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UT ACC 225 - Practice Final Exam for AC 225

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1Practice Final Exam for AC 225 Managerial AccountingAnswers will be released on FRIDAY.NOTE: These questions will give you practice on answering questions in the format of the final exam, which has 60 to 70 multiple choice questions. You should not depend on reviewing these specific questions alone to review all of the topics on the Final Exam Review also posted in D2L.Chapter 11. Managerial Accounting and Financial Accounting differ in the following way:A. Financial Accounting emphasizes forecasts of future performance.B. Financial Accounting summarizes information for the company as a whole.C. Financial Accounting is private information for company managersD. Financial Accounting emphasizes timeliness over precision.Discussion: Managerial accounting emphasizes providing information about segments and products within a company, rather than the company as a whole. Financial accounting creates financial statements that must present all components under common control. 2. Common users of managerial accounting reports include the following:A. Operations manager and loan officerB. Chief financial officer and public shareholderC. Public shareholder and loan officerD. Chief financial officer and operations managerDiscussion: Managerial accounting is used by company insiders. Loan officers work for a bank. Shareholders are the external owners of a business. 3. The management function of controlling is carried out through the use of A. A performance report that compares budgeted to actual results.B. A reconciliation of the beginning and ending retained earnings balances.C. A schedule of cash collections and cash paymentsD. A forecast of next period’s production.Discussion: The control function is evaluating the results of company actions. Only A involves both measuring results and comparison to determine whether the results are favorable or unfavorable. 4. Management accounting is used byA. Human resource employees who need to plan hiringB. Marketing employees who make decisions on profit achievable through an advertising campaignC. Accounting employees who make budget recommendations.D. All of the above.5. The CMA certification requiresA. A rigorous professional exam onlyB. Experience in Financial management only.C. A rigorous professional exam and experience in financial management only.2D. An accounting degree and a rigorous professional exam and experience in financial management.Discussion: Individuals with any college major can become Certified Management Accountants.6. Guidelines for ethical behavior for management accountants requireA. Management accountants maintain professional competence.B. Management accountants disclose confidential information to competitors.C. Management accountants eliminate all potential limitations before communicating recommendations.D. Management accountants ignore conflicts of interest.Discussion: Competence is one ethical value in the Institute of Management Accountants ethical standards. Management accountants maintain confidentiality unless disclosure is required by law. Full disclosure of limitations is required, but no one can eliminate all limitations on recommendations. Management accountants disclose conflicts of interest.7. Institute of Management Accountants supports ethical practices by A. Staffing an ethics hotline for its membersB. Representing its members in legal casesC. Investigating corporate ethical lapsesD. Requiring members to report unethical conduct to their supervisors.Discussion: The Institute of Management Accountants has an ethical hotline to provide an objective consultation to members.Chapter 21. The wages of factory maintenance personnel would usually be considered to be aA. Direct labor costB. Manufacturing overhead costC. Administrative costD. Selling costDiscussion: Maintenance is an indirect labor cost, which is a part of manufacturing overhead. 2. Conversion costs includeA. Manufacturing overhead costsB. Direct material costsC. Sales commission costsD. Advertising costsDiscussion: Conversion costs include the product costs of direct labor and manufacturing overhead. 3. Which of the following costs is an example of a period rather than a product cost?A. Depreciation on production equipmentB. Salaries of salespersonsC. Wages of production machine operators3D. Insurance on production equipmentDiscussion: A, C, and D are product costs; salaries within selling & administrative costs are period costs.4. Last month 10,000 units of a product were manufactured, and the total cost per unit was $60. At this level of production the variable cost is $30 per unit and the fixed cost is $30 per unit. If 10,500 units are manufactured the next month, and the costs remain within the same relevant range,A. Total variable cost will remain unchanged.B. Fixed costs will increase in totalC. Variable cost per unit will increaseD. Total cost per unit will decreaseDiscussion: Numerically the unchanging fixed cost is $30 * 10,000 = $300,000. The cost for 10,500 units = 10,500 units * $30 variable cost + fixed cost of $300,000 = $315,000 + $300,000 = $615,000. The total cost per unit is $615,000 / 10,500 units = $58.57. Alternatively, when production increases, fixed costs PER UNIT decrease because the same fixed cost is spread over more units, so total cost per unit will decrease.5. The following costs were incurred in September: Direct materials $39,000Direct labor 23,000Manufacturing overhead 17,000Selling expenses 14,000Administrative expenses 27,000Prime costs during the month totaledA. $79,000B. $120,000C. $62,000D. $40,000Discussion: Prime costs ae direct labor and direct material costs.6. ABC Corporation sells its product for $195.70 per unit. In 2015 the company had total sales in units of6,000. The total costs were the following:Variable cost of sales $457,800Fixed cost of sales 100,000Variable selling & administrative costs 108,500Fixed selling & administrative costs 512,400What is the best estimate of the total contribution margin?A. $4,600B. $507,800C. $607,900D. $616,400Discussion: Total Contribution Margin = Total Sales – Total Variable Costs; Total Sales = 195.70 * 6000 = 1174200. Total Variable Costs = 457,800 + 108,500 = 566,300. Contribution Margin = 1171200-566300 =607,90047. Supply costs at ABC Corporation's chain of gyms are listed below:Management believes that supply cost is a mixed cost that depends on client-visits. Using the high-low method to estimate the variable


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