1.

A manager that is establishing objectives is performing which management

function?
A. Planning B. Constraining C. Directing D. Controlling
2. Which of the following statements is false?
A. A standard is a unit amount.
B. In concept, standards and budgets are essentially the same.
C. The standard cost of a product is equivalent to the budgeted cost per unit of
product.
D. A standard cost is more accurate than a budgeted cost.
3. Managerial accounting reports can be described as
A. special-purpose. B. general-purpose.
C. macro-reports. D. classified financial statements.
4. The most common budget period is
A. one month. B. three months. C. six months. D. one year.
5. K Company produces flash drives for computers, which it sells for $20 each.
Each flash drive costs $14 of variable costs to make. During April, 1,000 drives
were sold. Fixed costs for March were $2 per unit for a total of $1,000 for the
month. How much is the contribution margin ratio?
A. 70% B. 80% C. 30% D. 20%
6. Cost behavior analysis is a study of how a firm's costs
A. relate to competitors' costs.
B. relate to general price level changes.
C. respond to changes in the level of business activity.
D. respond to changes in the gross national product.
7. A variable cost is a cost that
A. varies per unit at every level of activity.
B. occurs at various times during the year.
C. varies in total in proportion to changes in the level of activity.
D. may or may not be incurred, depending on management's discretion.
8. Which of the following is a true statement about process cost systems?
A. In process cost systems, costs are accumulated but not assigned.
B. A process cost system has one work in process account for each process.
C. In process cost systems, costs are summarized on job cost sheets.
D. Unit costs are not computed in process cost systems.
9. Cost behavior analysis applies to
A. retailers. B. all entities. C. manufacturers. D. wholesalers.
10. 15,000 units in a process that are 70% complete are referred to as:
A. 15,000 equivalent units of production. B. 4,500 equivalent units of
production.
C. 10,500 equivalent units of production. D. 4,500 equivalent units of
production.
11. In a process cost system,
A. a Work in Process account is maintained for each process.
B. a materials requisition must identify the job on which the materials will be
used.
C. a Work in Process account is maintained for each product.
D. one Work in Process account is maintained for all the processes, similar to a job
order cost system.
12. In process cost accounting, manufacturing costs are summarized on a
A. process order cost sheet. B. manufacturing cost sheet.
 C. job order cost sheet. D. production cost report.
13. Fixed costs normally will not include
A. property taxes. B. direct labor.
C. supervisory salaries. D. depreciation on buildings and
equipment.
14. If the activity level increases 10%, total variable costs will
A. remain the same. B. increase by more than 10%.
C. decrease by less than 10%. D. increase 10%.
15. Which one of the following is not an assumption of CVP analysis?
A. The behavior of costs and revenues are linear within the relevant range.
B. Sales mix remains constant.
C. All units produced are sold.
D. All costs are variable costs.
16. Process costing is not used when
A. a series of connected manufacturing processes is necessary.
B. similar goods are being produced.
C. jobs have distinguishing characteristics.
D. large volumes are produced.
17. If a company had a contribution margin of $750,000 and a contribution margin
ratio of 40%, total variable costs must have been
A. $1,125,000. B. $450,000. C. $1,875,000. D. $300,000.
18: Which is true of budgets?
A. They are voted on and approved by stockholders.
B. They are used in the planning, but not in the control, process.
C. There is a standard form and structure for budgets.
D. They are used in performance evaluation.
19. A budget period should be
A. monthly.
B. for a year or more.
C. long-term.
D. long enough to provide an obtainable goal under normal business conditions.
20. A static budget is appropriate in evaluating a manager's performance if
A. actual activity closely approximates the master budget activity.
B. actual activity is less than the master budget activity.
C. the company prepares reports on an annual basis.
D. the company is a not-for-profit organization
21. For Wilton Company, the predetermined overhead rate is 70% of direct labor
cost. During the month, $700,000 of factory labor costs are incurred of which
$200,000 is indirect labor. Actual overhead incurred was $360,000. The amount of
overhead debited to Work in Process Inventory should be:
A. $350,000 B. $500,000 C. $490,000 D. $360,000
22. A standard cost is
A. a cost which is paid for a group of similar products.
B. the average cost in an industry.
C. a predetermined cost.
D. the historical cost of producing a product last year.
23. The predetermined overhead rate is
A. determined on a moving average basis throughout the year.
B. not calculated until actual overhead costs are incurred.
C. determined at the beginning of the year.
D. determined at the end of the current year.