Question 1

Managerial accounting includes the planning function.Which of the following items would be part of the planning function of a business's managerial accounting?

Accepted Answer

A)  Comparing actual performance to previously budgeted amounts 
B)  Evaluating results of operations 
C)  Creating detailed budgets 
D)  Implementing operational plans

Question 2

When a company is preparing a budgeted cash flow statement and it wishes to calculate the payments to suppliers for purchases of inventory,it should refer to which of the following?

Accepted Answer

A)  Budgeted cash payments for purchases 
B)  Budgeted balance sheet 
C)  Budgeted cash collections 
D)  Sales budget

Question 3

Kapital Ltd has prepared the operating budget for the first quarter of 2017.The company forecasts sales of $50,000 in January,$60,000 in February and $70,000 in March.Variable and fixed expenses are as follows:
Variable: electricity cost (40% of sales)
Miscellaneous expenses: (10% of sales)
Fixed: salary expense: $8000 per month
Rent expense: $4000 per month
Depreciation expense: $1200 per month
Electricity cost/fixed portion: $800 per month
Miscellaneous expenses/fixed portion: $1200 per month
Calculate total operating expenses for the month of January.

Accepted Answer

A)  $40,200 
B)  $25,000 
C)  $50,200 
D)  $45,200

Question 4

Caplico Company has prepared the following sales budget:
$$\begin{array} { | l | l | } 
\hline \text { Month } &  { \text { Budgeted sales } } \
\hline \text { March } & \$ 500,000 \
\hline \text { April } & 190,000 \
\hline \text { May } & 248,000 \
\hline \text { June } & 233,000 \
\hline
\end{array}$$
Cost of sales is budgeted at 50% of sales and the inventory at the end of February was $34,000.Desired inventory levels at the end of each month are 10% of the next month's cost of sales.What is the desired beginning inventory on 1 June?

Accepted Answer

A)  $11,650 
B)  $23,300 
C)  $12,400 
D)  $112,000

Question 5

The following information was obtained from Fizz Company:
$$\begin{array} { | l | l | } 
\hline \text { Advertising costs } & \$ 9100 \
\hline \text { Indirect labour } & 3600 \
\hline \text { CEO's salary } & 61,000 \
\hline \text { Direct labour } & 40,000 \
\hline \text { Indirect materials } & 5000 \
\hline \text { Direct materials used } & 60,000 \
\hline \text { Factory electricity and gas } & 520 \
\hline \text { Factory janitorial costs } & 1800 \
\hline \text { Manufacturing equipment depreciation } & 1200 \
\hline \text { Delivery vehicle depreciation } & 1700 \
\hline \text { Administrative wages and salaries } & 20,000 \
\hline
\end{array}$$
Calculate Fizz's total product costs.

Accepted Answer

A)  $110,600 
B)  $114,120 
C)  $100,000 
D)  $91,800

Question 6

A company has prepared the operational budget and the cash budget and is now preparing the budgeted balance sheet.To provide the balance for the Cash account,which document should be used?

Accepted Answer

A)  Cash budget 
B)  Sales budget 
C)  Inventory, purchases and cost of sales budget 
D)  Budgeted income statement

Question 7

Management is accountable to its suppliers and vendors in which of the following ways?

Accepted Answer

A)  Repaying loans in a timely manner 
B)  Providing a return on the stakeholders' investment 
C)  Making timely payments and complying with contract terms 
D)  Providing products to customers that are safe and free of defects

Question 8

The wages and benefits of the factory cleaners are included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 9

Indirect materials costs like lubricants and cleaning fluids are included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 10

Repair and maintenance costs of vehicles used to deliver products to the customers are included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 11

Budgeted financial statements are financial statements based on budgeted amounts rather than actual amounts.

Accepted Answer

A) True 
 B)False

Question 12

Budget preparation is a part of the planning process.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following best describes the term sensitivity analysis?

Accepted Answer

A)  Evaluating a company's financial condition by doing financial statement ratio analysis 
B)  An analysis of the emotional sensitivity of a company's employees 
C)  Testing data to determine how results would differ if key assumptions are changed 
D)  An evaluation of the accuracy of the data's assumptions

Question 14

Which of the following is NOT a period cost?

Accepted Answer

A)  CEO's salary 
B)  Delivery van depreciation 
C)  Sales commissions 
D)  Factory cleaning costs

Question 15

Fireox Company's selected cost data for 2017 are shown below:
$$\begin{array} { | l | l | } 
\hline \text { Work in process inventory, } 1 \text { Jan } 2017 & \$ 5880 \
\hline \text { Direct materials used } & 105,000 \
\hline \text { Work in process inventory, } 31 \text { Dec } 2017 & 2780 \
\hline \text { Cost of goods manufactured } & 193,300 \
\hline
\end{array}$$
Assuming manufacturing overhead costs of $27,810,what is the amount of direct labour incurred by Fireox Company in 2017?

Accepted Answer

A)  $57,390 
B)  $190,200 
C)  $60,490 
D)  883$132,810

Question 16

Which of the following describes the inventory,purchases,and cost of sales budget?

Accepted Answer

A)  It helps in planning to ensure the business has adequate cash. 
B)  It captures the variable and fixed expenses of the business. 
C)  It depicts the breakdown of sales based on terms of collection. 
D)  It aids in planning to ensure the company has adequate inventory on hand.

Question 17

The wages and benefits of the factory manager are included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 18

The starting point in the budgeting process is the preparation of the:

Accepted Answer

A)  budgeted income statement. 
B)  budgeted cash flow statement. 
C)  sales budget. 
D)  cash budget.

Question 19

Crystal Ltd is a retailer of stone ornaments.The company sold 15,200 units in 2017.The company has provided the following information:
$$\begin{array} { | l | l | } 
\hline \text { Sales revenue } & \$ 554,000 \
\hline \text { Purchases (excluding freight in) } & 290,000 \
\hline \text { Selling and administrative expenses } & 68,000 \
\hline \text { Freight in } & 14,000 \
\hline \text { Beginning inventory } & 49,000 \
\hline \text { Ending inventory } & 53,400 \
\hline
\end{array}$$
What is the cost per unit sold?

Accepted Answer

A)  $23.22 
B)  $20.00 
C)  $16.49 
D)  $19.71

Question 20

A budget focuses primarily on financial information but does not reflect specific business strategies.

Accepted Answer

A) True 
 B)False

Exam 19: Introduction to Managerial Accounting and the Master Budget

Managerial accounting includes the planning function.Which of the following items would be part of the planning function of a business's managerial accounting?

When a company is preparing a budgeted cash flow statement and it wishes to calculate the payments to suppliers for purchases of inventory,it should refer to which of the following?

A company has prepared the operational budget and the cash budget and is now preparing the budgeted balance sheet.To provide the balance for the Cash account,which document should be used?

Management is accountable to its suppliers and vendors in which of the following ways?

The wages and benefits of the factory cleaners are included in manufacturing overhead.

Indirect materials costs like lubricants and cleaning fluids are included in manufacturing overhead.

Repair and maintenance costs of vehicles used to deliver products to the customers are included in manufacturing overhead.

Budgeted financial statements are financial statements based on budgeted amounts rather than actual amounts.

Budget preparation is a part of the planning process.

Which of the following best describes the term sensitivity analysis?

Which of the following is NOT a period cost?

Which of the following describes the inventory,purchases,and cost of sales budget?

The wages and benefits of the factory manager are included in manufacturing overhead.

The starting point in the budgeting process is the preparation of the:

A budget focuses primarily on financial information but does not reflect specific business strategies.