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| Section | Objectives |
|---|---|
| Managerial Accounting for Decision Making | - Cost Behavior
|
| Financial Accounting Fundamentals | - Accounting Principles
|
| Business Decision Support | - Performance Measurement
|
1. Last year, X Corporation had sales of $500,000 and total expenses of $300,000. A manager of the company is entitled to get a sales commission of 10% of net profit.
What amount of sales commission is to be recognized at year-end?
A) $30,000
B) $50,000
C) $10,000
D) $20,000
2. How does management accounting differ from financial accounting?
A) Management accounting presents an unbiased view of a company's economic performance
B) Management accounting is not used to gain a competitive advantage in the marketplace
C) Management accounting is restricted to providing financial rather than nonfinancial data
D) Management accounting is used primarily for internal planning, control, and evaluation
3. Which current asset on a balance sheet appears first in the traditional category order for U.S.-based companies?
A) Inventory
B) Prepaid expenses
C) Cash
D) Accounts receivable
4. Which two details can management determine through a cost-volume-profit analysis?
Choose 2 answers.
A) The impact that a change in cost would have on a business organization's profit margin in the future
B) The impact of past income tax costs on a business organization's profit margin
C) The impact of past transactions on a business organization's profit margin
D) The impact of a change in a business organization's number of units sold to reach a certain profit margin in the future
5. Given the following information:
Pairs of shoes expected to be produced = 1,950,000
Pairs of shoes produced = 2,500,000
Overhead rate = $0.75
What is the amount of applied overhead?
A) $1,875,000
B) $412,500
C) $1,462,500
D) $550,000
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: D | Question # 3 Answer: C | Question # 4 Answer: A,D | Question # 5 Answer: A |
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