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    Managerial Accounting -MCQ

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    Business / Managerial Accounting - Please select ONLY: a,b,c, or d.
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    * Flexible budgets can be constructed to help managers see how sensitive projected profits are to change in all of the following key

    budget assumptions EXCEPT

    a. sales volume.
    b. fixed cost percentages.
    c. variable cost percentages.
    d. sales price.

    * What is the managerial accounting term used to describe differences between actual and budgeted amounts shown on the financial

    statements?

    a. Changes
    b. Differences
    c. Sensitivities
    d. Variances

    * An unfavorable variable cost price variance could be caused by which of the following?

    a. Inefficient use of resources
    b. Increase in building rent
    c. Increase in sales activity
    d. Renegotiated purchase contracts

    * In which type of responsibility center are managers held accountable for the amount of and efficient use of the assets of the center?

    a. Profit center
    b. Investment center
    c. Revenue center
    d. All of these answers are correct.

    * Segment margin is

    a. contribution margin minus committed fixed costs.
    b. performance margin minus controllable fixed costs.
    c. performance margin minus committed fixed costs.
    d. contribution margin minus controllable fixed costs.

    * The Motor Division of Farrow Industries reports the following information:

    --------------------------------------------------------------------------------------------------

    Contribution margin $2,300,000
    Common fixed costs 500,000
    Committed fixed costs 400,000
    Controllable fixed costs 300,000

    What is the performance margin for the Motor Division?

    a. $1,600,000
    b. $1,800,000
    c. $1,900,000
    d. $2,000,000

    * Residual income for an investment center equals

    a. performance margin minus the cost of financing the segment's assets.
    b. segment margin plus the cost of financing the segment's assets.
    c. performance margin plus the cost of financing the segment's assets.
    d. segment margin minus the cost of financing the segment's assets.

    * Which of the following should NOT be considered when evaluating investment in a new asset?

    a. Expected life of the new asset
    b. Actual purchase cost of the new asset
    c. Expected maintenance costs for old and new assets
    d. Actual purchase cost of the old asset

    * Which of the following is a lost benefit given up by choosing a particular decision alternative?

    a. Avoidable cost
    b. Sunk cost
    c. Opportunity cost
    d. Incremental cost

    * Which of the following would be irrelevant to a decision as to whether to accept a special offer by a customer to obtain a large quantity of product at a special reduced rate?

    a. The avoidable fixed costs associated with making the product
    b. The variable costs of direct and indirect materials for the product
    c. The variable cost of direct and indirect labor associated with making the product
    d. The unavoidable fixed costs of operations

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    Solution Preview

    · Flexible budgets can be constructed to help managers see how sensitive projected profits are to change in all of the following key budget assumptions EXCEPT

    a. sales volume.
    b. fixed cost percentages.
    c. variable cost percentages.
    d. sales price.
    Answer: d (sales price)

    * What is the managerial accounting term used to describe differences between actual and budgeted amounts shown on the financial

    statements?

    a. Changes
    b. Differences
    c. Sensitivities
    d. Variances
    Answer: d (variances)

    * An unfavorable variable cost price variance could be caused by which of the following?

    a. Inefficient use of resources
    b. Increase in building rent
    c. Increase in sales activity
    d. Renegotiated purchase contracts
    Answer: d (Renegotiated purchase contracts )

    * In which type of ...

    Solution Summary

    Solution contains answers of multiple choice questions.

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