64 Free Test Bank for Managerial Accounting 5th Edition by Jiambalvo

Managerial accounting is concerned with providing helpful information and reports to managers. Based on this, we introduce 64 free test bank for Managerial Accounting Jiambalvo 5th Edition multiple choice questions with free response so that internal users in organizations can control and plan the business activities from the accounting questions in real business situations of the test.

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Which of the following costs will change when the level of business activity changes?

•  A. Total fixed costs
•  B. Variable cost per unit
•  C. A company’s total costs
•  D. Sunk cost

Managerial accounting

•  A. is primarily directed at external users of accounting information.
•  B. is required by taxing authorities such as the IRS.
•  C. must follow GAAP.
•  D. focuses on future performance.

Which one of the following is the last step in the planning and control process?

•  A. Implement a plan.
•  B. Construct a plan.
•  C. Make decisions based on the evaluation of the results.
•  D. Compare actual results to the planned results.

The fundamental difference between managerial and financial accounting is that

•  A. all financial accounting information is audited by Certified Public Accountants whereas managerial accounting information is audited by the IMA.
•  B. managerial accounting is concerned principally with budgets, whereas financial accounting is concerned with a wider range of the organization’s activities.
•  C. managerial accounting provides information for decision-makers within the organization, whereas financial accounting provides information for individuals and institutions external to the organization.
•  D. financial accounting information follows U.S. Generally Accepted Accounting Principles, whereas managerial accounting information generally follows rules set forth by the Institute of Management Accountants.

Opportunity costs are

•  A. considered to be fixed costs in the short-term.
•  B. another term for sunk costs.
•  C. costs that are controlled by most effective managers.
•  D. the value of benefits forgone when one decision alternative is selected over another.

Which of the following is most likely to be a fixed cost?

•  A. Cost of wheels for a lawn mower manufacturer
•  B. Rent on a factory building
•  C. Cost of labor for cashiers at a retail store
•  D. Supplies used by the housekeeping staff that cleans hotel rooms

The financial plans prepared by managerial accountants are referred to as

•  A. budgets.
•  B. financial statements.
•  C. treasurer’s reports.
•  D. controller’s opinions.

Which of the following is likely to be a noncontrollable cost of a department supervisor?

•  A. Labor in the department
•  B. Materials used in the department
•  C. Insurance on the plant
•  D. Overtime premium pay earned by those working in the department

Which of the following statements regarding fixed costs is true?

•  A. When production increases, fixed cost per unit increases.
•  B. When production decreases, total fixed costs decrease.
•  C. When production increases, fixed cost per unit decreases.
•  D. When production decreases, total fixed costs increase.

On which of the following costs should a manager not be evaluated?

•  A. Noncontrollable costs
•  B. Opportunity costs
•  C. Fixed costs
•  D. Variable costs

Costs incurred in the past that are not incremental to present decisions are

•  A. fixed costs.
•  B. sunk costs.
•  C. opportunity costs.
•  D. variable costs.

Sunk costs

•  A. can be incremental or not incremental, depending on the decision to be made.
•  B. include all incremental costs to management decisions.
•  C. are costs that cannot be directly traded to a product, activity, or department.
•  D. None of these answer choices are correct.

Which of the following is a difference between financial accounting and managerial accounting?

•  A. Managerial accounting is primarily concerned with reporting the past, while financial accounting is more concerned with future decisions that external users may need to make.
•  B. Managerial accounting uses monetary and nonmonetary information, whereas financial accounting reports monetary information.
•  C. Managerial accounting is primarily concerned with providing information for external users while financial accounting is concerned with internal users.
•  D. Financial accounting is rather detailed, while managerial accounting is more summarized.

When using management by exception, a difference between actual costs and budgeted costs

•  A. should be investigated if the amount is large.
•  B. indicates that the planned cost was poorly estimated.
•  C. indicates that the manager is doing a poor job.
•  D. should be ignored if it increases profit.

Kilwin’s Candies produced and sold 600 boxes of chocolate covered popcorn last month and had total variable costs of $2,100 that reflected the costs of chocolate and popcorn (ingredients). Each box of popcorn sells for $12.00. If production and sales are expected to increase by 10% next month, which of the following statements is true?

•  A. Total variable costs are expected to be $1,785
•  B. Variable cost per unit is expected to be $3.50
•  C. The incremental cost per unit is costs expected to be $0.35
•  D. Unit variable costs are expected to be $2.10

Variable cost per unit

•  A. increases when the number of units produced increases.
•  B. does not change when the number of units produced increases.
•  C. decreases when the number of units produced increases.
•  D. decreases when the number of units produced decreases.

Performance reports often compare current performance with

•  A. a competing company’s performance.
•  B. shareholders’ expected level of performance.
•  C. industry standards.
•  D. performance in a prior period or budgeted performance.

Which of the following is a direct cost in relation to the cost of teaching the managerial accounting course in a college?

•  A. The cost of the paper that is given as handouts in the class
•  B. The cost of the electricity to light the classroom
•  C. The cost of the registration system
•  D. The cost of the financial aid department of the college

Which of the following is a benefit given up when one decision alternative is selected over another?

•  A. Sunk cost
•  B. Controllable cost
•  C. Opportunity cost
•  D. Incremental cost

A cost which is directly traceable to a product, activity, or department is a(n)

•  A. fixed cost.
•  B. managerial cost.
•  C. opportunity cost.
•  D. direct cost.

Wilson Company’s managers investigate departures from the budget that appear to be significant. What principle is being followed?

•  A. Small amounts do not matter
•  B. Management by exception
•  C. Incremental analysis
•  D. You get what you measure

You own a car and are trying to decide whether to trade it in and buy a new car. Which of the following costs is an opportunity cost in this situation?

•  A. The trip to Europe that you will not be able to take if you buy the car
•  B. The cost of the car you are trading in
•  C. The cost of toothpaste and soap that you need for the next few months
•  D. The cost of your meals for the last week

A retailer purchased some trendy clothes that have gone out of style and must be marked down to 60% of the original selling price in order to be sold. Which of the following is a sunk cost in this situation?

•  A. The current selling price
•  B. The original selling price
•  C. The original purchase price
•  D. The anticipated profit

A sunk cost is a cost

•  A. expected to be incurred in the future which is not relevant to present decisions.
•  B. incurred in the current period which changes with changes in production activity.
•  C. incurred in the current period which remains constant even though activity changes.
•  D. incurred in the past that is not relevant for future decisions.

Which one of the following is most likely to make use of Ralston Enterprises’ managerial accounting information?

•  A. The IRS
•  B. An individual contemplating an investment in Ralston Enterprises
•  C. A company that is one of Ralston’s main suppliers
•  D. The production manager of Ralston’s plant in Georgia

Which of the following statements regarding direct and indirect costs is true?

•  A. Direct costs are always variable and indirect costs are always fixed.
•  B. Sunk costs are always direct, and opportunity costs are always fixed.
•  C. The distinction between a direct and indirect cost depends on the product, activity, or department to which the cost pertains.
•  D. If a cost is indirect to a department within a plant, it will also be indirect for the plant as a whole.

Which of the following is not a reason that current period performance results may differ from the company’s budget for that period?

•  A. The plan may not have been followed properly.
•  B. The plan may not have been well thought-out.
•  C. Changing circumstances may have made the plan out of date.
•  D. All of the above are reasons that actual results may differ from the company’s plan.

A company has a cost that is $3.00 per unit at a volume of 9,000 units and $3.00 per unit at a volume of 11,000 units. What type of cost is this?

•  A. Fixed
•  B. Variable
•  C. Sunk
•  D. Noncontrollable

Bagel Time produced and sold 2,500 bagels last month and incurred fixed costs totaling $8,000. If production and sales are expected to decrease by 10% next month, which of the following statements is true?

•  A. Total fixed costs will increase.
•  B. Total fixed costs will decrease.
•  C. Fixed cost per unit will increase.
•  D. Fixed cost per unit will decrease.

Managerial accounting stresses accounting concepts and procedures that are relevant to preparing reports for

•  A. investors and banks.
•  B. internal users of accounting information.
•  C. shareholders and creditors.
•  D. the Securities and Exchange Commission (SEC).

Which one of the following is true as it relates to the management function of control?

•  A. It is achieved by evaluating the performance of managers.
•  B. It is achieved by evaluating the operations for which a manager is responsible.
•  C. It is necessary only when performance is less than expected.
•  D. It is achieved by evaluating the performance of managers and the operations for which they are responsible.