Question 1

Match each description to the appropriate term (a-d). Answers may be used more than once.
-Utilities incurred in the office

Accepted Answer

A) Direct materials 
B) Selling and administrative expense 
C) Factory overhead 
D) Direct labor 
A) Direct materials 
B) Selling and administrative expense 
C) Factory overhead 
D) Direct labor

Question 2

The controller's staff consists of management accountants responsible for systems and procedures, general accounting, budgets, taxes, and cost accounting.

Accepted Answer

A) True 
 B)False

Question 3

Direct costs can be specifically traced to a cost object.

Accepted Answer

A) True 
 B)False

Question 4

Depreciation on factory plant and equipment is an example of factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 5

Since there are few rules to restrict how an organization chooses to arrange its own internal data for decision making, managerial accounting provides ample opportunity for creativity and change.

Accepted Answer

A) True 
 B)False

Question 6

Cost of goods sold for a manufacturer equals cost of goods manufactured plus

Accepted Answer

A)  beginning work in process inventory less ending work in process inventory 
B)  ending work in process inventory less beginning work in process inventory 
C)  beginning finished goods inventory less ending finished goods inventory 
D)  ending finished goods inventory less beginning finished goods inventory 
A)  beginning work in process inventory less ending work in process inventory 
B)  ending work in process inventory less beginning work in process inventory 
C)  beginning finished goods inventory less ending finished goods inventory 
D)  ending finished goods inventory less beginning finished goods inventory

Question 7

The following are some of the costs incurred by Cupcake Company. Identify them as either:
-Frosting

Accepted Answer

A) Prime costs 
B) Conversion costs 
C) Both prime and conversion costs 
D) Neither prime nor conversion costs 
A) Prime costs 
B) Conversion costs 
C) Both prime and conversion costs 
D) Neither prime nor conversion costs

Question 8

Managerial accountants could prepare all of the following reports except a (n)

Accepted Answer

A)  performance report identifying amounts of scrap 
B)  control report comparing direct material usage over time 
C)  sales report targeting monthly sales and potential bonuses 
D)  annual report for external regulators such as the SEC 
A)  performance report identifying amounts of scrap 
B)  control report comparing direct material usage over time 
C)  sales report targeting monthly sales and potential bonuses 
D)  annual report for external regulators such as the SEC

Question 9

Cost of goods manufactured is equal to

Accepted Answer

A)  total manufacturing costs plus ending materials inventory less beginning materials inventory 
B)  cost of goods sold plus beginning work in process inventory less ending work in process inventory 
C)  total manufacturing costs plus ending work in process inventory less beginning work in process inventory 
D)  total manufacturing costs plus beginning work in process inventory less ending work in process inventory 
A)  total manufacturing costs plus ending materials inventory less beginning materials inventory 
B)  cost of goods sold plus beginning work in process inventory less ending work in process inventory 
C)  total manufacturing costs plus ending work in process inventory less beginning work in process inventory 
D)  total manufacturing costs plus beginning work in process inventory less ending work in process inventory

Question 10

Insurance expense incurred on a factory building would be treated as a

Accepted Answer

A)  direct cost 
B)  period cost 
C)  product cost 
D)  selling cost 
A)  direct cost 
B)  period cost 
C)  product cost 
D)  selling cost

Question 11

Match each description to the appropriate term (a-d). Answers may be used more than once.
-Indirect materials used

Accepted Answer

A) Direct materials 
B) Selling and administrative expense 
C) Factory overhead 
D) Direct labor 
A) Direct materials 
B) Selling and administrative expense 
C) Factory overhead 
D) Direct labor

Question 12

The phases of the management process are listed below. Match each phase to the appropriate description.
-Process by which managers run day-to-day operations

Accepted Answer

A) Planning 
B) Directing 
C) Controlling 
D) Improving 
E) Decision making 
A) Planning 
B) Directing 
C) Controlling 
D) Improving 
E) Decision making

Question 13

Work in process inventory increased by $20,000 during the current year. Cost of goods manufactured was $180,000. Total manufacturing costs incurred are

Accepted Answer

A)  $198,000 
B)  $160,000 
C)  $189,000 
D)  $200,000 
A)  $198,000 
B)  $160,000 
C)  $189,000 
D)  $200,000

Question 14

The cost of wages paid to employees directly involved in converting materials to finished product is classified as direct labor cost.

Accepted Answer

A) True 
 B)False

Question 15

If the cost of employee wages is not a significant portion of the total product cost, the wages are classified as direct materials cost.

Accepted Answer

A) True 
 B)False

Question 16

The following are costs incurred by a lawn mower manufacturer. Identify them as either:
-Grease for wheel axles

Accepted Answer

A) Direct materials 
B) Direct labor 
C) Factory overhead 
A) Direct materials 
B) Direct labor 
C) Factory overhead

Question 17

Which of the following is the principal reason for preparing managerial accounting reports?

Accepted Answer

A)  usefulness to management 
B)  cost of preparation 
C)  clarity 
D)  GAAP 
A)  usefulness to management 
B)  cost of preparation 
C)  clarity 
D)  GAAP

Question 18

Which of the following is not a characteristic of useful managerial accounting reports?

Accepted Answer

A)  accurate 
B)  adhere to GAAP 
C)  historical and estimated data 
D)  prepared as needed 
A)  accurate 
B)  adhere to GAAP 
C)  historical and estimated data 
D)  prepared as needed

Question 19

A plant manager's salary is a (n)

Accepted Answer

A)  direct cost and an indirect cost 
B)  direct cost 
C)  indirect cost 
D)  period cost 
A)  direct cost and an indirect cost 
B)  direct cost 
C)  indirect cost 
D)  period cost

Question 20

Which of the following are basic phases of the management process?

Accepted Answer

A)  supervising and directing 
B)  decision making and supervising 
C)  organizing and directing 
D)  planning and controlling 
A)  supervising and directing 
B)  decision making and supervising 
C)  organizing and directing 
D)  planning and controlling

Exam 18: Introduction to Managerial Accounting

Match each description to the appropriate term (a-d). Answers may be used more than once. -Utilities incurred in the office

The controller's staff consists of management accountants responsible for systems and procedures, general accounting, budgets, taxes, and cost accounting.

Direct costs can be specifically traced to a cost object.

Depreciation on factory plant and equipment is an example of factory overhead cost.

Since there are few rules to restrict how an organization chooses to arrange its own internal data for decision making, managerial accounting provides ample opportunity for creativity and change.

Cost of goods sold for a manufacturer equals cost of goods manufactured plus

The following are some of the costs incurred by Cupcake Company. Identify them as either: -Frosting

Managerial accountants could prepare all of the following reports except a (n)

Cost of goods manufactured is equal to

Insurance expense incurred on a factory building would be treated as a

Match each description to the appropriate term (a-d). Answers may be used more than once. -Indirect materials used

The phases of the management process are listed below. Match each phase to the appropriate description. -Process by which managers run day-to-day operations

Work in process inventory increased by $20,000 during the current year. Cost of goods manufactured was $180,000. Total manufacturing costs incurred are

The cost of wages paid to employees directly involved in converting materials to finished product is classified as direct labor cost.

If the cost of employee wages is not a significant portion of the total product cost, the wages are classified as direct materials cost.

The following are costs incurred by a lawn mower manufacturer. Identify them as either: -Grease for wheel axles

Which of the following is the principal reason for preparing managerial accounting reports?

Which of the following is not a characteristic of useful managerial accounting reports?

A plant manager's salary is a (n)

Which of the following are basic phases of the management process?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Job Order Costing

Process Cost Systems

Cost-Volume-Profit Analysis

Evaluating Variances From Standard Costs

Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

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