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
Which of the following is an example of a discretionary fixed cost?
Answer: Research and development spending
Discretionary fixed costs such as R&D spending arise from annual management decisions and can be changed in the short run without major operational impact.
The high-low method is used to:
Answer: Separate mixed costs into fixed and variable components
The high-low method uses the highest and lowest activity data points to estimate the variable rate and fixed component of a mixed cost.
Return on investment (ROI) for a business segment is calculated as:
Answer: Operating income divided by average invested assets
Segment ROI equals operating income divided by average invested assets, measuring how efficiently the segment uses its asset base to generate profit.
A flexible budget differs from a static budget in that a flexible budget:
Answer: Adjusts revenue and cost estimates to actual activity levels
A flexible budget recalculates expected revenues and costs at the actual level of activity achieved, enabling meaningful performance comparisons.
Which capital budgeting method considers the time value of money by discounting future cash flows back to present value?
Answer: Net present value
Net present value (NPV) discounts all expected future cash flows at the required rate of return and subtracts the initial investment to evaluate a project.
Opportunity cost in managerial decision-making refers to:
Answer: The benefit forgone by choosing one alternative over the next best option
Opportunity cost is the value of the next-best alternative given up when a particular decision is made, and it is always relevant to managerial choices.