CNA CNA Managerial Accounting 2

Question 1

A favorable materials price variance occurs when:

Accepted Answer

Standard price exceeds actual price paid

Answer

A favorable materials price variance results when the actual price paid for materials is less than the standard price, reducing costs.

Question 2

The balanced scorecard approach to performance measurement typically includes all of the following perspectives EXCEPT:

Accepted Answer

Market share ranking

Answer

The four balanced scorecard perspectives are Financial, Customer, Internal Business Processes, and Learning & Growth — market share ranking is not one of them.

Question 3

Which cost remains constant in total regardless of changes in activity level within the relevant range?

Accepted Answer

Fixed cost

Answer

Fixed costs do not change in total as activity levels fluctuate within the relevant range, though they change on a per-unit basis.

Question 4

Residual income is calculated as divisional operating income minus:

Accepted Answer

Invested capital times required rate of return

Answer

Residual income = Divisional Operating Income − (Invested Capital × Required Rate of Return), measuring profit above the cost of capital employed.

Question 5

In a make-or-buy decision, which costs are most relevant to the analysis?

Accepted Answer

Avoidable costs and opportunity costs

Answer

Make-or-buy decisions focus on avoidable costs that differ between alternatives and any opportunity costs of using internal resources.

CNA - Certified National Accountant Practice Test

CNA - Certified National Accountant Practice Test

CNA CNA Managerial Accounting 2