Managerial Accounting Practice Quiz
Managerial Accounting Practice Quiz
Joe Studio
Pacific Gear, Inc. uses a periodic inventory system. The beginning balance and purchases are:
Jan 1: Beginning Inventory | 500 units @ $10
Jan 15: Purchase | 1,000 units @ $12
Jan 25: Purchase | 500 units @ $15
If 1,600 units were sold in January, what is the Cost of Goods Sold (COGS) and Ending Inventory using the LIFO method?
$20,000 ; $5,000
$20,700 ; $4,300
$20,200 ; $4,800
$19,000 ; $6,000
Using the data from Question 1, what is the COGS and Ending Inventory using the FIFO method?
$21,000 ; $4,000
$18,500 ; $6,500
$19,200 ; $5,800
$20,000 ; $5,000
Nova Tech has the following monthly data:
Sales: $60,000 (10,000 units)
Variable Costs: $36,000
Fixed Costs: $15,000
If sales volume increases by 800 units, what is the effect on Net Income?
Increase by $4,800
Increase by $2,880
Increase by $1,920
Increase by $1,200
Which of the following is considered a sunk cost and therefore irrelevant to future decision-making?
Projected labor costs for a new project
The original purchase price of an old machine
Potential rental income from a factory wing
The variable cost of materials
When deciding whether to outsource a component (Make vs. Buy), which of the following is usually ignored?
The purchase price from the supplier
The direct labor cost saved
Unavoidable fixed overhead
The opportunity cost of the factory space
A capital investment project should be rejected if the Net Present Value (NPV) is:
Positive
Zero
Negative
Equal to the initial investment
Summit Corp is considering a $120,000 investment with a 10% cost of capital. Cash flows are:
Year 1: $50,000
Year 2: $50,000
Year 3: $50,000 What is the NPV?
$150,000
$30,000
$4,342.60
$12,450.15
If Actual Manufacturing Overhead is $85,000 and Applied Manufacturing Overhead is $90,000, the overhead is:
Underapplied
Overapplied
Underused
Overused
The following occurred:
Sale of land: $400,000
Purchase of equipment: $150,000
Paid dividends: $20,000
Issued bonds: $100,000 What is the Net Cash Provided by Investing Activities?
$350,000
$330,000
$250,000
$500,000
In a job order cost system, Indirect Materials used in the factory are debited to:
Work in Process
Raw Materials
Manufacturing Overhead
Finished Goods
In a job order cost system, the transfer of completed goods from the factory to the warehouse is a debit to:
Work in Process
Cost of Goods Sold
Finished Goods
Manufacturing Overhead
The salary of a Factory Supervisor is classified as:
Direct Labor
Manufacturing Overhead
Administrative Cost
Selling Cost
The commission paid to a sales representative is classified as a:
Product Cost
Period Cost (Selling)
Manufacturing Overhead
Administrative Cost
Within the relevant range, if production volume decreases:
Total fixed costs will decrease
Fixed cost per unit will increase
Variable cost per unit will decrease
Total variable costs will remain constant
The Sales Budget is the starting point for the master budget. Which budget is prepared immediately after the Sales Budget?
Cash Budget
Production Budget
Direct Labor Budget
Budgeted Balance Sheet
Atlas Co. wants to sell 5,000 units. They have 800 units in beginning inventory and want 1,000 units in ending inventory. How many units must be produced?
4,800
5,200
6,000
5,000
Fixed Costs = $200,000; Sales Price = $20; Variable Cost = $12. What is the Breakeven Point in Units?
10,000
16,667
25,000
50,000
What is the Contribution Margin Ratio for the company in Question 17?
60%
40%
25%
80%
A cost that changes in total in direct proportion to changes in activity level is a:
Fixed Cost
Variable Cost
Mixed Cost
Sunk Cost
Which of the following would be found on a Budgeted Income Statement but NOT on a Cash Budget?
Cash sales
Payments for materials
Depreciation Expense
Dividends paid