Subject: Cost & Management Accounting II

Department: Accounting & Finance

Final Exam for Accounting & Management Student TIME ALLOWED: 1.30

Name: ________________________________ID________________ dep.

I. SAY TRUE OR FALSE

______1. Budget is the qualitative expression of a proposed plan of action by management
for a specified period.
______2. Budgets are an integral part of management control systems and well managed
budget.
______3. Contribution margin indicates why operating income changes as the number of units sold
changes
______4. Mixed cost is also known as semi variable cost.
______5. A financial budget quantifies management’s financial position.
______6. Revenue budget is the first step of operating budget.
______7. The annual operating budget may be divided into quarterly & monthly budgets.
______8. Master budget has two components.
______9. The sales budget is the key to the entire budgeting process because all other
Schedules derived from it.
______10. As the volume of sales increasing would not impact on contribution margin ratio.
II. Choose the best answer from the given alternative
______11. The increasing variable cost per unit on contribution margin ratio would be _?
A. Increasing C. No change
B. Decreasing D. Either increasing or decreasing
______12. All are used by Accountants often to perform CVP analysis to plan future levels of
operating activity and provide information except
A. Which products or services to C. The amount of revenue required to
emphasize. avoid losses
B. Whether to increase fixed costs D. to increase losses.
______13. Which one is advantage of budgeting?
A. For judging performance C. Motivating employees
B. Motivating manager D. All
______14. All are/ is correct about breakeven point except?
A. Total revenue is equal to total cost
B. Total revenue is equal to total fixed cost
C. The profit is equal to zero
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 D. The contribution margin is equal to fixed expense
______15. Which one is the method used to compute CVP analysis
A. The equation method C. The graph method
B. The contribution margin method D. All
______16. CVP analysis is based on the interaction of
A. Price or revenue C. Total fixed cost
B. Volume or level of activities D. All
______17. If the company sales two or more product together is known as _____
A. Sales mix C. Margin safety
B. Operating leverage D. all
______18. All are included under financial budget except.
A. Revenue budget C. Cash budget
B. Budgeted balance sheet D. Capital expenditure budget
______19. Which one is included under Operating Budget?
A. Sales budget C. Manufacturing cost
B. Production budget D. All
______20. __ a set of budgeted financial statements
A. Operating budget C. Sales mix
B. Master budget D. financial budget
______21. ___ The degree to which a company increasing operating income by increasing sales.
A. Operating leverage C. Contribution margin ratio
B. Mixed cost D. Marginal safety
III. MATCHING
COLOMN “A” COLOMN „‟B‟‟
-------1. The amount a customer pays to acquire product or service A. Volume
-------2. It shows The Budgeted Balance Sheet and cash flow B. cost
-------3. It shows The budgeted income statement C. Selling price
-------4. The variable & fixed expense involving product D. Financial budget
-------5. The number of unit or amount of service sold E. Operating budget
IV. Compute the following questions.

Assume that “HILINA ENRICHED FOOD COMPLEX” sold child food 50,000 units @ 50Birr per
unit. The Gross Margin was 70% of sales. Based on the above information’s answer the following
questions

A. What is the amount of sales /revenue of?

B. What is the amount of cost of Goods Sold (CGS)?
C. What is the amount of gross profit (Margin) in Birr?
D. Assume that if selling & administrative expense for the year was Birr100, 000. What is
the amount of operating income (IBT)?
E. If variable cost per unit Birr 20, what is the amount of contribution margin i?

Good luck!!!

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