ACCT 526 Final 2026 | Complete Exam Prep | Questions &
Answers | A+ Guide
1. Overhead costs are assigned to production using an overhead application
rate, whereas no such application rate is used to assign the costs of DM and
DL to production. The reason for this difference in procedures is that:
Independent of the type and number of units manufactured but a
casual factor in the amount of overhead cost incurred
Independent of both the number and the type of products
manufactured and also independent of the amount of overhead costs
incurred
Overhead is an indirect cost which cannot be traced easily and
directly to specific units of product.
Traceable directly to the products manufactured but independent of
the amount of overhead costs incurred
2. The contribution margin ratio:
Is the same as the contribution margin per unit.
Is the percent of each sales dollar that remains after deducting the
unit variable cost.
Is the percent of each sales dollar that remains to cover the variable
and fixed costs.
Is the percent of each sales dollar that remains after deducting the
unit fixed cost.
3. How does a 45% contribution margin ratio affect a company's pricing
strategy?
A 45% contribution margin ratio indicates that variable costs are
higher than fixed costs.
, A 45% contribution margin ratio shows that the company has no fixed
costs.
A 45% contribution margin ratio suggests that for every dollar of
sales, 45 cents contribute to covering fixed costs and profit.
A 45% contribution margin ratio means the company is operating at a
loss.
4. The advantages of decentralization are similar to the management
accounting concept of:
Productive Cost
Management by exception
Participative Budgeting
Responsibility Center
5. In a job order costing system, the amount of overhead cost that has been
applied to a job that remains incomplete at the end of the period is:
Closed to costs of goods
Part of the ending balance of the WIP inventory account
Transferred to finished goods at the end of the period
Is deducted on the income statement as over applied overhead
6. Various budgets are included in the master budget cycle. One of these
budgets is the production budget. Which of the following most inclusively
describes the production budget?
It includes required direct labor hours.
It includes required material purchases.
, It aggregates the monetary details of the operating budget.
It is calculated from the desired ending inventory and the sales
forecast.
7. Cash flow from financing activities is the portion of net cash
generated from net issuance of debt and equity
none of the above
generated from buying or selling assets
generated from the firm's income and working capital
8. A well prepared budget can help benefit the company in all of the following
ways except:
Set performance standards
Serving as a guide
Guarantee profit level
Allocate resources
9. What is one key advantage of regression analysis in cost estimation?
It eliminates the need for historical data.
It is simpler and requires less data to perform.
It focuses only on the highest and lowest data points.
It provides a more accurate estimation of costs by considering all
data points.
10. If a plant is operating at full capacity and receives a one-time opportunity to
accept an order at a special price that is below its usual selling price, then
, select an answer and submit. For keyboard navigation, use the up/down
arrow keys to select an answer.
The order will likely be rejected
The order will likely be accepted
Only variable costs are relevant
Fixed costs are not relevant
11. If a company issues new shares and pays off a portion of its long-term debt,
how would these actions affect its net cash flow from financing activities?
The issuance of new shares would increase cash inflow, while
paying off debt would decrease cash outflow, resulting in a net
increase.
Both actions would decrease net cash flow from financing activities.
The issuance of new shares would have no effect, while paying off
debt would decrease cash flow.
Both actions would increase net cash flow from operating activities.
12. Which would be a consideration when accepting special orders?
Available capacity to fill the order
If price will cover incremental costs of filling the order
If the order will affect regular sales in the long run
All of the above
13. Describe the main difference between the budgeting process for a
merchandiser and a manufacturer.
A manufacturer only budgets for labor costs.
Answers | A+ Guide
1. Overhead costs are assigned to production using an overhead application
rate, whereas no such application rate is used to assign the costs of DM and
DL to production. The reason for this difference in procedures is that:
Independent of the type and number of units manufactured but a
casual factor in the amount of overhead cost incurred
Independent of both the number and the type of products
manufactured and also independent of the amount of overhead costs
incurred
Overhead is an indirect cost which cannot be traced easily and
directly to specific units of product.
Traceable directly to the products manufactured but independent of
the amount of overhead costs incurred
2. The contribution margin ratio:
Is the same as the contribution margin per unit.
Is the percent of each sales dollar that remains after deducting the
unit variable cost.
Is the percent of each sales dollar that remains to cover the variable
and fixed costs.
Is the percent of each sales dollar that remains after deducting the
unit fixed cost.
3. How does a 45% contribution margin ratio affect a company's pricing
strategy?
A 45% contribution margin ratio indicates that variable costs are
higher than fixed costs.
, A 45% contribution margin ratio shows that the company has no fixed
costs.
A 45% contribution margin ratio suggests that for every dollar of
sales, 45 cents contribute to covering fixed costs and profit.
A 45% contribution margin ratio means the company is operating at a
loss.
4. The advantages of decentralization are similar to the management
accounting concept of:
Productive Cost
Management by exception
Participative Budgeting
Responsibility Center
5. In a job order costing system, the amount of overhead cost that has been
applied to a job that remains incomplete at the end of the period is:
Closed to costs of goods
Part of the ending balance of the WIP inventory account
Transferred to finished goods at the end of the period
Is deducted on the income statement as over applied overhead
6. Various budgets are included in the master budget cycle. One of these
budgets is the production budget. Which of the following most inclusively
describes the production budget?
It includes required direct labor hours.
It includes required material purchases.
, It aggregates the monetary details of the operating budget.
It is calculated from the desired ending inventory and the sales
forecast.
7. Cash flow from financing activities is the portion of net cash
generated from net issuance of debt and equity
none of the above
generated from buying or selling assets
generated from the firm's income and working capital
8. A well prepared budget can help benefit the company in all of the following
ways except:
Set performance standards
Serving as a guide
Guarantee profit level
Allocate resources
9. What is one key advantage of regression analysis in cost estimation?
It eliminates the need for historical data.
It is simpler and requires less data to perform.
It focuses only on the highest and lowest data points.
It provides a more accurate estimation of costs by considering all
data points.
10. If a plant is operating at full capacity and receives a one-time opportunity to
accept an order at a special price that is below its usual selling price, then
, select an answer and submit. For keyboard navigation, use the up/down
arrow keys to select an answer.
The order will likely be rejected
The order will likely be accepted
Only variable costs are relevant
Fixed costs are not relevant
11. If a company issues new shares and pays off a portion of its long-term debt,
how would these actions affect its net cash flow from financing activities?
The issuance of new shares would increase cash inflow, while
paying off debt would decrease cash outflow, resulting in a net
increase.
Both actions would decrease net cash flow from financing activities.
The issuance of new shares would have no effect, while paying off
debt would decrease cash flow.
Both actions would increase net cash flow from operating activities.
12. Which would be a consideration when accepting special orders?
Available capacity to fill the order
If price will cover incremental costs of filling the order
If the order will affect regular sales in the long run
All of the above
13. Describe the main difference between the budgeting process for a
merchandiser and a manufacturer.
A manufacturer only budgets for labor costs.
