MAKING AND CONTROL, 10 EDITION BY ZIMMERMAN
Managerial cAccounting cPractice cQuestions cand cAnswers c& cANSWERS
Based con cTopics cfrom cAccounting cfor cDecision cMaking cand
c Control cl
Question c1
What care cthe cthree cprimary cfunctions cof cmanagement caccounting?
Answer: cThe cthree cprimary cfunctions care:
1. Decision cMaking c- cProviding crelevant cinformation cfor
cmanagement cdecisions
2. Planning c- cAssisting cin cbudgeting cand cforecasting
, 3. Control c- cMonitoring cperformance cand cimplementing ccorrective cactions
Question c2
Explain cthe cdifference cbetween cfinancial caccounting cand cmanagement
caccounting.
Answer:
• Financial cAccounting: cExternal creporting, cfollows cGAAP,
chistorical cdata, cstandardized cformats
• Management cAccounting: cInternal creporting, cflexible cformats,
cfuture- coriented, cdecision-focused
Question c3
ABC cCompany cis cconsidering cwhether cto cmake cor cbuy ca ccomponent. cWhat
ctype cof ccosts cshould cmanagement cfocus con?
,Answer: cManagement cshould cfocus con crelevant ccosts c- ccosts cthat cdiffer
cbetween calternatives cand coccur cin cthe cfuture. cSunk ccosts cand callocated
coverhead cthat cdon't cchange cshould cbe cignored.
Chapter c2: cCost cConcepts cand cBehavior
c Question c4
Classify cthe cfollowing ccosts cas cfixed, cvariable, cor cmixed: ca) cMonthly crent:
$5,000 cb) cDirect cmaterials: c$3 cper cunit cc) cElectricity: c$500 cbase c+ c$0.10 cper
cmachine chour
Answer: ca) cFixed ccost c- cremains cconstant cregardless cof cactivity clevel cb)
cVariable ccost c- cchanges cproportionally cwith cunits cproduced cc) cMixed ccost c-
chas cboth cfixed c($500) cand cvariable c($0.10/hour) ccomponents
Question c5
High-Low cMethod cProblem: cMonth c| cMachine cHours c| cTotal cCost cJan c| c1,000 c|
$8,000 cFeb c| c1,500 c| c$10,000 cCalculate cthe cvariable ccost cper cmachine chour cand
cfixed ccost.
Answer: cVariable ccost cper chour c= c($10,000 c- c$8,000) c÷ c(1,500 c- c1,000) c= c$4
cper chour cFixed ccost c= c$8,000 c- c(1,000 c× c$4) c= c$4,000 cCost cequation: cTotal
cCost c=
$4,000 c+ c$4 c× cMachine cHours
Question c6
What cis cthe cdifference cbetween cdirect cand cindirect ccosts?
Answer:
• Direct ccosts: cCan cbe ceasily ctraced cto ca cspecific ccost cobject c(e.g.,
cdirect cmaterials, cdirect clabor)
• Indirect ccosts: cCannot cbe ceasily ctraced cand cmust cbe callocated
c(e.g., cfactory coverhead, cutilities)
Chapter c3: cActivity-Based cCosting c(ABC)
c Question c7
Traditional ccosting callocates coverhead cbased con cdirect clabor chours. cWhy cmight
cABC cprovide cbetter ccost cinformation?
Answer: cABC cprovides cbetter ccost cinformation cbecause cit:
, • Uses cmultiple ccost cdrivers cthat cbetter creflect cactual cresource cconsumption
• Identifies cactivities cthat ccause ccosts cto cbe cincurred
• Provides cmore caccurate cproduct ccosts, cespecially cfor ccomplex cproducts
• Helps cidentify cnon-value-added cactivities
Question c8
ABC cImplementation cProblem: cActivity c| cCost cPool c| cCost cDriver c| cTotal
cCost c| cTotal cDriver cUnits cSetup c| c$50,000 c| c# cof csetups c| c$50,000 c| c100
csetups cInspection| c$30,000 c| c# cof cinspections| c$30,000 c| c600 cinspections
Product cA crequires c20 csetups cand c150 cinspections. cCalculate coverhead
callocated cto cProduct cA.
Answer: cSetup crate c= c$50,000 c÷ c100 c= c$500 cper csetup cInspection crate c=
c$30,000
÷ c600 c= c$50 cper cinspection cProduct cA callocation c= c(20 c× c$500) c+ c(150 c×
c$50) c=
$10,000 c+ c$7,500 c= c$17,500
Chapter c4: cJob cCosting
c Question c9
Job c#123 chas cthe cfollowing ccosts:
• Direct cmaterials: c$2,500
• Direct clabor: c$1,800 c(60 chours cat c$30/hour)
• Overhead cis capplied cat c$25 cper cdirect clabor chour cCalculate ctotal cjob ccost.
Answer: cDirect cmaterials: c$2,500 cDirect clabor: c$1,800 cApplied coverhead: c60
chours c× c$25 c= c$1,500 cTotal cjob ccost: c$5,800
Question c10
What chappens cwhen cactual coverhead cdiffers cfrom capplied coverhead?
Answer:
• Underapplied coverhead: cActual c> cApplied c(debit cto cCOGS)
• Overapplied coverhead: cApplied c> cActual c(credit cto cCOGS) cAt cyear-
end, cthe cdifference cis ctypically cclosed cto cCost cof cGoods cSold.
Chapter c5: cProcess cCosting
c Question c11
Managerial cAccounting cPractice cQuestions cand cAnswers c& cANSWERS
Based con cTopics cfrom cAccounting cfor cDecision cMaking cand
c Control cl
Question c1
What care cthe cthree cprimary cfunctions cof cmanagement caccounting?
Answer: cThe cthree cprimary cfunctions care:
1. Decision cMaking c- cProviding crelevant cinformation cfor
cmanagement cdecisions
2. Planning c- cAssisting cin cbudgeting cand cforecasting
, 3. Control c- cMonitoring cperformance cand cimplementing ccorrective cactions
Question c2
Explain cthe cdifference cbetween cfinancial caccounting cand cmanagement
caccounting.
Answer:
• Financial cAccounting: cExternal creporting, cfollows cGAAP,
chistorical cdata, cstandardized cformats
• Management cAccounting: cInternal creporting, cflexible cformats,
cfuture- coriented, cdecision-focused
Question c3
ABC cCompany cis cconsidering cwhether cto cmake cor cbuy ca ccomponent. cWhat
ctype cof ccosts cshould cmanagement cfocus con?
,Answer: cManagement cshould cfocus con crelevant ccosts c- ccosts cthat cdiffer
cbetween calternatives cand coccur cin cthe cfuture. cSunk ccosts cand callocated
coverhead cthat cdon't cchange cshould cbe cignored.
Chapter c2: cCost cConcepts cand cBehavior
c Question c4
Classify cthe cfollowing ccosts cas cfixed, cvariable, cor cmixed: ca) cMonthly crent:
$5,000 cb) cDirect cmaterials: c$3 cper cunit cc) cElectricity: c$500 cbase c+ c$0.10 cper
cmachine chour
Answer: ca) cFixed ccost c- cremains cconstant cregardless cof cactivity clevel cb)
cVariable ccost c- cchanges cproportionally cwith cunits cproduced cc) cMixed ccost c-
chas cboth cfixed c($500) cand cvariable c($0.10/hour) ccomponents
Question c5
High-Low cMethod cProblem: cMonth c| cMachine cHours c| cTotal cCost cJan c| c1,000 c|
$8,000 cFeb c| c1,500 c| c$10,000 cCalculate cthe cvariable ccost cper cmachine chour cand
cfixed ccost.
Answer: cVariable ccost cper chour c= c($10,000 c- c$8,000) c÷ c(1,500 c- c1,000) c= c$4
cper chour cFixed ccost c= c$8,000 c- c(1,000 c× c$4) c= c$4,000 cCost cequation: cTotal
cCost c=
$4,000 c+ c$4 c× cMachine cHours
Question c6
What cis cthe cdifference cbetween cdirect cand cindirect ccosts?
Answer:
• Direct ccosts: cCan cbe ceasily ctraced cto ca cspecific ccost cobject c(e.g.,
cdirect cmaterials, cdirect clabor)
• Indirect ccosts: cCannot cbe ceasily ctraced cand cmust cbe callocated
c(e.g., cfactory coverhead, cutilities)
Chapter c3: cActivity-Based cCosting c(ABC)
c Question c7
Traditional ccosting callocates coverhead cbased con cdirect clabor chours. cWhy cmight
cABC cprovide cbetter ccost cinformation?
Answer: cABC cprovides cbetter ccost cinformation cbecause cit:
, • Uses cmultiple ccost cdrivers cthat cbetter creflect cactual cresource cconsumption
• Identifies cactivities cthat ccause ccosts cto cbe cincurred
• Provides cmore caccurate cproduct ccosts, cespecially cfor ccomplex cproducts
• Helps cidentify cnon-value-added cactivities
Question c8
ABC cImplementation cProblem: cActivity c| cCost cPool c| cCost cDriver c| cTotal
cCost c| cTotal cDriver cUnits cSetup c| c$50,000 c| c# cof csetups c| c$50,000 c| c100
csetups cInspection| c$30,000 c| c# cof cinspections| c$30,000 c| c600 cinspections
Product cA crequires c20 csetups cand c150 cinspections. cCalculate coverhead
callocated cto cProduct cA.
Answer: cSetup crate c= c$50,000 c÷ c100 c= c$500 cper csetup cInspection crate c=
c$30,000
÷ c600 c= c$50 cper cinspection cProduct cA callocation c= c(20 c× c$500) c+ c(150 c×
c$50) c=
$10,000 c+ c$7,500 c= c$17,500
Chapter c4: cJob cCosting
c Question c9
Job c#123 chas cthe cfollowing ccosts:
• Direct cmaterials: c$2,500
• Direct clabor: c$1,800 c(60 chours cat c$30/hour)
• Overhead cis capplied cat c$25 cper cdirect clabor chour cCalculate ctotal cjob ccost.
Answer: cDirect cmaterials: c$2,500 cDirect clabor: c$1,800 cApplied coverhead: c60
chours c× c$25 c= c$1,500 cTotal cjob ccost: c$5,800
Question c10
What chappens cwhen cactual coverhead cdiffers cfrom capplied coverhead?
Answer:
• Underapplied coverhead: cActual c> cApplied c(debit cto cCOGS)
• Overapplied coverhead: cApplied c> cActual c(credit cto cCOGS) cAt cyear-
end, cthe cdifference cis ctypically cclosed cto cCost cof cGoods cSold.
Chapter c5: cProcess cCosting
c Question c11
