ACG 2071 Intro to Managerial Accounting
Full Finals Exam Review (Qns & Ans)
2025
1. Multiple Choice
Which cost classification applies to direct materials used in the
production of goods?
A. Fixed cost
B. Variable cost
C. Mixed cost
D. Period cost
ANS: B. Variable cost
Rationale: Direct materials vary with production levels, making
them a variable cost.
©2025
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2. Fill-in-the-Blank
_ costs are incurred even when production levels are zero and
include expenses such as rent and salaries.
ANS: Fixed
Rationale: Fixed costs do not depend on production levels and
are incurred regardless of activity.
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3. True/False
Managerial accounting focuses primarily on external reporting for
stakeholders.
ANS: False
Rationale: Managerial accounting emphasizes internal
reporting to assist managers in decision-making, unlike financial
accounting which targets external stakeholders.
©2025
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4. Multiple Response
Which activities are included in the budgeting process for
managerial accounting? (Select all that apply.)
A. Forecasting revenues
B. Allocating resources
C. Measuring employee performance
D. Monitoring expenses
ANS: A, B, D
Rationale: Budgeting involves forecasting revenues, allocating
resources effectively, and monitoring costs to meet financial
goals.
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5. Multiple Choice
A company allocates overhead costs based on machine hours. If
overhead is $100 per machine hour and the company operates 500
hours, what is the total overhead cost allocated?
A. $5,000
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, B. $50,000
C. $500
D. $25,000
ANS: B. $50,000
Rationale: Total overhead cost = Overhead rate × Machine
hours = $100 × 500 = $50,000.
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6. Fill-in-the-Blank
The _ margin is calculated by deducting variable costs from sales
revenue.
ANS: Contribution
Rationale: Contribution margin helps assess how sales revenue
contributes to fixed costs and profitability after covering variable
costs.
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7. True/False
©2025
Full Finals Exam Review (Qns & Ans)
2025
1. Multiple Choice
Which cost classification applies to direct materials used in the
production of goods?
A. Fixed cost
B. Variable cost
C. Mixed cost
D. Period cost
ANS: B. Variable cost
Rationale: Direct materials vary with production levels, making
them a variable cost.
©2025
,---
2. Fill-in-the-Blank
_ costs are incurred even when production levels are zero and
include expenses such as rent and salaries.
ANS: Fixed
Rationale: Fixed costs do not depend on production levels and
are incurred regardless of activity.
---
3. True/False
Managerial accounting focuses primarily on external reporting for
stakeholders.
ANS: False
Rationale: Managerial accounting emphasizes internal
reporting to assist managers in decision-making, unlike financial
accounting which targets external stakeholders.
©2025
,---
4. Multiple Response
Which activities are included in the budgeting process for
managerial accounting? (Select all that apply.)
A. Forecasting revenues
B. Allocating resources
C. Measuring employee performance
D. Monitoring expenses
ANS: A, B, D
Rationale: Budgeting involves forecasting revenues, allocating
resources effectively, and monitoring costs to meet financial
goals.
---
5. Multiple Choice
A company allocates overhead costs based on machine hours. If
overhead is $100 per machine hour and the company operates 500
hours, what is the total overhead cost allocated?
A. $5,000
©2025
, B. $50,000
C. $500
D. $25,000
ANS: B. $50,000
Rationale: Total overhead cost = Overhead rate × Machine
hours = $100 × 500 = $50,000.
---
6. Fill-in-the-Blank
The _ margin is calculated by deducting variable costs from sales
revenue.
ANS: Contribution
Rationale: Contribution margin helps assess how sales revenue
contributes to fixed costs and profitability after covering variable
costs.
---
7. True/False
©2025
