This document contains a 25 question multiple choice exam on management accounting concepts. The exam covers topics such as the definition of management accounting, types of information managers need, uses of financial information, units of measurement, product versus period costs, inventory costing, depreciation, job order versus process costing systems, full product costs, supply chain and value chain concepts, cost behavior analysis, budgeting, and stakeholders. The questions test understanding of key accounting concepts as applied to management decision making.

1. BU330 Accounting for managers Exam Part 1
Question-1
Management accounting
A) Deals primarily with people and organizations outside of the business entity.
B) Requires only periodic reporting on a regular basis.
C) Uses any type of useful measurement unit, including physical as well as monetary measures.
D) Deals only with the double-entry recording system
Question-2
Which of the following type of information is not essential for a manager to run a business
effectively?
Product or service costing information
Data for planning and controlling of operations
Special reports and analysis to support decisions
Quote of the current price of the company's stock
Question-3
Accumulating, interpreting, and reporting financial information is important for:
a. service-related firms only.
b. manufacturing firms only.
c. virtually all types of organizations.
d. not-for-profit organizations only.
4. The unit of measurement used in management accounting is:
a. primarily the historical dollar.
b. usually current replacement cost.
c. any measurement unit that is useful in a particular situation.
d. the measurement unit used by competing companies.
5. Which of the following would not be included in the cost of a manufactured Product?

2. a. Cost to ship products to a customer
b. Cost of factory machinery used in production
c. Cost to design the product
d. Plant supervisor's salary
6. Which of the following is not included in the purchase cost of merchandise inventory?
a. Purchase discounts
b. Overhead costs
c. Freight-in costs
d. Purchase returns and allowances
7. Depreciation expense could be:
a. a period cost.
b. a product cost.
c. a fixed cost.
d. All of the above
8. The three costs in every product are:
a. direct materials, work in process, and overhead.
b. direct materials, work in process, and finished goods.
c. direct materials, direct labor, and overhead.
d. direct materials, direct labor, and period costs.
9. The type of product costing system used by a company is dictated by the:
a. project manager.
b. production process.
c. company president.
d. plant supervisor.
10. Product costs appear on the income statement in the form of:
a. cost of goods sold.

3. b. materials inventory.
c. sales commissions.
d. None of the above
11. If there is a debit balance in the Factory Payroll account at the end of the accounting period,
it represents:
a. an amount because applied payroll was greater than actual payroll.
b. an amount because actual payroll was greater than applied payroll.
c. labor costs which have not yet been distributed.
d. an amount which should be charged to Cost of Goods Sold.
12. A process costing system assigns costs to products:
a. individually.
b. according to which products can absorb the most costs and still be profitable.
c. randomly.
d. equally.
13. Which of the following accurately describes a difference between job order and process
costing systems?
a. In job order costing systems, overhead costs are treated as product costs, whereas in process
costing systems, overhead costs are treated as period costs.
b. Job order costing systems do not need to assign costs to production, whereas process costing
systems do.
c. In job order costing systems, costs are traced to products, whereas in process costing systems,
a FIFO method may be used.
d. Since costs are assigned to products in a job order costing system, selling costs are treated as
product costs in the job order costing system, whereas they are treated as period costs in process
costing systems.
14. Which of the following statements is true?
a. The Work in Process Inventory account is the focal point of process costing.
b. To compute unit costs using the FIFO costing method, total costs of direct materials, direct
labor, and overhead that have been accumulated in the Work in Process Inventory account or
accounts are divided by the units worked on during the period.

4. c. Equivalent units usually are computed for direct materials and manufacturing overhead
combined.
d. Labor costs are accounted for differently from manufacturing overhead costs in a process
costing system.
15. Full product cost includes:
a. all direct labor and direct material costs and all production and nonproduction costs.
b. only nonproduction costs.
c. only the costs of direct material.
d. only the costs of direct labor.
16. Customer relations are usually part of:
a. the supply chain.
b. the value chain.
c. both the value chain and the supply chain.
d. neither the value chain nor the supply chain.
17. Which of the following activities would be part of the supply chain of a manufacturer?
a. Shipping
b. Customer service
c. Parts manufacturing
d. Research and development
18. Nonvalue-adding activities are:
a. unnecessary activities.
b. included in the value chain of activities.
c. all wasteful and targeted for elimination.
d. not all wasteful and may not be targeted for elimination.
19. Which of the following would not require the use of cost behavior analysis?
a. Transferring production costs from one department to another
b. Projecting anticipated costs of a new project

5. c. Buying an existing business
d. Changing an existing product or service
20. Which of the following statements most accurately explains the behavior of costs?
a. There is no norm; rather, costs can be fixed, variable, or a combination of both.
b. The majority of costs are variable per unit of production.
c. The majority of costs are fixed per unit of production.
d. Costs can be fixed or variable but usually not a combination of both.
21. Which of the following statements is true regarding fixed and variable costs?
a. Both costs are constant when considered on a total basis.
b. Variable costs are constant in total, and fixed costs are constant per unit.
c. Both costs are constant when considered on a per unit basis.
d. Fixed costs are constant in total, and variable costs are constant per unit.
22. Budgets:
a. should contain both revenues and expenses.
b. contain as much information as possible.
c. are presented in dollars only; nondollar data should be excluded.
d. are synonymous with managing an organization.
23. Budgets identify, gather, summarize, and communicate:
a. financial data only.
b. financial and nonfinancial data.
c. nonfiriancial data only.
d. None of the above
24. After management has set short-term goals, the budgeting process typically starts with:
a. a clearly defined timetable of events.
b. input only from the accounting personnel.
c. the naming of an efficient coordinator or director.

6. d. a set of procedures or instructions.
25. Which of the following represents a basic stakeholder of an organization?
a. The account receivable clerk of the organization
b. A vice president of the organization
c. A line supervisor of the organization
d. All of the above
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