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Quizzes > Business & Finance

Managerial Accounting Exam 1 Practice Quiz

Quick, free quiz-practice for your managerial accounting test 1 with instant results.

Editorial: Review CompletedCreated By: Thomas BarberUpdated Aug 27, 2025
Difficulty: Moderate
2-5mins
Learning OutcomesCheat Sheet
Paper art illustration for managerial accounting quiz on golden yellow background

This quiz helps you prepare for Managerial Accounting Exam 1 by checking cost behavior, budgeting, and variance analysis, with instant scoring and clear feedback. For more practice on core concepts, try our fundamentals of accounting quiz, explore an accounting principles quiz, or take a quick debits and credits quiz.

Which of the following is classified as a product cost for a manufacturing company?
Sales commissions
Office rent for corporate HQ
Factory maintenance wages
CEO salary
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As activity increases within the relevant range, what happens to total fixed cost and fixed cost per unit?
Total fixed cost stays the same; fixed cost per unit decreases
Total fixed cost decreases; fixed cost per unit increases
Total fixed cost increases; fixed cost per unit stays the same
Both total fixed cost and fixed cost per unit increase
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A company sells a product for $50 with variable cost of $30 per unit. What is the contribution margin per unit?
$20
$30
$50
$10
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Sales are $500,000 at break-even of $400,000. What is the margin of safety in dollars?
$100,000
$900,000
$500,000
$400,000
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All else equal, increasing the unit sales price will have what effect on break-even units?
Increase break-even units
No effect on break-even units
Decrease break-even units
Effect cannot be determined
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In a job-order costing system, which document authorizes the transfer of materials from the storeroom to production for a specific job?
Receiving report
Production schedule
Purchase order
Materials requisition form
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Using the high-low method, if maintenance cost is $20,000 at 8,000 machine-hours and $26,000 at 14,000 machine-hours, what is the estimated variable cost per machine-hour?
$1.00
$2.00
$1.50
$0.75
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A firm has fixed costs of $120,000, a sales price of $40, and variable cost of $25 per unit. What is the break-even point in units?
3,000
4,000
8,000
12,000
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Under absorption costing, compared to variable costing, when inventory increases during the period, operating income will generally be:
Lower under absorption costing
The same under both methods
Indeterminate without cash flow data
Higher under absorption costing
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If overhead is overapplied for the period and is closed to Cost of Goods Sold, the effect on Cost of Goods Sold will be:
Cannot be determined
No change
Increased
Decreased
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In a make-or-buy decision, which cost is relevant?
Sunk R&D costs
Historical purchase price
Avoidable portion of variable manufacturing overhead
Allocated corporate fixed costs that will remain
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For sell or process further decisions in joint production, which costs are relevant?
Incremental processing costs after split-off
Historical joint cost per unit
Joint costs before split-off
Allocated fixed factory overhead
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If contribution margin is $300,000 and operating income is $75,000, what is the degree of operating leverage?
4.0
2.0
0.25
3.0
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Estimated manufacturing overhead is $600,000 and estimated direct labor-hours are 120,000. What is the predetermined overhead rate?
$5.00 per DLH
$2.00 per DLH
$6.00 per DLH
$4.00 per DLH
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Under process costing, which statement is correct regarding equivalent units under the weighted-average method?
Equivalent units include only work started and completed this period
Equivalent units exclude beginning work in process
Equivalent units include work from both current and prior periods
Equivalent units exclude ending work in process
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A product requires 3 machine-minutes per unit. The constrained machine has 1,200 minutes available and the contribution margin per unit is $6. What is the contribution margin per minute?
$2.00
$6.00
$3.00
$0.50
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The direct labor rate variance is calculated as:
(Actual price - Standard price) x Standard quantity
(Actual hours - Standard hours) x Standard rate
(Actual rate - Standard rate) x Actual hours
(Actual quantity - Standard quantity) x Actual price
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Fixed overhead volume variance arises due to:
Difference between budgeted fixed overhead and applied fixed overhead based on standard hours allowed
Difference between actual and standard machine setup times
Difference between actual and standard variable overhead rates
Difference between actual and budgeted fixed overhead spending
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When using regression to estimate cost behavior, the coefficient on the activity driver is interpreted as:
Predetermined overhead rate
Total fixed cost
Contribution margin ratio
Estimated variable cost per unit of activity
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Under FIFO process costing, the equivalent units for conversion costs for beginning WIP include:
All work in beginning WIP regardless of when incurred
No portion of beginning WIP
All work done on units completed this period
Only the work needed to complete the beginning WIP units this period
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Study Outcomes

  1. Analyze cost behavior patterns -

    Differentiate between fixed, variable, and mixed costs to predict how changes in production levels affect total costs and profitability.

  2. Apply budgeting techniques -

    Construct and assess operating, cash, and flexible budgets to plan and control managerial accounting activities effectively.

  3. Calculate variance metrics -

    Compute material, labor, and overhead variances to identify performance gaps and support decision-making.

  4. Evaluate contribution margin and break-even -

    Determine contribution margins and break-even points to guide pricing and product mix strategies with confidence.

  5. Engage with practice exam questions -

    Use free managerial accounting exam questions to test your knowledge and prepare for Exam 1 in a timed, scored format.

  6. Interpret performance outcomes -

    Analyze quiz results to pinpoint strengths and weaknesses, enabling targeted study and skill improvement.

Cheat Sheet

  1. Cost Behavior and High-Low Method -

    Classify costs as fixed, variable, or mixed to predict how total costs change with activity levels, a key skill for any managerial accounting quiz. Use the high-low method formula (ΔCost/ΔActivity) to estimate variable cost per unit and then derive fixed costs. Remember the mnemonic "High minus Low divide by Range" to recall the steps on Exam 1 Managerial Accounting.

  2. Contribution Margin and Break-Even Analysis -

    Calculate contribution margin (CM = Sales - Variable Costs) to understand how each sales dollar contributes to covering fixed costs and profit. Determine the break-even point with Fixed Costs/CM Ratio for a clear profitability target. Mastering CM strengthens your confidence on the free managerial accounting exam and real-world decision making.

  3. Master Budget vs. Flexible Budget -

    Build a master budget by combining sales, production, and cash budgets to set performance targets under one activity level. Then create a flexible budget that adjusts cost and revenue estimates to actual output, improving variance analysis accuracy. For example, update overhead costs based on actual machine hours to see true performance.

  4. Variance Analysis Fundamentals -

    Analyze material price and quantity variances plus labor rate and efficiency variances to pinpoint cost control issues. Use the formula Variance = (Actual - Standard) × Standard Quantity or Rate, labeling results as favorable or unfavorable. Interpreting these variances builds critical thinking for your managerial accounting practice questions.

  5. Relevant Costing for Decision-Making -

    Focus on avoidable (incremental) costs and ignore sunk costs when evaluating special orders or product line decisions. For instance, only include extra material and labor needed when a one-time order arrives, not past development expenses. A quick mnemonic: "Future Focused, Sunk Spooked" keeps your decision analysis sharp.

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