Answers Managerial Accounting Prelim Examination

St.
Jude Thaddeus Institute of Technology

Borromeo Street, Surigao City
Tel. No. (086) – 826 – 6112
Email Add: [email protected]
PRELIM EXAM
1st Semester S.Y 2023-2024
MANAGERIAL ACCOUNTING
Good for 2 hours. WRITE LEGIBLY

Part I. Classification
1. The items that follow are associated with a management accounting information
system. (4 points)
a. Incurrence of environmental costs
b. Preparing a report that summarizes environmental costs
c. A statement of the cost of goods manufactured
d. Usage of direct labor
e. Providing information for decision making
f. Incurrence of quality costs
g. Measuring the cost of design
h. Providing information for planning and control
i. A report showing the trend in quality costs
j. Using power for manufacturing a product
k. Costing out products and customers
l. A report that compares actual costs of materials with expected costs
m. Measuring the costs of lost sales due to defective products
n. Providing cost information for decision making
Required:
Classify the items into one of the following categories:
1. Inputs
2. Processes
3. Outputs
4. System objectives
Write the letter of the associated items beside the categories it should be classified.
2. The actions that follow are associated with a firm’s accounting information system. (14 points)
a. Preparing a report that details profit by customer
b. Preparing an income statement that complies with generally accepted accounting
principles
c. Preparing a monthly cash budget
d. Voluntarily reporting safety costs to potential and existing investors
e. Research to determine how to report an uninsured facility destroyed by flood
f. Reporting on the trends in defect rates to the plant manager
g. Determining the cost of dropping a product
h. Determining the cost of producing a new product
i. Determining the cost of bad debts for the balance sheet
j. Assessing post purchase costs
k. A report that shows a trend in warranty costs
l. Reporting the value of marketable securities
m. Determining how to consolidate the financial reports of two subsidiaries
n. A report comparing the activity-based product costs with traditional product costs
Required:
Classify the above actions as belonging either to management accounting or financial

account
Part II. Multiple Choice (1 point each)
1. Management accounting is best characterized by which of the following statements?

A. It produces (principally) objective and verifiable financial information.
B. It has a historical orientation.
C. It focuses on overall firm performance, providing an aggregated viewpoint.
D. It is subject to generally accepted accounting principles.
E. None of the above
2. Which of the following statements about managerial accountants is false?
A. Managerial accountants more and more are considered "business partners."
B. Managerial accountants often are part of cross-functional teams.
C. An increasing number of organizations are segregating managerial accountants in separate
managerial-accounting departments.
D. In a number of companies, managerial accountants make significant business decisions and
resolve operating problems.
E. The role of managerial accountants has changed considerably over the past decade.
3. Services differ from tangible products in that
A. Services cannot be stored for future use.
B. Producers and buyers of services must be in direct contact for an exchange.
C. There is less variation in the performance of services.
D. Buyers cannot see, feel, hear, or taste a product before it is bought
E. Only A and B
4. Kolaser Company has the following production data for the month of July:
Direct labor ₱250,000
Actual overhead 350,000
Direct materials used 400,000
Warehousing 40,000
Kolaser’s conversion cost for July is

A. ₱600,000.
B. ₱640,000.
C. ₱650,000.
D. ₱750,000.
5. Refer to the data in Question 4. Kolaser’s prime cost for July is
A. ₱600,000.
B. ₱640,000.
C. ₱650,000.
D. ₱750,000.
6. Activity-based management differs from functional-based management on which of the following

dimensions?
A. It is more tracing intensive.
B. It provides detailed activity information.
C. It uses both unit-level and non-unit-level drivers.
D. It focuses on managing activities.
E. All of the above.
7. Which of the following statements is true?

A. The word "cost" has the same meaning in all situations in which it is used.
B. Cost data, once classified and recorded for a specific application, are appropriate for use in any
application.
C. Different cost concepts and classifications are used for different purposes.
D. All organizations incur the same types of costs.
E. Costs incurred in one year are always meaningful in the following year.
Part III. Problem (25 points)
ABCD Company produced 5,000 loveseats during the year. The loveseats sell for ₱650 each.
ABCD had 600 loveseats in finished goods inventory at the beginning of the year. At the end of the year,
there were 800 loveseats in finished goods inventory. ABCDS’s accounting records provide the following
information:
Purchases of materials ₱675,000

Direct materials inventory, December 31, 2007 93,600
Direct materials inventory, December 31, 2008 133,600
Direct labor 400,000
Indirect labor 80,000
Rent, factory building 84,000
Supplies used in production 14,600
Depreciation, factory equipment 120,000
Utilities, factory ₱ 23,912
Salary, sales supervisor 180,000
Commissions, salespersons 360,000
General administration 600,000
Work-in-process inventory, December 31, 2007 26,082
Work-in-process inventory, December 31, 2008 29,992
Finished goods inventory, December 31, 2007 160,000
Finished goods inventory, December 31, 2008 228,200
Required
1. Prepare a statement of cost of goods manufactured. (9 points)
2. Compute the average cost of producing one unit of product in 2008 (rounded
to the nearest peso). (9 points)
3. Prepare an income statement for external users (7 points)
1.
3.
END OF PRELIM EXAMINATION______________________________________________________
GOD BLESS.
“Education’s purpose is to replace an empty mind with an open one.”

― Malcolm Forbes

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St.

Jude Thaddeus Institute of Technology

Good for 2 hours. WRITE LEGIBLY

Classify the above actions as belonging either to management accounting or financial

Part II. Multiple Choice (1 point each)

1. Management accounting is best characterized by which of the following statements?

Kolaser’s conversion cost for July is

6. Activity-based management differs from functional-based management on which of the following

7. Which of the following statements is true?

Part III. Problem (25 points)

Purchases of materials ₱675,000

END OF PRELIM EXAMINATION______________________________________________________

“Education’s purpose is to replace an empty mind with an open one.”

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