Atkinson Faculty of Liberal and Professional Studies
School of Administrative Studies
ADMS # 2510
Introduction to Management Accounting
MID-TERM EXAMINATION # 2
Chapters 4, 5, 6
SECTION C Thursday 7:00 – 10:00 pm Professor: Joe Nemi
Question # 1 10
Question # 2 10
Question # 3 20
Please write on the FRONT pages of your EXAMINATION BOOKLET
Please ensure that you read the notes on the next page.
1 NOTES REGARDING TEST ADMINISTRATION:
Read carefully, THINK about your approach, and Good Luck!
Answers must be submitted in numerical order.
(I.e. Your attempted clearly laid out solution to Question # 1 should be
first, then follow with solutions to Question # 2, and # 3.)
Examination Booklets are provided for your organized responses,
THE TEST PAPER IS YOURS TO KEEP.
IF YOU CANNOT FOLLOW THESE INSTRUCTIONS YOUR
PROFESSOR WILL NOT GRADE YOUR PAPER.
This midterm consists of 3 questions over 2 category types;
i). Category A type:
MULTIPLE CHOICE; Select th“best answer” for each of the
followiunrelated multiple choice questions.
For example, if (a) is the best answer for item (1),
WRITE DOWN “ 1). a" in yourExamination Booklet .
Failure to WRITE DOWN your answers as above in your
Examination Booklet for whatever reason will result in
a zero grade in the multiple choice section.
If more than one answer is given for any question, that
question will not be marked.
Incorrect answers will be marked as zero.
No account will be taken of any explanations you offer.
ii). Category B type:
A Comprehensive analytical and theoretical problem.
2 Question # 1:
(1 Mark Each)
1). A normal cost system:
a). Is more accurate than a standard cost system.
b). Requires less information prior to production than an actual cost system.
c). Allows the determination of product cost at an earlier time than does an
actual cost system.
d). Records norms in the accounting records against which actual costs can
2). A process costing system would most likely be found in which of the
a). A defense contractor that makes tanks, stun guns, and laser weapons as
well as other commercial products.
b). A soft-drink manufacturer that makes six types of colas.
c). A software firm that designs programs for specific customer demands.
d). An oil exploration firm.
3). In a department that uses process costing, equivalent units of production
a). Units completed plus the units in ending work in process inventory.
b). Units transferred out.
c). Units remaining in work in process at the end of the period.
d). Number of units that could have been completed if all work would have
been used to produce whole units.
3 4). An operations flow document:
a). Traces the quantity and cost of materials flowing through an operation.
b). Specifies the tasks needed to make a product and the times allowed for
c). Flowcharts the shortest path by which to arrange machinery for
completion of a product.
d). Traces the network of control points from receipt of a customer's order to
delivery of the product.
5). The traditional labour efficiency variance calculation motivates managers
a). Ignore quality concerns by minimizing the time spent in production.
b). Empower workers to learn to perform multiple tasks.
c). Employ the most skilled workers so tasks can be performed in the least
amount of time.
d). All of the above are true.
6). A process map:
a). Depicts the set of instructions by which customers make their post-
delivery assembly of a product.
b). Shows the process by which a product is created during product
planning, preliminary design, and the detailed design phase.
c). Presents a product’s flow through its distribution channel distribution.
d). Indicates all steps taken in producing a product.
4 7). Which of the following is a non-value-added activity in a manufacturing
8). Activity drivers are used to:
a). Accumulate costs in an activity centre.
b). Allocate costs from an activity centre to the centre’s output.
c). Predict the organization-level costs that should be assigned to
d). Measure the total long-term variable costs incurred in an organization.
9 ). Product variety refers to the number of:
a). Features a particular product provides for customers.
b). Components or processes included in a product.
c). Different types of products produced or services rendered.
d). Engineering change orders made on a product’s design since originally
being placed into production.
10 ). Which of the following techniques is commonly used to assign costs to