1		A major difference between financial accounting and managerial accounting relates to differences in the users. Related to Smith Manufacturing Company, which of the following best describes a user of managerial accounting information?
			A)	Credit Manager of a vendor for Smith Manufacturing
			B)	Purchasing manager for Smith Manufacturing
			C)	Bank manager reviewing a loan application from Smith Manufacturing
			D)	IRS divisional manager reviewing the tax return of Smith Manufacturing
2		When comparing managerial accounting information with financial accounting information it is expected that managerial accounting information would
			A)	be based upon GAAP.
			B)	emphasize information on the company as a whole.
			C)	present estimates of future financial operations.
			D)	include an analysis of historical cost.
3		Alex Company spent $2,500 cash to build 10 desks: $940 for materials, $1,270 for a carpenter’s labor, and $290 for tools used to make the desks. None of the desks have been sold. What is the amount of Alex Company’s expense?
			A)	$0
			B)	$1,270
			C)	$1,560
			D)	$2,500
4		Which of the following is not considered to be a product cost?
			A)	Cost of wood used in making a table top
			B)	Cost of labor to assemble a table
			C)	Cost of company president’s salary
			D)	Cost of electricity to operate a machine used to sand wood for a table
5		The costs of building a chair are accumulated in what account until the chair is sold?
			A)	Materials
			B)	Labor
			C)	Finished goods inventory
			D)	Cost of goods sold
6		Which of the following costs are product costs?
			A)	General operating costs
			B)	Selling and administrative costs
			C)	Material costs
			D)	Interest costs
7		All of the following are components of manufacturing product cost except:
			A)	direct materials.
			B)	direct labor.
			C)	manufacturing overhead.
			D)	selling and administrative costs.
8		Johnson Manufacturing paid $5,000 for materials, $4,000 for production labor, and $5,000 for sales salaries. It also had $3,500 depreciation of manufacturing equipment and $2,500 depreciation of office furniture. What is the average cost per unit to produce 50 units?
			A)	$400
			B)	$350
			C)	$300
			D)	$250
9		Examples of overhead costs related to producing tables would not include:
			A)	the production supervisor’s salary.
			B)	the cost of nails.
			C)	the cost of a wood tabletop.
			D)	depreciation of manufacturing equipment.

Use the following information to answer questions 10 - 13.

1. Acquired $30,000 cash by issuing common stock.
2. Paid $10,000 for all material used in starting and completing 50 products this period.
3. Paid $6,000 for administrative salaries.
4. Paid $8,000 for wages of production workers.
5. Depreciation of office furniture $2,500.
6. Depreciation of manufacturing equipment $3,500.
7. Collected $28,000 in cash for all sales made during the period.

10		What was the total product cost for the period?
			A)	$30,000
			B)	$24,500
			C)	$24,000
			D)	$21,500
11		If out of the 50 units completed 5 units are in ending inventory, what is the amount of ending inventory?
			A)	$28,000
			B)	$21,500
			C)	$19,350
			D)	$2,150
12		What was the gross margin for the period?
			A)	$2,150
			B)	$8,650
			C)	$28,000
			D)	$30,000
13		How much is Cash Flow from Operating Activities?
			A)	$58,000 inflow
			B)	$28,000 inflow
			C)	$4,000 inflow
			D)	$(3,000) outflow
14		Of the following costs which is most likely not assigned to the cost of the product through cost allocation?
			A)	Indirect material
			B)	Indirect labor
			C)	Direct labor
			D)	Depreciation
15		Due to an error in processing invoices some product costs were treated as general, selling, and administrative costs. Which of the following indicates how this error affects the financial statements, assuming production exceeded sales during the period?
			A)	Cash flows from operating activities are overstated.
			B)	Inventory is understated.
			C)	Net income is overstated.
			D)	Gross margin is understated.
16		Standards of ethical conduct for management accountants include all of the following except:
			A)	competence.
			B)	confidentiality.
			C)	integrity.
			D)	independence.
17		A key aspect in avoiding unethical or illegal conduct is awareness of the factors common in past cases. The common factors involved with such behavior include all of the following except:
			A)	the existence of a strong internal control environment.
			B)	the existence of a secret problem.
			C)	the presence of an opportunity.
			D)	the capacity for rationalization.
18		The best example of an upstream cost is:
			A)	advertising.
			B)	research and development.
			C)	sales commissions.
			D)	bad debts.
19		Cost plus pricing decisions must take into account all of the following costs except:
			A)	product costs.
			B)	upstream costs.
			C)	regulatory costs incurred by the federal government.
			D)	downstream costs.
20		All of the following are true except:
			A)	managers of all companies analyze costs to control material, labor, and overhead.
			B)	managers of all companies analyze costs to properly value inventory.
			C)	managers of all companies need to improve quality.
			D)	managers of all companies need to improve productivity.
21		Identification of best practices used by world class competitors is known as:
			A)	activity-based management.
			B)	value-based management.
			C)	benchmarking.
			D)	value chain analysis.
22		A JIT inventory system results in all of the following except:
			A)	reduced inventory holding costs.
			B)	reduced product quality.
			C)	improved efficiency.
			D)	improved customer satisfaction.
23		Total Quality Management (TQM) includes all of the following except:
			A)	a systematic problem-solving philosophy that encourages front-line workers to achieve zero defects.
			B)	an organizational commitment to achieving customer satisfaction.
			C)	a commitment to top quality regardless of the cost.
			D)	continuous improvement through an ongoing process through which employees learn to eliminate waste.
24		Activity-Based Management (ABM) is concerned with all of the following except:
			A)	value chain.
			B)	value-added taxation.
			C)	value-added activities.
			D)	nonvalue-added activities.
25		A just-in-time inventory (JIT) system is facilitated by:
			A)	most-favored buying status.
			B)	most-favored customer status.
			C)	most-favored delivery status.
			D)	most-favored payment status.