A306 Exam UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
An effective performance evaluation will do what? - CORRECT ANSWER Reward behavior
that benefits the company and will include multiple performance measures
A company provides the following info:Material price variance: 800F, Material spending variance:
250FBudgeted material/unit: 1.5 ft, Budgeted material price: $6/ftActual units produced: 100,
Budgeted units produced: 120
What is the material quantity variance? - CORRECT ANSWER $550 U
SQA: 100units*1.5ft = 150ft*$6=$900Mat Spending Var = Mat Qty Var + Mat Price Var250F = X +
800FMat Qty Var = 550U
Disadvantage of NPV method. - CORRECT ANSWER Can not compare projects with
different initial investments.
If fixed costs are $15,000 and variable costs are $4/unit, what are the break even units if each unit
sells for $10? - CORRECT ANSWER 2500 units
What is a disadvantage of using residual income as a performance indicator? - CORRECT ANSWER
It favors large divisions
Who uses management accounting and analysis? - CORRECT ANSWER ALL business
students, ALL managers
Managers use data to: - CORRECT ANSWER Plan, control, and make decisions
How is management accounting more than just numbers? (6) - CORRECT ANSWER -Ethics
-strategy: game plan
-risk management
-social responsibility: balance needs of all
-process management: value chain
- leadership
,Management accounting - CORRECT ANSWER the process of analyzing business costs and
operations to prepare internal financial report, records, and account to aid managers' decision making
process in achieving business goals
Who are the decision makers outside the company (3) - CORRECT ANSWER 1. Investors
2. Banks/lenders/creditors
3. Govt agencies/regulators
4 audited stmts in financial accounting - CORRECT ANSWER 1. Balance sheet
2. Income statement
3. Stmt cash flows
4. Retained earnings
Who are the decision makers inside the company: (3) - CORRECT ANSWER 1. Executives
2. Dept managers
3. Employees
Purpose of management accounting: - CORRECT ANSWER 1. Planning - set goals, how to
achieve
2. Control - feedback
3. Decision making
Which of the following statements is false:
a. Creditors would be a user of financial accounting information
b. Management accounting information is used to develop budgets
c. Financial accounting information emphasizes decisions for the future
d. Reports based on management accounting information are created when required - CORRECT
ANSWER C - that's managerial accounting
Which best describes management accounting?
A. Management accounting is mainly focused on past results
, b. Management accounting reports are rules based using GAAP
c. The main users of mgmt acc info are outside the firm
d. Management accounting reports are prepared following the National management accounting
standards
E. Management account is primarily used for decision making - CORRECT ANSWER E
Planning (2) - CORRECT ANSWER - involves developing goals and
- preparing various budgets to achieve those goals
Control (3) - CORRECT ANSWER - involves gathering feedback to ensure the plan is working
- making changes as needed
- verifying all parts of the organization are working together toward the goals
Make decisions - CORRECT ANSWER Have a competitive advantage
NOI = - CORRECT ANSWER REV - COSTS
Names for indirect costs - CORRECT ANSWER Shared, allocated, common costs
If he cost in the smallest circle is D... - CORRECT ANSWER It stays direct as you get bigger
If cost in smallest circle is indirect... - CORRECT ANSWER It flips to direct and will stay
direct
Are mfg and non mfg costs only direct? - CORRECT ANSWER Can be direct or indirect!
Depends on cost object
What does the cost object determine - CORRECT ANSWER If a cost is direct or indirect
What is the purpose of prime and conversion costs? - CORRECT ANSWER To gauge
efficiency!
QUESTIONS AND CORRECT ANSWERS
An effective performance evaluation will do what? - CORRECT ANSWER Reward behavior
that benefits the company and will include multiple performance measures
A company provides the following info:Material price variance: 800F, Material spending variance:
250FBudgeted material/unit: 1.5 ft, Budgeted material price: $6/ftActual units produced: 100,
Budgeted units produced: 120
What is the material quantity variance? - CORRECT ANSWER $550 U
SQA: 100units*1.5ft = 150ft*$6=$900Mat Spending Var = Mat Qty Var + Mat Price Var250F = X +
800FMat Qty Var = 550U
Disadvantage of NPV method. - CORRECT ANSWER Can not compare projects with
different initial investments.
If fixed costs are $15,000 and variable costs are $4/unit, what are the break even units if each unit
sells for $10? - CORRECT ANSWER 2500 units
What is a disadvantage of using residual income as a performance indicator? - CORRECT ANSWER
It favors large divisions
Who uses management accounting and analysis? - CORRECT ANSWER ALL business
students, ALL managers
Managers use data to: - CORRECT ANSWER Plan, control, and make decisions
How is management accounting more than just numbers? (6) - CORRECT ANSWER -Ethics
-strategy: game plan
-risk management
-social responsibility: balance needs of all
-process management: value chain
- leadership
,Management accounting - CORRECT ANSWER the process of analyzing business costs and
operations to prepare internal financial report, records, and account to aid managers' decision making
process in achieving business goals
Who are the decision makers outside the company (3) - CORRECT ANSWER 1. Investors
2. Banks/lenders/creditors
3. Govt agencies/regulators
4 audited stmts in financial accounting - CORRECT ANSWER 1. Balance sheet
2. Income statement
3. Stmt cash flows
4. Retained earnings
Who are the decision makers inside the company: (3) - CORRECT ANSWER 1. Executives
2. Dept managers
3. Employees
Purpose of management accounting: - CORRECT ANSWER 1. Planning - set goals, how to
achieve
2. Control - feedback
3. Decision making
Which of the following statements is false:
a. Creditors would be a user of financial accounting information
b. Management accounting information is used to develop budgets
c. Financial accounting information emphasizes decisions for the future
d. Reports based on management accounting information are created when required - CORRECT
ANSWER C - that's managerial accounting
Which best describes management accounting?
A. Management accounting is mainly focused on past results
, b. Management accounting reports are rules based using GAAP
c. The main users of mgmt acc info are outside the firm
d. Management accounting reports are prepared following the National management accounting
standards
E. Management account is primarily used for decision making - CORRECT ANSWER E
Planning (2) - CORRECT ANSWER - involves developing goals and
- preparing various budgets to achieve those goals
Control (3) - CORRECT ANSWER - involves gathering feedback to ensure the plan is working
- making changes as needed
- verifying all parts of the organization are working together toward the goals
Make decisions - CORRECT ANSWER Have a competitive advantage
NOI = - CORRECT ANSWER REV - COSTS
Names for indirect costs - CORRECT ANSWER Shared, allocated, common costs
If he cost in the smallest circle is D... - CORRECT ANSWER It stays direct as you get bigger
If cost in smallest circle is indirect... - CORRECT ANSWER It flips to direct and will stay
direct
Are mfg and non mfg costs only direct? - CORRECT ANSWER Can be direct or indirect!
Depends on cost object
What does the cost object determine - CORRECT ANSWER If a cost is direct or indirect
What is the purpose of prime and conversion costs? - CORRECT ANSWER To gauge
efficiency!
