Salem State College
ACC202 – Managerial Accounting
Final Exam – In-Class Portion
Professor Paul F.McGee, CPA
Name ________________________________
Please indicate, by circling the appropriate letter, your choice of the correct/best answer
1. Which of the following is not an example of a responsibility center?
a. cost center
b. revenue center
c. profit center
d. contribution center
2. If the head of computer consulting services (CCS) within an organization is held accountable for revenues and costs, then CCS is considered a(n):
a. cost center
b. revenue center
c. profit center
d. investment center
3. Controllable costs, as used in a responsibility accounting system, consist of:
a. only fixed costs
b. only direct materials and direct labor
c. those costs that a manager can influence in the time period under review.
d. Those costs about which a manager has some knowledge.
4 & 5. The following information was taken from the segmented income statement of Restin, Inc.:
Restin, Inc. L.A. Div. Bay Area
DivisionCentral
Valley Div.Revenues $750,000 $200,000 $225,000 $325,000 Variable operating expenses 410,000 110,000 120,000 180,000 Controllable fixed expenses 210,000 65,000 75,000 70,000 Noncontrollable fixed expenses 60,000 15,000 20,000 25,000 In addition, the company incurred common fixed costs of $18,000.
4. Bay Area’s traceable profit margin is:
a. $ 4,000
b. $ 8,000
c. $10,000
d. $30,000
5. The profit margin controllable by the Central Valley segment manager is:
a. $32,000
b. $44,000
c. $50,000
d. $75,000
6. When managers of subunits throughout an organization strive to achieve the goals set by top management, the result is:
a. goal congruence
b. planning and control
c. responsibility accounting
d. delegation of decision making
7. The term “management by exception” is best defined as:
a. choosing exceptional managers
b. controlling actions of subordinates through acceptance of management techniques
c. investigating unfavorable variances.
d. devoting management time to investigate significant variances.
8. A perfection standard:
a. tends tomotivate employees over a long period of time.
b. is attainable in an ideal operating environment
c. would make allowances for normal amounts of scrap and waste.
d. Is generally preferred by behavioral scientists
9. Thomas recently completed 24,000 units of a product that was expected to consume five pounds of direct material per finished unit. The standard price of the direct material was $6 per pound. If the firm purchased and consumed 110,000 pounds in manufacturing (cost = $605,000), the direct-materials quantity variance would be figured as:
a. $55,000 (F)
b. $60,000 (F)
c. $115,000 (F)
d. $60,000 (U)
10. Collins Corporation had a favorable direct-labor efficiency variance of $5,250 for the period just ended. The actual wage rate was $0.50 more than the standard rate of $10.00. If the company’s standard hours allowed for actual production totaled 9,000, how many hours did the firm actually work?
a. 8,475
b. 8,500
c. 9,500
d. 9,525
11. A production supervisor generally has little influence over the
a. direct-material quantity variance
b. direct-labor rate variance
c. direct-labor efficiency variance
d. direct-material price variance
12. Which of the following journal entries definitely contains an error?
| a. | Raw-material Inventory | 200,000 | |
| Direct material price variance | 5,000 | ||
| Accounts payable | 205,000 | ||
| b. | Raw-material Inventory | 38,000 | |
| Direct-material price variance | 2,000 | ||
| Accounts payable | 36,000 | ||
| c. | Raw-material Inventory | 156,000 | |
| Direct-Material Price Variance | 8,000 | ||
| Work-in-Process | 148,000 | ||
| d. | Work-in-process Inventory | 67,000 | |
| Direct-material quantity variance | 3,000 | ||
| Raw-material inventory | 70,000 |
13. When considering whether to investigate a variance, managers should consider all of the following except the variance’s:
a. size
b. pattern of recurrence
c. trends over time
d. nature, namely, whether it is favorable or unfavorable
14. At the end of the accounting period, most companies close variance accounts to:
a. raw-material inventory
b. work-in-process inventory
c. finished-goods inventory
d. cost of goods sold
15. A formal budget program will almost always result in:
a. higher sales
b. more cash inflows that cash outflows
c. decreased expenses
d. a detailed plan against which actual results can be compared.
16. The comprehensive set of budgets that serves as a company’s overall financial plan is commonly known as:
a. an integrated budget
b. a pro-forma budget
c. a master budget
d. a financial budget
17. Teller & Company had 3,000 units in finished-goods inventory on December 31. The following data are available:
January February
Units to be produced 9,400 10,200
Desired ending finished-goods inventory 2,500 2,100
The number of units the company expects to sell in January is:
a. 6,900
b. 8,900
c. 9,400
d. 9,900
18. Velco manufactures a product requiring 0.5 ounces of platinum per unit. The cost of platinum is approximately $360 per ounce; the company maintains an ending platinum inventory equal 10% of the following month’s production usage. The following data were taken from the most recent quarterly production budget:
Planned production in units 1,000 1,100 980
The cost of platinum to be purchased in August is:
a. $195,840
b. $198,000
c. $200,160
d. $391,680
19. A manufacturing firm would begin preparation of its master budget by constructing a:
a. sales budget
b. production budget
c. cash budget
d. capital budget
20. Which of the following would have no effect on an organization’s cash budget?
a. sales revenues
b. outlays for professional labor
c. advertising expenditures
d. method of depreciation used