Question 1

Which of the following are the inputs manufacturers use to make their product?

Accepted Answer

A) Direct material, direct labor, and manufacturing overhead. 
B) Period costs and product costs. 
C) Conversion costs and direct labor. 
D) Common costs and special costs. 
E) Direct material, direct labor, and period costs. 
A) Direct material, direct labor, and manufacturing overhead. 
B) Period costs and product costs. 
C) Conversion costs and direct labor. 
D) Common costs and special costs. 
E) Direct material, direct labor, and period costs.

Question 2

Gate Grocery's most popular candy bars cost $0.50 each and sell for $0.75.Management determined that it had purchased 3,000 candy bars in February.It began February with 200 bars and had 150 remaining at the end of February.How much is cost of goods sold for February?

Accepted Answer

A) $1,475 
B) $2,287.50 
C) $3,050 
D) $1,525 
A) $1,475 
B) $2,287.50 
C) $3,050 
D) $1,525

Question 3

Office rent is an example of a (an):

Accepted Answer

A) Administrative cost. 
B) Product cost. 
C) Conversion Cost. 
D) Costs of providing product or service. 
E) Direct cost. 
A) Administrative cost. 
B) Product cost. 
C) Conversion Cost. 
D) Costs of providing product or service. 
E) Direct cost.

Question 4

The Merchant Tire Company provided the following information for the month of February: $$\begin{array} { l c } 
\text { Cost of goods manufactured } & \$ 147,000 \
\text { Beginning finished goods inventory } & \$ 23,000 \
\text { Cost of goods sold } & \$ 129,000
\end{array}$$ The company's balance in their finished goods inventory account at the end of February is:

Accepted Answer

A) $23,000 
B) $18,000 
C) $5,000 
D) $41,000 
A) $23,000 
B) $18,000 
C) $5,000 
D) $41,000

Question 5

The matching principle in GAAP requires that we separate:

Accepted Answer

A) Conversion costs and overhead. 
B) Product costs and period costs. 
C) Selling and administrative costs. 
D) Controllable and non-controllable costs. 
E) None of the above. 
A) Conversion costs and overhead. 
B) Product costs and period costs. 
C) Selling and administrative costs. 
D) Controllable and non-controllable costs. 
E) None of the above.

Question 6

The cost of providing services might include depreciation on equipment.

Accepted Answer

A) True 
 B)False

Question 7

Unlike service firms, merchandising firms maintain an inventory of goods that they buy and sell.

Accepted Answer

A) True 
 B)False

Question 8

The Clarke Company provided the following information for the month of December: $$\begin{array} { l l } 
\text { Beginning work-in-process } & \$ 12,000 \
\text { Ending work-in-process } & \$ 9,000 \
\text { Direct labor/materials used } & \$ 14,000 \
\text { Manufacturing overhead } & \$ 7,000
\end{array}$$ The company's cost of goods manufactured for December is:

Accepted Answer

A) $42,000 
B) $24,000 
C) $33,000 
D) $28,000 
A) $42,000 
B) $24,000 
C) $33,000 
D) $28,000

Question 9

It frequently is vital to modify accounting reports and use non-financial data to estimate the controllable costs and benefits of a decision option.

Accepted Answer

A) True 
 B)False

Question 10

The SurferDude Company manufactures long and short surfboards.The company incurred manufacturing overhead costs of $210,000 in March.They have decided to allocate these costs based on units produced.In March the company produced 8,000 longboards and 6,000 shortboards.The amount of overhead allocated to each product, respectively, would be: $$\begin{array} { l c } 
\text { Longboards } & \text { Shortboards } \
\text { A } \$ 120,000 & \$ 90,000 \
\text { B. } \$ 90,000 & \$ 120,000 \
\text { C. } \$ 105,000 & \$ 105,000 \
\text { D. } \$ 80,000 & \$ 60,000
\end{array}$$

Accepted Answer

The answer of The SurferDude Company manufactures long and short...

Question 11

Company's controller is calculating the current month's cost of goods manufactured.Which of the following should be considered as part of the calculation?

Accepted Answer

A) Direct labor and indirect costs. 
B) Indirect labor and commission expenses. 
C) Manufacturing overhead and the corporate vice president's salary. 
D) Cost of materials used and finished goods inventory. 
A) Direct labor and indirect costs. 
B) Indirect labor and commission expenses. 
C) Manufacturing overhead and the corporate vice president's salary. 
D) Cost of materials used and finished goods inventory.

Question 12

Which of the following is not an example of a service firm?

Accepted Answer

A) Delta Airlines. 
B) Blankenship and Hobbs, Attorneys. 
C) First State Bank. 
D) Hilton Hotels. 
E) All of the above are service firms. 
A) Delta Airlines. 
B) Blankenship and Hobbs, Attorneys. 
C) First State Bank. 
D) Hilton Hotels. 
E) All of the above are service firms.

Question 13

The following costs were incurred in November: $$\begin{array} { l l } 
\text { Direct materials } \quad \$ 16,000 \
\text { Direct labor } & 8,000 \
\text { Manufacturing overhead } & 10,000 \
\text { Selling expenses } & 4,000 \
\text { Administrative expenses } & 5,000
\end{array}$$ Prime costs during the month totaled:

Accepted Answer

A) $34,000 
B) $24,000 
C) $43,000 
D) $9,000 
A) $34,000 
B) $24,000 
C) $43,000 
D) $9,000

Question 14

Harms Shoe Company applies manufacturing overhead based on the number of units as the cost driver.Information concerning costs for July follows:
$\begin{array}{ll}
\text { Direct labor costs } & 800 \text { hours @ \$14 } \
\text { Manufacturing overhead } & \$ 8,000 \
\text { Direct materials } & \$ 45,000
\end{array}$
How much is the unit product cost if 1,000 units are produced?

Accepted Answer

A) $8.00 
B) $64.20 
C) $53.00 
D) $45.00 
A) $8.00 
B) $64.20 
C) $53.00 
D) $45.00

Question 15

Overhead costs are direct and, as such, are traceable to each product.

Accepted Answer

A) True 
 B)False

Question 16

The terms cost of goods sold and costs of goods manufactured are used interchangeably.

Accepted Answer

A) True 
 B)False

Question 17

C & C Power Lines is a subcontractor that works on public utilities.Which of the following is a key characteristic that makes it distinctively a service company?

Accepted Answer

A) It does not maintain inventories. 
B) Its products are tangible. 
C) Its product costs appear below the line in computing gross margin. 
D) All of its costs are period costs. 
A) It does not maintain inventories. 
B) Its products are tangible. 
C) Its product costs appear below the line in computing gross margin. 
D) All of its costs are period costs.

Question 18

Maintenance on factory equipment is a(n):

Accepted Answer

A) Period cost. 
B) Overhead cost. 
C) Administrative cost. 
D) Product cost. 
E) Both B and D are correct. 
A) Period cost. 
B) Overhead cost. 
C) Administrative cost. 
D) Product cost. 
E) Both B and D are correct.

Question 19

Property taxes on a manufacturing plant is an example of: $\begin{array}{ll}&\text { Product Cost }&\text { Manufacturing }\&&\text { Overhead }\
A.&\text { No } & \text { Yes } \
B.&\text { No } & \text { No } \
C.&\text { Yes } & \text { No } \
D.&\text { Yes } & \text { Yes }
\end{array}$

Accepted Answer

The answer of Property taxes on a manufacturing plant is...

Question 20

In a typical production process, the physical flows for a manufacturer are:

Accepted Answer

A) Work-in-Process Inventory→Material Inventory→Finished Goods Inventory→Cost of Goods Sold. 
B) Material Inventory→Cost of Goods Sold→Finished Goods. 
C) Material Inventory→Work-in-Process inventory→Finished Goods Inventory→Cost of Goods Sold. 
D) Finished Goods Inventory→Cost of Goods Sold→Material Inventory 
E) None of the above. 
A) Work-in-Process Inventory→Material Inventory→Finished Goods Inventory→Cost of Goods Sold. 
B) Material Inventory→Cost of Goods Sold→Finished Goods. 
C) Material Inventory→Work-in-Process inventory→Finished Goods Inventory→Cost of Goods Sold. 
D) Finished Goods Inventory→Cost of Goods Sold→Material Inventory 
E) None of the above.

Which of the following are the inputs manufacturers use to make their product?

Gate Grocery's most popular candy bars cost $0.50 each and sell for $0.75.Management determined that it had purchased 3,000 candy bars in February.It began February with 200 bars and had 150 remaining at the end of February.How much is cost of goods sold for February?

Office rent is an example of a (an):

The Merchant Tire Company provided the following information for the month of February: Cost of goods manufactured \ 147,000 Beginning finished goods inventory \ 23,000 Cost of goods sold \ 129,000 The company's balance in their finished goods inventory account at the end of February is:

The matching principle in GAAP requires that we separate:

The cost of providing services might include depreciation on equipment.

Unlike service firms, merchandising firms maintain an inventory of goods that they buy and sell.

The Clarke Company provided the following information for the month of December: Beginning work-in-process \ 12,000 Ending work-in-process \ 9,000 Direct labor/materials used \ 14,000 Manufacturing overhead \ 7,000 The company's cost of goods manufactured for December is:

It frequently is vital to modify accounting reports and use non-financial data to estimate the controllable costs and benefits of a decision option.

Company's controller is calculating the current month's cost of goods manufactured.Which of the following should be considered as part of the calculation?

Which of the following is not an example of a service firm?

The following costs were incurred in November: Direct materials \ 16,000 Direct labor 8,000 Manufacturing overhead 10,000 Selling expenses 4,000 Administrative expenses 5,000 Prime costs during the month totaled:

Harms Shoe Company applies manufacturing overhead based on the number of units as the cost driver.Information concerning costs for July follows: Direct labor costs 800 hours @ \1 4 Manufacturing overhead \ 8,000 Direct materials \ 45,000 How much is the unit product cost if 1,000 units are produced?

Overhead costs are direct and, as such, are traceable to each product.

The terms cost of goods sold and costs of goods manufactured are used interchangeably.

C & C Power Lines is a subcontractor that works on public utilities.Which of the following is a key characteristic that makes it distinctively a service company?

Maintenance on factory equipment is a(n):

Property taxes on a manufacturing plant is an example of: Product Cost Manufacturing Overhead A. No Yes B. No No C. Yes No D. Yes Yes

In a typical production process, the physical flows for a manufacturer are:

Accounting: Information for Decision Making

Identifying and Estimating Costs and Benefits

Techniques for Estimating Fixed and Variable Costs

Cost-Volume-Profit Analysis

Decision Making in the Short Term

Operating Budgets: Bridging Planning and Control

Budgetary Control and Variance Analysis

Cost Allocations

Activity-Based Costing Management

Capital Budgeting

Performance Evaluation in Decentralized Organizations

Strategic Planning and Control

Job-Costing Systems

Process-Costing Systems

Refining Systems: Support Activity

Filters

Exam 3: Cost Flows and Cost Terminology

Which of the following are the inputs manufacturers use to make their product?

Gate Grocery's most popular candy bars cost $0.50 each and sell for $0.75.Management determined that it had purchased 3,000 candy bars in February.It began February with 200 bars and had 150 remaining at the end of February.How much is cost of goods sold for February?

Office rent is an example of a (an):

The Merchant Tire Company provided the following information for the month of February: Cost of goods manufactured \ 147,000 Beginning finished goods inventory \ 23,000 Cost of goods sold \ 129,000 The company's balance in their finished goods inventory account at the end of February is:

The matching principle in GAAP requires that we separate:

The cost of providing services might include depreciation on equipment.

Unlike service firms, merchandising firms maintain an inventory of goods that they buy and sell.

The Clarke Company provided the following information for the month of December: Beginning work-in-process \ 12,000 Ending work-in-process \ 9,000 Direct labor/materials used \ 14,000 Manufacturing overhead \ 7,000 The company's cost of goods manufactured for December is:

It frequently is vital to modify accounting reports and use non-financial data to estimate the controllable costs and benefits of a decision option.

Company's controller is calculating the current month's cost of goods manufactured.Which of the following should be considered as part of the calculation?

Which of the following is not an example of a service firm?

The following costs were incurred in November: Direct materials \ 16,000 Direct labor 8,000 Manufacturing overhead 10,000 Selling expenses 4,000 Administrative expenses 5,000 Prime costs during the month totaled:

Overhead costs are direct and, as such, are traceable to each product.

The terms cost of goods sold and costs of goods manufactured are used interchangeably.

C & C Power Lines is a subcontractor that works on public utilities.Which of the following is a key characteristic that makes it distinctively a service company?

Maintenance on factory equipment is a(n):

Property taxes on a manufacturing plant is an example of: Product Cost Manufacturing Overhead A. No Yes B. No No C. Yes No D. Yes Yes

In a typical production process, the physical flows for a manufacturer are:

Accounting: Information for Decision Making

Identifying and Estimating Costs and Benefits

Techniques for Estimating Fixed and Variable Costs

Cost-Volume-Profit Analysis

Decision Making in the Short Term

Operating Budgets: Bridging Planning and Control

Budgetary Control and Variance Analysis

Cost Allocations

Activity-Based Costing Management

Capital Budgeting

Performance Evaluation in Decentralized Organizations

Strategic Planning and Control

Job-Costing Systems

Process-Costing Systems

Refining Systems: Support Activity

Filters