing system estimates costs of manufacturing products for different jobs required for customer orders. A job order costing system relies on the concept of conversion costs. A job order costing system provides the means to estimate costs so that bids can be prepared. 1.6 Pat’s Paint Company (PPC) uses process costing to determine the costs of its various products. In October, PPC had 3,000 gallons of paint in work in process. The paint was 100% complete with respect to materials and 40% complete with respect to conversion. If the cost per equivalent unit of materials is $18 and the cost per equivalent unit of conversion is $130, then the cost of ending work in process is: $177,600. $210,000. $411,600. $444,000. 1.7 The sequential method of allocating service department costs completely deals with the criticism that the direct method ignores services provided among service departments. True False 1.8 The term that refers to costs that are not relevant to a decision is: marginal costs. cost driver. sunk costs. incremental costs. 1.9 Which of the following is FALSE? A product’s contribution margin per unit is the difference between its sales price per unit and variable production cost per unit. i. A product’s contribution margin ratio is the ratio of the product’s contribution margin per unit to its sales price per unit. A product’s contribution margin per unit is the difference between its sales price per unit and variable cost per unit. Both the contribution margin per unit and contribution margin ratio are useful in cost- volume-profit analysis. 1.10 Aker Enterprises manufactures one product, a remote-control sailboat. The company has capacity to make 100,000 sailboats per year and estimates the following cost data for coming year: Variable cost per unit: $35 Total fixed costs: $975,000 What price will Aker have to charge per sailboat in order to break even if it sells 100,000 sailboats for the year? $25.25 $35.00 $44.75 $9.75 1.11 Which of the following should NOT be used in a linear program to choose quantities of specified products to produce and sell in order to maximize profit subject to resource constraints? The maximum quantity available of each constrained resource. Variable production cost per unit for each specified product. Fixed cost per unit for each specified product. Variable selling cost per unit for each specified product. 1.12 What is always the question to ask to determine if revenues or costs are relevant? What is the time frame for achieving results? What difference will a particular action make? Who will be responsible? How much will it cost? 1.13 The concept of outsourcing services to countries with lower labor costs is known as opportunity cost. offshoring. insourcing. international outsourcing. 1.14 Troy Instruments uses ten units of Part Number S1798 each month in the production of scientific equipment. The unit cost to manufacturing one unit of S1798 is presented below. Direct materials $4,000 Materials handling $400 (10% of direct materials cost) Direct manufacturing labor $6,000 Indirect manufacturing $12,000 (200% of direct labor) Total manufacturing cost $22,400 Materials handling represents the direct variable costs of the Receiving Department that are applied to all direct materials and purchased components on the basis of their cost. This is a separate charge in addition to indirect manufacturing cost. Troy’s annual indirect manufacturing cost budget is one- fourth variable and three-fourths fixed. Duncan Supply, one of Troy’s reliable vendors, has offered to supply Part Number S1798 at a unit price of $17,000. If Troy purchases the S1798 units from Duncan, the capacity Troy used to manufacture these parts would be idle. Should Troy decide to purchase the parts from Duncan, the unit cost of S1798 would decrease by $3,700. decrease by $5,600. increase by $3,600. increase by $5,300. 1.15 Which of the following is not a reason for the performance evaluation model to differ from the decision model? The use of different time frames: one being an annual basis, the other a period of several years. The accounting systems enable each decision to be tracked separately. The accrual accounting method incorporates irrelevant costs. Top management is rarely aware of particular desirable alternatives that were not chosen by subordinate managers. 1.16 All of the following are concerns about target costing EXCEPT: conflicts may arise within organizations. employees may experience burnout due to the pressures of meeting target costs. development time may increase. cross-functional product teams guide the target costing process. 1.17 Which of the following stages is NOT part of the total life cycle costing approach? Research, development, and engineering stage Manufacturing stage Research, development, and post- manufacturing stage Post-sale service and disposal stage 1.18 Even though activity-based costing is a valuable measurement and management tool, it can NOT be applied to environmental costs True False 1.19 Which of the following is FALSE about the breakeven time (BET) metric for the product development process? BET equals fixed costs divided by contribution margin per unit. Computing BET requires tracking the entire cost of the design and development process must be tracked. BET stresses profitability. Use of BET for performance evaluation encourages collaboration and integration across organizational functions. Absenden Lizenziert an Leuphana Universität Lüneburg - EvaExam - EvaSys V8.0 (2201) - Copyright © 2019 Electric Paper Evaluationssysteme GmbH. Alle Rechte vorbehalten.  MUSTER Prüfungsbogen: 0 EvaExam Sustainable Management Accounting - 20.07.2020 Institute of Management, Accounting and Finance Prof. Dr. Rainer Lueg Chair of Managerial Chair of Managerial Accounting Accounting Management Management Accounting Accounting Bitte so markieren: Bitte verwenden Sie einen Kugelschreiber oder nicht zu starken Filzstift. Dieser Fragebogen wird maschinell erfasst. Korrektur: Bitte beachten Sie im Interesse einer optimalen Datenerfassung die links gegebenen Hinweise beim Ausfüllen. Prüfungsteilnehmer-ID für den Prüfungsbogen Nr.: 0: Please fill in your enrolment number and name (filling in name is voluntary) 1 Prename:______________________ 2 3 4 Surname:______________________ 5 6 For correct identification of the exam, please insert the digits of 7 your enrolment number carefully in the applicable boxes. All pages 8 are fully individual and cannot be exchanged with other exams. 9 0 Note: 1. This exam has a duration of 60 minutes. You can reach a maximum of 95 points. Organize your time accordingly! 2. Permissible aid: non-programmable calculator, ruler and pen. 3. Only distributed paper may be used. 4. The test has to be handed back completely with all pages in the correct order. We wish you the best success! 1. Single choice, 5 points per answer 1.1 I confirm that I am healthy and that I am capable of participating in the exam. a. Yes ÷ b. No 1.2 I confirm that I only use permissable aids (non-programmable calculator, pen, additional sheets) during the completion of this exam. a. Yes b. No 1.3 Managers use management accounting information primarily to a. help external users such as investors, banks, regulators, and suppliers. b. communicate a firm's financial position to investors, banks, regulators, and other outside parties. c. ensure that financial statements are consistent with the SEC rules. d. communicate, develop, and implement strategies. 1.4 The primary user of management accounting information is a(n) ________. a. the controller b. a shareholder evaluating a stock investment c. bondholder d. external regulator F19469U0P1PL0V0 09.07.2020, Seite 1/5 MUSTER  MUSTER Prüfungsbogen: 0 EvaExam Sustainable Management Accounting - 20.07.2020 1. Single choice, 5 points per answer [Fortsetzung] 1.5 Which of the following differentiates cost accounting and financial accounting? a. The primary users of cost accounting are the investors, whereas the primary users of financial accounting are the managers. b. Cost accounting deals with product design, production, and marketing strategies, whereas financial accounting deals mainly with pricing of the products. c. Cost accounting measures only the financial information related to the costs of acquiring fixed assets in an organization, whereas financial accounting measures financial and nonfinancial information of a company's business transactions. ✗ d. Cost accounting measures information related to the costs of acquiring or using resources in an organization, whereas financial accounting measures a financial position of a company to investors, banks, and external parties. 1.6 A manufacturing plant produces two product lines: golf and soccer equipment. An example of a direct cost for the golf equipment line is a. beverages provided daily in the plant break room for the staff of the entire plant. ÷ b. salaries of the clerical staff that work in the company administrative offices. c. overheads incurred in producing both golf and soccer equipment. d. monthly lease payments for a specialized piece of equipment needed to manufacture the golf driver. 1.7 ACME produces 444 units of PX7 with 103 EUR of budgeted variable cost per unit. ACME intends to increase production to 445 units, which lays within the relevant range of the specified cost function. The budgeted variable cost per unit will be a. more than 103 EUR. b. still 103 EUR. c. less than 103 EUR. d. the result is not reasonably predictable based on the information provided. 1.8 From a micro-economic perspective, sunk costs are relevant for decision-making. a. True. b. False : 1.9 Which of the following identifies an estimated price customers are willing to pay and then computes the cost to be achieved to earn the desired profit? a. Cost-plus pricing b. Target costing 1.10 In Management Accounting, "joint cost" are a. a medical term that describes the cost of surgery for a hip replacement. b. a cultural reference to Jenji Kohan's Emmy-winning TV series "Weeds", starring Mary-Louise Parker. ✗ c. the costs of a production process that yields multiple products simultaneously UNTIL they reach their split-off point. d. all costs incurred AFTER the split-off point in the production process, where formally joint products got separated into individual products. 1.11 Which of the following is true of indirect costs? a. Indirect costs are always considered sunk costs. b. All indirect costs are included in cost of goods sold. c. Indirect costs always vary in direct proportion to the level of production. ✗ d. Indirect costs cannot be traced to a particular cost object in an economically feasible way. F19469U0P2PL0V0 09.07.2020, Seite 2/5 MUSTER  MUSTER Prüfungsbogen: 0 EvaExam Sustainable Management Accounting - 20.07.2020 1. Single choice, 5 points per answer [Fortsetzung] 1.12 The cost-allocation base is a systematic way to link an indirect cost or group of indirect costs to cost objects. ✗ a. True. b. False 1.13 ACME Engine Company manufactures part AC2255 used in several of its engine models. Monthly production costs [in EUR] for 1,190 units are as follows: Direct materials 47,500 EUR; direct labor 13,500 EUR; variable overhead costs 31,500 EUR; fixed overhead costs 21,000 EUR (so a total costs of 113,500 EUR). 8% of the fixed overhead costs will no longer be incurred if the company purchases AC2255 from the outside supplier. ACME Engine Company has the option of purchasing the part from an outside supplier at 96.75 EUR per unit. If the company accepts the offer from the outside supplier, the monthly avoidable costs (costs that will no longer be incurred) total [in EUR] are ✗ a. 94,180.00 b. 89,000.00 DM-97,5002 DL : 13,500 FOH.lt/OOo.QO8 31,5005%500=1680 c. 90,200.00 d. 114,180.00 OH : 91,500+1680 1.14 Tally Corp. sells software during the recruiting seasons. During the current year, 14,000 software packages were sold resulting in $460,000 of sales revenue, $110,000 of variable costs, and $50,000 of fixed costs. Contribution margin per software is ________. 14000 a. $32.86 ( M : 350,000 ✗ b. $25.00 c. $29.29 d. $7.86 1.15 Orion Company sells several products. Information of average revenue and costs is as follows: Selling price per unit $23.00 Variable costs per unit: Direct material $4.00 Direct manufacturing labor $1.60 Manufacturing overhead $0.40 Selling costs $2.10 Annual fixed costs: $100,000.00 The company sells 12,000 units at the end of the year. The contribution margin per unit is ________. a. $16.50 ✗ b. $14.90 c. $18.60 d. $19.00 F19469U0P3PL0V0 09.07.2020, Seite 3/5 MUSTER  MUSTER Prüfungsbogen: 0 EvaExam Sustainable Management Accounting - 20.07.2020 1. Single choice, 5 points per answer [Fortsetzung] 1.16 John's 8-year-old Chevrolet Trail Blazer requires repairs estimated at $10,000 to make it road / worthy again. His wife, Sherry, suggested that he should buy a 5-year-old used Jeep Grand Cherokee instead for $10,000 cash. Sherry estimated the following costs for the two cars: Cars Trail Blazer Grand Cherokee Acquisition cost $25,000.00 $10,000.00 Repairs $10,000.00 — Annual operating costs $2,780.00 $1,800.00 (Gas, maintenance, insurance) The cost NOT relevant for this decision is the ________. a. acquisition cost of the Trail Blazer : b. acquisition cost of the Grand Cherokee c. repairs to the Trail Blazer d. annual operating costs of the Grand Cherokee 1.17 Which of the following is true of relevant information? a. All fixed costs are relevant. b. All Future revenues and expenses are relevant. c. Information on Future developments. d. All fixed costs are not relevant. 1.18 One-time-only special orders should only be accepted if ________. ✗ a. incremental revenues exceed incremental costs b. differential revenues exceed variable costs c. incremental revenues exceed fixed costs d. total revenues exceed total costs 1.19 LOOKY delivered 90 custom-designed cameras to its customer REC. The following cost information was compiled in connection with this order: Direct Materials Used for Part A51: 1 unit costing 53 EUR per camera; and Part B52: 2 units per camera costing each 54 EUR. Direct Labor used was for assembly: 2 hours per camera at the rate of 22 EUR per hour, and for inspection: 0.75 hour per camera at the rate of 27 EUR per hour. In addition, the company applies manufacturing overhead costs to jobs at the rate of 16 EUR per direct labor hour. The selling price for each camera is 455 EUR. What is the gross margin per unit [in Euro]? a. 184.75 90 b. 185.00 c. 185.25 d. 185.50 53 49 ✗ e. 185.75 f. 186.00 108 20,25 g. 186.25 h. 186.50 i. 186.75 99 j. 187.00 k. None of the above. Ass 769,2s - F19469U0P4PL0V0 09.07.2020, Seite 4/5 MUSTER  MUSTER Prüfungsbogen: 0 EvaExam Sustainable Management Accounting - 20.07.2020 1. Single choice, 5 points per answer [Fortsetzung] 1.20 The division SEQ uses the sequential method to allocate costs from its service departments (S1 and S2) to its production departments (P3 and P4). Direct costs in monetary units are as follows: S1 = 400; S2 = 200; P3 = 350; P4 = 250. S1 provides services to S2 (25% of S1’s direct costs), P3 (35%) and P4 (40%). S2 provides services to P3 (24%) and P4 (76%). The total cost of P3 are a. 555.00 b. 556.00 c. 557.00 ⑤ ⑤ " d. 558.00 e. 559.00 f. 560.00 Ja } IH g. 561.00 ✗ h. 562.00 i. 563.00 P③ ④ j. 564.00 k. None of the above. 3501-1901-72 250 1.21 SCOTCH expects to sell 6,875 units of PIMPLE (unit sales price 85 EUR; variable cost 72 EUR) and 3,125 units of BLOTCH (unit sales price 35 EUR; variable cost 28 EUR). Fixed costs are 6,922 EUR. Assuming a constant sales mix and that the products can only be sold as a full piece, how many units of PIMPLE does SCOTCH need to sell to break even [rounded to the closest EUR]? a. 422.00 b. 423.00 c. 424.00 68,7%6875 31,2%3.725 d. 425.00 e. 426.00 f. 427.00 Uh:B (Mit + g. 428.00 h. 429.00 i. 430.00 8,937531112s { 2,1875 j. 431.00 k. None of the above. 11,1255--6922 ( ✗ = 64.20.016875 F19469U0P5PL0V0 09.07.2020, Seite 5/5 MUSTER  00:08 Institute of Management, Accounting and Finance Prof. Dr. Rainer Lueg Chair of Managerial Accounting Management Accounting 1 Single Choice; 5 points per question Note: 1. This exam has a duration of 90 minutes. You can reach a maximum of 95 points. Organize your time accordingly! 2. Permissible aid: non-programmable calculator, ruler and pen. 3. Only distributed paper may be used. 4. The test has to be handed back completely with all pages in the correct order. We wish you the best success! 1.1 Which of the following statements describe cost and The primary users of cost accounting are the investors, whereas the primary users of financial financial accounting the best? accounting are the managers. Cost accounting deals with product design, production, and marketing strategies, whereas financial accounting deals mainly with pricing of the products. Cost accounting measures only the financial information related to the costs of acquiring fixed assets in an organization, whereas financial accounting measures financial and nonfinancial information of a company's business transactions. Cost accounting measures information related to the costs of acquiring or using resources in an organization, whereas financial accounting measures a financial position of a company to investors, banks, and external parties. None of the above. 1.2 Concentrating on areas that need attention and neglecting Variance analysis Management by exception areas that appear to be running smoothly is called ______. Management smoothing Budget analysis None of the above. 1.3 Which of the following cost items will remain constant, if Variable cost per unit the level of cost-driver activity increases within the relevant Total variable costs range? Total fixed costs Variable cost per unit AND Total fixed costs Total costs Total variable costs, Total fixed costs, AND Total costs None of the above. 1.4 If you can work for $25,000 a year, but you decide to go to Sunk costs Outlay costs Misplaced costs college instead, then the $25,000 represent _____. Opportunity costs None of the above. 1.5 Each of the following statements are TRUE regarding Past costs are helpful when making predictions but not relevant when making decisions. relevant information EXCEPT: Different alternatives can be compared by examining differences in expected future revenues and expected total future costs. Significant past investment amounts are relevant to decision making. Not all future revenues and expenses are relevant. None of the above. 1.6 Which of the following statements is TRUE? Budgeting provides an opportunity for managers to reevaluate existing activities and evaluate possible new activities. Budgeting compels managers to think ahead by formalizing their responsibilities for planning. Budgeting aids managers in communicating objectives to units and coordinating actions across the organization. Budgeting provides benchmarks to evaluate subsequent performance. All of the above. None of the above. 1.7 If a company has excess capacity, the most it would pay for total variable cost of producing the product buying a product that it currently produces (“outsourcing”) full cost of producing the product would be the ________. total cost of producing the product business function cost of the product All of the above. None of the above. 1.8 Which of the following statements is TRUE for ‘sell-or- Joint costs incurred before the split-off point are relevant in deciding whether to process the product process-further decisions’ in joint costing? further. All separable costs in joint-cost allocations are incremental costs. Separable costs incurred before the split-off point are irrelevant in deciding whether to process the product further. The cost difference between the alternatives of selling products or processing further is relevant. None of the above. 1.9 Which of the following statements describes the It partially recognizes the services provided among support departments. ‘sequential method’ the best? = It does not recognize the total services that support departments provide to each other.  00:08 - It is conceptually the most precise method. It partially recognizes the services provided among support departments AND it does not recognize the total services that support departments provide to each other. It does not recognize the total services that support departments provide to each other AND it is conceptually the most precise method. None of the above. 1.10 If the unit level of inventory increases during an accounting less operating income will be reported under absorption costing than variable costing period, then ________. more operating income will be reported under absorption costing than variable costing operating income will be the same under absorption costing and variable costing Production > Sales inventory Wigner the exact effect on operating income cannot be determined None of the above. 1.11 A distinct feature of the FIFO process-costing method is work done - on beginning inventory before the current period is blended with the work done during the that the ________. current period in the calculation of equivalent units work done on beginning inventory before the current period is kept separate from the work done during the current period in the calculation of equivalent units work done on ending inventory is kept separate from the work done during the current period in the calculation of equivalent units and is usually not included in the calculation FIFO process-costing method is only minimally different from the weighted-average process-costing method None of the above. 1.12 WHO Corporation produces a part that is used in manufacturing make the part, as this would save $3 per unit of one of its products. The costs associated with the production make the part, as this would save $1 per unit of 10,000 units of this part are as follows: Direct materials $45,000; direct labor $65,000; variable overhead costs $30,000; buy the part, as this would save the company $30,000 fixed overhead costs $70,000. Of the fixed overhead costs $30,000 is avoidable. buy the part, as this would save the company $3 per unit None of the above. A supplier has offered to sell 10,000 units of the same part to WHO Corporation for $18 per unit. Assuming there is no other use for the facilities, WHO should _____. 1.13 Moto, Inc. manufactures and sells scooters. A projected income 66,666 333,333 111,111 statement for the expected sales volume of 100,000 scooters is 142,857 None of the above. as follows: Sales $7,500,000; variable costs $3,000,000, contribution margin $4,500,000; fixed costs $2,500,000. Moto, Inc. is subject to a 40% tax rate. The units of scooters Moto, Inc must sell to achieve an after-tax profit of $1,500,000 is closest to: 1.14 For 2018, Franklin Manufacturing uses machine-hours as the $2.75 $2.20 $0.50 only overhead cost-allocation base. The estimated $2.25 $0.75 $1.00 manufacturing overhead costs are $340,000 and estimated machine hours are 40,000. The actual manufacturing overhead $1.50 $2.00 None of the above. costs are $450,000 and actual machine hours are 50,000. What is the difference between the budgeted and the actual manufacturing overhead using job costing? (Round the final answer to the nearest cent.) 1.15 JB plc operates a standard marginal cost accounting system. Information relating to product J, which is made in one of the company departments, is given in the Table. The direct material quantity variance for product J [in ￡ ] is closest to: 9,750 9,800 9,850 9,900 9,950 10,000 10,050 10,100 None of the above. 1.16 Based on the information provided in 1.15, the labor rate 4,900 5,110 5,220 variance for product J [in ￡ ] is closest to: 5,340 5,550 5,580 5,800 None of the above.  00:08 on the information provided in 1.15, the direct 1.17 Based unfavorable / unfavorable favorable / favorable material quantity variance for Product J [calculated in 1.15] unfavorable / favorable favorable / unfavorable is ______ and the labor rate variance for Product J [calculated in 1.16] is None of the above. 1.18 Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $370,000 are allocated on the basis of budgeted warehouse-hours. Data Center Department costs of $200,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $142,500 and $171,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as stated in the Table. Using the sequential (step-down) method, if the service department with the highest percentage of interdepartmental support service is allocated first, the amount of Data Center Department cost that will be allocated to Department Music is closest to (Round intermediary calculations to three decimal places.): 590 > Dateecenter war 370,000 268,432.60188 Music 123,950.2873 $144,992 $91,979 $123,487 $108,021 None of the above 1.19 Consider the data stated in the Table for the satellite Assembly Division of Aéro-France www.3190 The equivalent units of work done in the current period for direct materials are closest to: 0,18495L Data : 1870 116,000 94535,2399ft 108,892 108,8944706 53.2 units 58 units 46 units 60.4 units None of the above. 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