Question 1

Manufacturers consider selling and administrative costs to be

Accepted Answer

A) period costs. 
B) conversion costs. 
C) inventoriable costs. 
D) prime costs. 
A) period costs. 
B) conversion costs. 
C) inventoriable costs. 
D) prime costs.

Question 2

Lucky Cow Dairy provided the following expense information for May:   What is the total cost for the production category of the value chain?

Accepted Answer

A) $496,000 
B) $202,000 
C) $180,000 
D) $330,000 
A) $496,000 
B) $202,000 
C) $180,000 
D) $330,000

Question 3

A company has monthly fixed costs of $112,500. The variable costs are $6.00 per unit. If the sales price of a unit is $19.00 and we sell 7,500 units, the total sales revenue will be

Accepted Answer

A) $97,500. 
B) $112,500. 
C) $142,500. 
D) $(15,000). 
A) $97,500. 
B) $112,500. 
C) $142,500. 
D) $(15,000).

Question 4

Selected financial information for Greek Food Producers is presented in the following table (000s omitted).   What was direct materials used?

Accepted Answer

A) $650 
B) $470 
C) $230 
D) $350 
A) $650 
B) $470 
C) $230 
D) $350

Question 5

Research and development is needed to improve products and to design new products.

Accepted Answer

A) True 
 B)False

Question 6

Paper Clip Company sells office supplies. The following information summarizes the company's operating activities for the year:   What is cost of goods sold?

Accepted Answer

A) $85,000 
B) $89,000 
C) $108,000 
D) $112,000 
A) $85,000 
B) $89,000 
C) $108,000 
D) $112,000

Question 7

Certain materials used in a manufacturing plant cannot be traced to a specific unit. What are these materials called?

Accepted Answer

A) General materials 
B) Direct materials 
C) Indirect materials 
D) Finished materials 
A) General materials 
B) Direct materials 
C) Indirect materials 
D) Finished materials

Question 8

Which of the following items could be an example of a cost object?

Accepted Answer

A) A manufacturing plant 
B) An international plant 
C) The accounting department 
D) All of the above are examples of potential cost objects. 
A) A manufacturing plant 
B) An international plant 
C) The accounting department 
D) All of the above are examples of potential cost objects.

Question 9

Porches, Inc., sells lawn furniture. Selected financial information for the most recent year follows. Beginning merchandise inventory on January 1 was $33,000.
Ending merchandise inventory on December 31 was $35,000.
Purchases during the year were $92,000.
Selling and administrative expenses were $75,000.
Sales for year were $262,000.
What was the value of goods available for sale?

Accepted Answer

A) $125,000 
B) $127,000 
C) $170,000 
D) $ 90,000 
A) $125,000 
B) $127,000 
C) $170,000 
D) $ 90,000

Question 10

Winner's Sporting Equipment manufactures sporting goods. Selected costs from the past year include:   Product costs for Winner's Sporting Equipment totaled

Accepted Answer

A) $724,000. 
B) $744,500. 
C) $612,000. 
D) $806,500. 
A) $724,000. 
B) $744,500. 
C) $612,000. 
D) $806,500.

Question 11

Service companies must carry a large amount of inventory to meet consumer demand.

Accepted Answer

A) True 
 B)False

Question 12

Selected information regarding a company's most recent quarter follows (all data in thousands).   What was cost of goods sold?

Accepted Answer

A) $ 1,160 
B) $ 610 
C) $ 960 
D) $ 840 
A) $ 1,160 
B) $ 610 
C) $ 960 
D) $ 840

Question 13

Lucas Family Orange Groves processes a variety of fresh juices. The company has the following expenses for July:   What is the total cost for the customer service category of the value chain?

Accepted Answer

A) $2,000 
B) $35,000 
C) $80,000 
D) $ 9,000 
A) $2,000 
B) $35,000 
C) $80,000 
D) $ 9,000

Question 14

Getting to school for your 8 a.m. class doesn't leave much time for breakfast, and you are quite hungry by the time class ends. It is a long walk to the cafeteria, the lines are long once you get there, and you find yourself having to decide between having breakfast and getting to your next class on time. Many of your friends have expressed the same problem. The administration has agreed to let you set up a table just outside the building where you will sell various snacks for $1 each. You have agreed to pay the administration $400 per month and salaries to your friends to run the business will be another $400 per month. It will cost you 60 cents each to buy the pre-packaged snacks. You believe you can sell 2,500 snack packs per month.
a. What are the total fixed costs per month?
b. What are the total variable costs per month?
c. What is the fixed cost per snack pack?
d. What is the variable cost per snack pack?
e. What is the average cost per snack pack?
f. What is the average profit margin per snack pack?
g. Based on your analysis, should you start the snack pack business?

Accepted Answer

a. $800 ($400 + $400)
b. $1,500 (60 cent

Question 15

Which part of the value chain would a technical support hotline for customers be considered?

Accepted Answer

A) Design 
B) Customer service 
C) Distribution 
D) Marketing 
A) Design 
B) Customer service 
C) Distribution 
D) Marketing

Question 16

Rustic Living Furniture Company manufactures furniture at its central Kentucky factory. Some of its costs from the past year include:   Conversion costs for Rustic Living Furniture Company totaled

Accepted Answer

A) $126,000. 
B) $175,000. 
C) $294,000. 
D) $271,500. 
A) $126,000. 
B) $175,000. 
C) $294,000. 
D) $271,500.

Question 17

Differentiate between relevant and irrelevant costs and give an example using both.

Accepted Answer

When making a decision, those costs that

Question 18

Direct labor for a company was $145,000; manufacturing overhead was $300,000; and direct materials were $270,000. Conversion costs would total

Accepted Answer

A) $570,000. 
B) $715,000. 
C) $415,000. 
D) $445,000. 
A) $570,000. 
B) $715,000. 
C) $415,000. 
D) $445,000.

Question 19

Which type of company typically produces its own inventory?

Accepted Answer

A) Manufacturer 
B) Service company 
C) Retailer 
D) Wholesaler 
A) Manufacturer 
B) Service company 
C) Retailer 
D) Wholesaler

Question 20

The income statements for both a merchandiser and manufacturer would include which of the following?

Accepted Answer

A) Operating expenses 
B) Direct labor incurred 
C) Direct materials used 
D) Cost of goods manufactured 
A) Operating expenses 
B) Direct labor incurred 
C) Direct materials used 
D) Cost of goods manufactured

Manufacturers consider selling and administrative costs to be

Lucky Cow Dairy provided the following expense information for May: What is the total cost for the production category of the value chain?

A company has monthly fixed costs of $112,500. The variable costs are $6.00 per unit. If the sales price of a unit is $19.00 and we sell 7,500 units, the total sales revenue will be

Selected financial information for Greek Food Producers is presented in the following table (000s omitted). What was direct materials used?

Research and development is needed to improve products and to design new products.

Paper Clip Company sells office supplies. The following information summarizes the company's operating activities for the year: What is cost of goods sold?

Certain materials used in a manufacturing plant cannot be traced to a specific unit. What are these materials called?

Which of the following items could be an example of a cost object?

Winner's Sporting Equipment manufactures sporting goods. Selected costs from the past year include: Product costs for Winner's Sporting Equipment totaled

Service companies must carry a large amount of inventory to meet consumer demand.

Selected information regarding a company's most recent quarter follows (all data in thousands). What was cost of goods sold?

Lucas Family Orange Groves processes a variety of fresh juices. The company has the following expenses for July: What is the total cost for the customer service category of the value chain?

Which part of the value chain would a technical support hotline for customers be considered?

Rustic Living Furniture Company manufactures furniture at its central Kentucky factory. Some of its costs from the past year include: Conversion costs for Rustic Living Furniture Company totaled

Differentiate between relevant and irrelevant costs and give an example using both.

Direct labor for a company was $145,000; manufacturing overhead was $300,000; and direct materials were $270,000. Conversion costs would total

Which type of company typically produces its own inventory?

The income statements for both a merchandiser and manufacturer would include which of the following?

Introduction to Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 2: Building Blocks of Managerial Accounting

Manufacturers consider selling and administrative costs to be

Lucky Cow Dairy provided the following expense information for May: What is the total cost for the production category of the value chain?

A company has monthly fixed costs of $112,500. The variable costs are $6.00 per unit. If the sales price of a unit is $19.00 and we sell 7,500 units, the total sales revenue will be

Selected financial information for Greek Food Producers is presented in the following table (000s omitted). What was direct materials used?

Research and development is needed to improve products and to design new products.

Paper Clip Company sells office supplies. The following information summarizes the company's operating activities for the year: What is cost of goods sold?

Certain materials used in a manufacturing plant cannot be traced to a specific unit. What are these materials called?

Which of the following items could be an example of a cost object?

Winner's Sporting Equipment manufactures sporting goods. Selected costs from the past year include: Product costs for Winner's Sporting Equipment totaled

Service companies must carry a large amount of inventory to meet consumer demand.

Selected information regarding a company's most recent quarter follows (all data in thousands). What was cost of goods sold?

Lucas Family Orange Groves processes a variety of fresh juices. The company has the following expenses for July: What is the total cost for the customer service category of the value chain?

Which part of the value chain would a technical support hotline for customers be considered?

Rustic Living Furniture Company manufactures furniture at its central Kentucky factory. Some of its costs from the past year include: Conversion costs for Rustic Living Furniture Company totaled

Differentiate between relevant and irrelevant costs and give an example using both.

Direct labor for a company was $145,000; manufacturing overhead was $300,000; and direct materials were $270,000. Conversion costs would total

Which type of company typically produces its own inventory?

The income statements for both a merchandiser and manufacturer would include which of the following?

Introduction to Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters