CNA Managerial Accounting Flashcards
6 cards from real CNA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CNA Managerial Accounting flashcards as text
A favorable materials price variance occurs when:
Answer: Standard price exceeds actual price paid
A favorable materials price variance results when the actual price paid for materials is less than the standard price, reducing costs.
The balanced scorecard approach to performance measurement typically includes all of the following perspectives EXCEPT:
Answer: Market share ranking
The four balanced scorecard perspectives are Financial, Customer, Internal Business Processes, and Learning & Growth — market share ranking is not one of them.
Which cost remains constant in total regardless of changes in activity level within the relevant range?
Answer: Fixed cost
Fixed costs do not change in total as activity levels fluctuate within the relevant range, though they change on a per-unit basis.
Residual income is calculated as divisional operating income minus:
Answer: Invested capital times required rate of return
Residual income = Divisional Operating Income − (Invested Capital × Required Rate of Return), measuring profit above the cost of capital employed.
In a make-or-buy decision, which costs are most relevant to the analysis?
Answer: Avoidable costs and opportunity costs
Make-or-buy decisions focus on avoidable costs that differ between alternatives and any opportunity costs of using internal resources.
When a company operates at full capacity, the transfer price for an internal sale should generally be set at a minimum of:
Answer: Variable cost plus lost contribution margin
At full capacity, the minimum transfer price equals variable cost plus the contribution margin sacrificed by not making an external sale.