IVY SOFTWARE MBA PREPWORKS
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MANAGERIAL ACCOUNTING EXAM |\ |\ |\
QUESTIONS WITH ANSWERS |\ |\
If Elli Inc sells 20,000 units of x and 60,000 units of y, the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
composite unit consists of .25x and .75y (T/F) - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔True. Adding 20,000 and 60,000 we get 80,000
|\ |\ |\ |\ |\ |\ |\ |\ |\
units. Splitting this up into proportions we have
|\ |\ |\ |\ |\ |\ |\ |\
20,000/80,000=25%x and 60,000/80,000=75%y. |\ |\
If the quantity sold is greater than the quantity produced there
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
has to be: - CORRECT ANSWERS ✔✔Finished goods beginning
|\ |\ |\ |\ |\ |\ |\ |\ |\
inventory. If you sell more than you produce, you must obtain the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
units somewhere. You obtain them from the finished goods
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
beginning inventory. |\
Contribution margin and contribution margin per unit are the |\ |\ |\ |\ |\ |\ |\ |\ |\
same. - CORRECT ANSWERS ✔✔False
|\ |\ |\ |\
Breakeven indicates that the sales dollars cover all fixed and
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
variable costs of manufacturing - CORRECT ANSWERS ✔✔True
|\ |\ |\ |\ |\ |\ |\
Inventoriable costs using variable costing is appropriate for |\ |\ |\ |\ |\ |\ |\ |\
external reporting - CORRECT ANSWERS ✔✔False
|\ |\ |\ |\ |\
,Essex company sells two products- A and B. Product A sales are
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
two times that of product B. The contribution per unit for A is $4
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
and B is $1. What is the weighted average contribution margin
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
per unit? - CORRECT ANSWERS ✔✔$3
|\ |\ |\ |\ |\
Absorption costing clearly separates fixed costs from variable |\ |\ |\ |\ |\ |\ |\ |\
costs - CORRECT ANSWERS ✔✔false
|\ |\ |\ |\
Converse company has two products- A and B. The weighted
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
average contribution margin per unit is $4. Converse sells twice
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
as many As as Bs. The contribution margin per unit for B is $2.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
What is it for A? - CORRECT ANSWERS ✔✔$5
|\ |\ |\ |\ |\ |\ |\ |\
If the breakeven is 5000 units and fixed costs are $50,000, what
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
is the contribution margin per unit? - CORRECT ANSWERS ✔✔$10
|\ |\ |\ |\ |\ |\ |\ |\ |\
Which of the following will be found on an absorption costing
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
income statement but not on a variable costing income
|\ |\ |\ |\ |\ |\ |\ |\ |\
statement? - CORRECT ANSWERS ✔✔Gross Margin and Cost of |\ |\ |\ |\ |\ |\ |\ |\ |\
Goods Sold |\
If units produced are less than units sold, net income using
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
absorption costing is - CORRECT ANSWERS ✔✔Less than variable |\ |\ |\ |\ |\ |\ |\ |\ |\
costing
If the selling price is $5 per unit the variable cost is $1 per unit
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
and the fixed cost is $20,000, what is the breakeven in units? -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔$5,000 (5x - 1x - 20000 = 0, 4x - |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
20,000=0, 4x=20000, x = 5000) |\ |\ |\ |\
,The total of ALL the right-hand sides of the T-accounts must
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
equal the total of ALL the left-hand sides of the T-Accounts (T/F) -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔True. The double-entry system of
|\ |\ |\ |\ |\ |\ |\ |\
accounting means that for each transaction recorded, there is a |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
left-hand (debit) entry offset by a right-hand (credit) entry.
|\ |\ |\ |\ |\ |\ |\ |\
Since the total of all the R sides of accounts equals the total of L
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
sides, then the total amount of increases entered in the general
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ledger must equal the total amount of decreases (T/F) - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔False. Cash (Asset) and Common Stock (Owners'
|\ |\ |\ |\ |\ |\ |\ |\ |\
Equity) is used to record the sale of company stock. While the R
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
side equals the L side, they both increase, thus, the total amount
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
of increases does not equal the decreases.
|\ |\ |\ |\ |\ |\ |\
Almost all the data necessary to prepare an income statement is
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
contained in the retained earnings account. - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\
✔✔False. not Almost all. ALL.
|\ |\ |\ |\ |\
A transaction is an event that affects the financial position of a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
company. - CORRECT ANSWERS ✔✔True. |\ |\ |\ |\
Credits are generally good and debits are generally bad. -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔False. credit means nothing more than
|\ |\ |\ |\ |\ |\ |\ |\
the R side while a debit means the L side. Neither is good or bad.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Bookkeeping accounts are a method of accumulating financial |\ |\ |\ |\ |\ |\ |\ |\
transactions and summarizing their effects on balance sheet |\ |\ |\ |\ |\ |\ |\ |\
items. - CORRECT ANSWERS ✔✔True. Bookkeeping accounts
|\ |\ |\ |\ |\ |\ |\
, provide an easy means for recording, collecting, and reporting
|\ |\ |\ |\ |\ |\ |\ |\ |\
financial transactions of a firm. |\ |\ |\ |\
Liabilities normally have a L balance - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔False. Liabilities and OE usually have R balances while assets
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
have L balances |\ |\
It is possible to have the books in balance but with mistakes. -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Having the books in balance simply |\ |\ |\ |\ |\ |\ |\ |\
means that each time you entered a transaction you placed
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
equal amounts on the R and L sides. Books which balance do not
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
rule out the possibility that a transaction could have been posted
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
to the wrong account.
|\ |\ |\ |\
The main purpose of the trial balance is to make sure you have
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
not committed any math errors in your T- Accounts (T/F) -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔True. The trial balance is taken as a |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
partial check of the arithmetic accuracy of the entries previously
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
made.
Fixed costs are fixed per unit produced, but vary in total (true or
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
false) - CORRECT ANSWERS ✔✔False. Fixed costs vary by unit
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
produced but are fixed in total. Remember the graph with the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
straight line over all the units of production.|\ |\ |\ |\ |\ |\ |\
True or False: Variable costs are fixed per unit but vary in total. -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔True. |\ |\
|\ |\ |\ |\
MANAGERIAL ACCOUNTING EXAM |\ |\ |\
QUESTIONS WITH ANSWERS |\ |\
If Elli Inc sells 20,000 units of x and 60,000 units of y, the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
composite unit consists of .25x and .75y (T/F) - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔True. Adding 20,000 and 60,000 we get 80,000
|\ |\ |\ |\ |\ |\ |\ |\ |\
units. Splitting this up into proportions we have
|\ |\ |\ |\ |\ |\ |\ |\
20,000/80,000=25%x and 60,000/80,000=75%y. |\ |\
If the quantity sold is greater than the quantity produced there
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
has to be: - CORRECT ANSWERS ✔✔Finished goods beginning
|\ |\ |\ |\ |\ |\ |\ |\ |\
inventory. If you sell more than you produce, you must obtain the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
units somewhere. You obtain them from the finished goods
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
beginning inventory. |\
Contribution margin and contribution margin per unit are the |\ |\ |\ |\ |\ |\ |\ |\ |\
same. - CORRECT ANSWERS ✔✔False
|\ |\ |\ |\
Breakeven indicates that the sales dollars cover all fixed and
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
variable costs of manufacturing - CORRECT ANSWERS ✔✔True
|\ |\ |\ |\ |\ |\ |\
Inventoriable costs using variable costing is appropriate for |\ |\ |\ |\ |\ |\ |\ |\
external reporting - CORRECT ANSWERS ✔✔False
|\ |\ |\ |\ |\
,Essex company sells two products- A and B. Product A sales are
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
two times that of product B. The contribution per unit for A is $4
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
and B is $1. What is the weighted average contribution margin
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
per unit? - CORRECT ANSWERS ✔✔$3
|\ |\ |\ |\ |\
Absorption costing clearly separates fixed costs from variable |\ |\ |\ |\ |\ |\ |\ |\
costs - CORRECT ANSWERS ✔✔false
|\ |\ |\ |\
Converse company has two products- A and B. The weighted
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
average contribution margin per unit is $4. Converse sells twice
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
as many As as Bs. The contribution margin per unit for B is $2.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
What is it for A? - CORRECT ANSWERS ✔✔$5
|\ |\ |\ |\ |\ |\ |\ |\
If the breakeven is 5000 units and fixed costs are $50,000, what
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
is the contribution margin per unit? - CORRECT ANSWERS ✔✔$10
|\ |\ |\ |\ |\ |\ |\ |\ |\
Which of the following will be found on an absorption costing
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
income statement but not on a variable costing income
|\ |\ |\ |\ |\ |\ |\ |\ |\
statement? - CORRECT ANSWERS ✔✔Gross Margin and Cost of |\ |\ |\ |\ |\ |\ |\ |\ |\
Goods Sold |\
If units produced are less than units sold, net income using
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
absorption costing is - CORRECT ANSWERS ✔✔Less than variable |\ |\ |\ |\ |\ |\ |\ |\ |\
costing
If the selling price is $5 per unit the variable cost is $1 per unit
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
and the fixed cost is $20,000, what is the breakeven in units? -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔$5,000 (5x - 1x - 20000 = 0, 4x - |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
20,000=0, 4x=20000, x = 5000) |\ |\ |\ |\
,The total of ALL the right-hand sides of the T-accounts must
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
equal the total of ALL the left-hand sides of the T-Accounts (T/F) -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔True. The double-entry system of
|\ |\ |\ |\ |\ |\ |\ |\
accounting means that for each transaction recorded, there is a |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
left-hand (debit) entry offset by a right-hand (credit) entry.
|\ |\ |\ |\ |\ |\ |\ |\
Since the total of all the R sides of accounts equals the total of L
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
sides, then the total amount of increases entered in the general
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ledger must equal the total amount of decreases (T/F) - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔False. Cash (Asset) and Common Stock (Owners'
|\ |\ |\ |\ |\ |\ |\ |\ |\
Equity) is used to record the sale of company stock. While the R
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
side equals the L side, they both increase, thus, the total amount
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
of increases does not equal the decreases.
|\ |\ |\ |\ |\ |\ |\
Almost all the data necessary to prepare an income statement is
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
contained in the retained earnings account. - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\
✔✔False. not Almost all. ALL.
|\ |\ |\ |\ |\
A transaction is an event that affects the financial position of a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
company. - CORRECT ANSWERS ✔✔True. |\ |\ |\ |\
Credits are generally good and debits are generally bad. -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔False. credit means nothing more than
|\ |\ |\ |\ |\ |\ |\ |\
the R side while a debit means the L side. Neither is good or bad.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Bookkeeping accounts are a method of accumulating financial |\ |\ |\ |\ |\ |\ |\ |\
transactions and summarizing their effects on balance sheet |\ |\ |\ |\ |\ |\ |\ |\
items. - CORRECT ANSWERS ✔✔True. Bookkeeping accounts
|\ |\ |\ |\ |\ |\ |\
, provide an easy means for recording, collecting, and reporting
|\ |\ |\ |\ |\ |\ |\ |\ |\
financial transactions of a firm. |\ |\ |\ |\
Liabilities normally have a L balance - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔False. Liabilities and OE usually have R balances while assets
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
have L balances |\ |\
It is possible to have the books in balance but with mistakes. -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔Having the books in balance simply |\ |\ |\ |\ |\ |\ |\ |\
means that each time you entered a transaction you placed
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
equal amounts on the R and L sides. Books which balance do not
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
rule out the possibility that a transaction could have been posted
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
to the wrong account.
|\ |\ |\ |\
The main purpose of the trial balance is to make sure you have
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
not committed any math errors in your T- Accounts (T/F) -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔True. The trial balance is taken as a |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
partial check of the arithmetic accuracy of the entries previously
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
made.
Fixed costs are fixed per unit produced, but vary in total (true or
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
false) - CORRECT ANSWERS ✔✔False. Fixed costs vary by unit
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
produced but are fixed in total. Remember the graph with the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
straight line over all the units of production.|\ |\ |\ |\ |\ |\ |\
True or False: Variable costs are fixed per unit but vary in total. -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔True. |\ |\
