MANAGERIAL ACCOUNTING MBA PREP
WORKS FINAL CERTIFICATION PAPER
2026 QUESTIONS WITH SOLUTIONS
GRADED A+
⩥ direct materials production budget.
Answer: Production budget × direct materials per unit
⩥ the direct materials purchases budget.
Answer: Direct materials production budget + ending direct materials
inventory - beginning direct materials inventory
⩥ Cash collected from customers.
Answer: (current period revenue × current period collection rate) + cash
collected from previous period sales
⩥ Cash payments to suppliers.
Answer: (current period purchases × current period payment rate) + cash
paid on previous period purchases
⩥ Cost Variance.
Answer: Difference between actual costs and budgeted costs
,⩥ Contribution Margin.
Answer: = Sales Revenue - Variable Costs
The difference between total sales and variable costs; the portion of sales
revenue available to cover fixed costs and provide a profit.
⩥ Target Income.
Answer: = Sales Revenue - Variable Costs - Fixed Costs
A profit level desired by management.
⩥ At break-even.
Answer: Target income = 0
⩥ Sales Revenue.
Answer: = Sales Price x Number of Units
⩥ Variable Costs.
Answer: = Variable Cost per Unit x Number of Units
Costs that change in total in direct proportion to changes in activity
level.
⩥ Variable Cost Ratio x Sales Revenue.
,Answer: Variable Costs
⩥ Unit-level activities.
Answer: Activities that take place each time a unit of product is
produced.
⩥ Batch-level activities.
Answer: Activities that take place in order to support a batch or
production run, regardless of the size of the batch.
⩥ Product-line Activities.
Answer: Activities that take place in order to support a product line,
regardless of the number of batches or individual units produced.
⩥ cost pool.
Answer: Total cost being generated by a specific overhead cost activity.
⩥ cost driver.
Answer: A numerical measure used to reflect the amount of a specific
cost that is associated with a particular activity
⩥ Activity rate.
, Answer: The amount of the estimated cost pool divided by the estimated
number of cost driver events
⩥ How do expenses impact the accounting equation?.
Answer: Expenses decrease owners' equity
⩥ Purpose of the accounting cycle?.
Answer: To turn information about transactions into financial statements
⩥ How is gross profit computed?.
Answer: Sales minus cost of good sold
⩥ Which type of account is retained earnings?.
Answer: Equity
⩥ How does a classified balance sheet provide useful info to a decision
maker?.
Answer: It distinguishes between current and long-term assets
⩥ What are the three primary functions that company managers use
managerial accounting info for?.
Answer: Planning, controlling, evaluating
WORKS FINAL CERTIFICATION PAPER
2026 QUESTIONS WITH SOLUTIONS
GRADED A+
⩥ direct materials production budget.
Answer: Production budget × direct materials per unit
⩥ the direct materials purchases budget.
Answer: Direct materials production budget + ending direct materials
inventory - beginning direct materials inventory
⩥ Cash collected from customers.
Answer: (current period revenue × current period collection rate) + cash
collected from previous period sales
⩥ Cash payments to suppliers.
Answer: (current period purchases × current period payment rate) + cash
paid on previous period purchases
⩥ Cost Variance.
Answer: Difference between actual costs and budgeted costs
,⩥ Contribution Margin.
Answer: = Sales Revenue - Variable Costs
The difference between total sales and variable costs; the portion of sales
revenue available to cover fixed costs and provide a profit.
⩥ Target Income.
Answer: = Sales Revenue - Variable Costs - Fixed Costs
A profit level desired by management.
⩥ At break-even.
Answer: Target income = 0
⩥ Sales Revenue.
Answer: = Sales Price x Number of Units
⩥ Variable Costs.
Answer: = Variable Cost per Unit x Number of Units
Costs that change in total in direct proportion to changes in activity
level.
⩥ Variable Cost Ratio x Sales Revenue.
,Answer: Variable Costs
⩥ Unit-level activities.
Answer: Activities that take place each time a unit of product is
produced.
⩥ Batch-level activities.
Answer: Activities that take place in order to support a batch or
production run, regardless of the size of the batch.
⩥ Product-line Activities.
Answer: Activities that take place in order to support a product line,
regardless of the number of batches or individual units produced.
⩥ cost pool.
Answer: Total cost being generated by a specific overhead cost activity.
⩥ cost driver.
Answer: A numerical measure used to reflect the amount of a specific
cost that is associated with a particular activity
⩥ Activity rate.
, Answer: The amount of the estimated cost pool divided by the estimated
number of cost driver events
⩥ How do expenses impact the accounting equation?.
Answer: Expenses decrease owners' equity
⩥ Purpose of the accounting cycle?.
Answer: To turn information about transactions into financial statements
⩥ How is gross profit computed?.
Answer: Sales minus cost of good sold
⩥ Which type of account is retained earnings?.
Answer: Equity
⩥ How does a classified balance sheet provide useful info to a decision
maker?.
Answer: It distinguishes between current and long-term assets
⩥ What are the three primary functions that company managers use
managerial accounting info for?.
Answer: Planning, controlling, evaluating
