Question 1

An out-of-pocket cost requires a future cash outlay and is relevant for decision making.

Accepted Answer

A) True 
 B)False

Question 2

An opportunity cost requires a future cash outlay and is relevant for decision making.

Accepted Answer

A) True 
 B)False

Question 3

The salary paid to the supervisor of an assembly line would normally be classified as:

Accepted Answer

A) Direct labor. 
B) Indirect labor. 
C) A period cost. 
D) A general cost. 
E) An assembly cost. 
A) Direct labor. 
B) Indirect labor. 
C) A period cost. 
D) A general cost. 
E) An assembly cost.

Question 4

A classification of costs that is useful for assigning responsibility to and evaluating managers is:

Accepted Answer

A) Classification by traceability. 
B) Classification by behavior. 
C) Classification by relevance. 
D) Classification by function. 
E) Classification by controllability. 
A) Classification by traceability. 
B) Classification by behavior. 
C) Classification by relevance. 
D) Classification by function. 
E) Classification by controllability.

Question 5

Current information for the Austin Company follows:
  All raw materials used were traceable to specific batches of product.Austin Company's cost of goods manufactured for the year is:

Accepted Answer

A) $125,800. 
B) $128,600. 
C) $131,400. 
D) $137,000. 
E) $139,000. 
A) $125,800. 
B) $128,600. 
C) $131,400. 
D) $137,000. 
E) $139,000.

Question 6

The management concept of customer orientation encourages a company to set up its production system to produce large quantities of the same product for all customers.

Accepted Answer

A) True 
 B)False

Question 7

A _________________ cost contains a combination of fixed and variable costs.

Accepted Answer

The answer of A _________________ cost contains a combination of...

Question 8

Which of the following costs is not included in factory overhead?

Accepted Answer

A) Payroll taxes on the wages of supervisory factory workers. 
B) Indirect labor. 
C) Depreciation of manufacturing equipment. 
D) Manufacturing supplies used. 
E) Direct materials. 
A) Payroll taxes on the wages of supervisory factory workers. 
B) Indirect labor. 
C) Depreciation of manufacturing equipment. 
D) Manufacturing supplies used. 
E) Direct materials.

Question 9

Prime costs consist of direct labor and factory overhead.

Accepted Answer

A) True 
 B)False

Question 10

Raw materials that physically become part of the product and can be traced to specific units or batches of product are called:

Accepted Answer

A) Raw materials sold. 
B) Chargeable materials. 
C) Goods in process. 
D) Indirect materials. 
E) Direct materials. 
A) Raw materials sold. 
B) Chargeable materials. 
C) Goods in process. 
D) Indirect materials. 
E) Direct materials.

Question 11

The process of identifying costs as direct or indirect is referred to as classifying costs by _______________.

Accepted Answer

The answer of The process of identifying costs as direct...

Question 12

Products that are in the process of being manufactured but are not yet complete are called:

Accepted Answer

A) Raw materials inventory. 
B) Conversion costs. 
C) Cost of goods sold. 
D) Goods in process inventory. 
E) Finished goods inventory. 
A) Raw materials inventory. 
B) Conversion costs. 
C) Cost of goods sold. 
D) Goods in process inventory. 
E) Finished goods inventory.

Question 13

Expenditures incurred in the process of converting raw materials to finished goods,that include direct labor and factory overhead are known as _________________________.

Accepted Answer

The answer of Expenditures incurred in the process of converting...

Question 14

Which of the following statements is correct concerning the Days' sales in raw materials inventory?

Accepted Answer

A) Reveals how much raw materials inventory is available in terms of the number of days' sales. 
B) The ratio does not need to be calculated as it is not important for a manufacturer. 
C) Reveals how many times a company turns over its raw materials inventory in a period. 
D) Most companies generally prefer a high ratio. 
E) Is calculated by taking the Raw materials used/Average raw materials inventory . 
A) Reveals how much raw materials inventory is available in terms of the number of days' sales. 
B) The ratio does not need to be calculated as it is not important for a manufacturer. 
C) Reveals how many times a company turns over its raw materials inventory in a period. 
D) Most companies generally prefer a high ratio. 
E) Is calculated by taking the Raw materials used/Average raw materials inventory .

Question 15

_______________ is the deliberate misuse of the employer's assets for the employee's personal gain.

Accepted Answer

The answer of _______________ is the deliberate misuse of the...

Question 16

Costs may be classified by many different cost classifications.

Accepted Answer

A) True 
 B)False

Question 17

Under a just-in-time manufacturing system,large quantities of inventory are accumulated throughout the factory to be certain that needed components are available each time that they are needed.

Accepted Answer

A) True 
 B)False

Question 18

A primary difference between variable costs and fixed costs is:

Accepted Answer

A) Variable costs per unit change in varying increments while fixed costs per unit change in equal increments over the relevant range of activity. 
B) Variable costs per unit fluctuate and fixed costs per unit remain constant over the relevant range of activity. 
C) Variable costs per unit are fixed and fixed costs per unit are variable over the relevant range of activity. 
D) Variable costs per unit change in equal increments while total fixed costs change in proportion to the level of activity over the company's relevant range. 
E) Total variable costs are fixed and fixed costs per unit never change over the relevant range of activity. 
A) Variable costs per unit change in varying increments while fixed costs per unit change in equal increments over the relevant range of activity. 
B) Variable costs per unit fluctuate and fixed costs per unit remain constant over the relevant range of activity. 
C) Variable costs per unit are fixed and fixed costs per unit are variable over the relevant range of activity. 
D) Variable costs per unit change in equal increments while total fixed costs change in proportion to the level of activity over the company's relevant range. 
E) Total variable costs are fixed and fixed costs per unit never change over the relevant range of activity.

Question 19

The manufacturing statement is divided into four parts consisting of all of the following except:

Accepted Answer

A) Direct materials. 
B) Computation of cost of goods sold. 
C) Overhead. 
D) Computation of cost of goods manufactured. 
E) Direct labor. 
A) Direct materials. 
B) Computation of cost of goods sold. 
C) Overhead. 
D) Computation of cost of goods manufactured. 
E) Direct labor.

Question 20

What are the three types of inventories that are carried by manufacturers?
 Describe each type of inventory.

Accepted Answer

Manufacturers carry three types of inven

Exam 18: Managerial Accounting Concepts and Principles

An out-of-pocket cost requires a future cash outlay and is relevant for decision making.

An opportunity cost requires a future cash outlay and is relevant for decision making.

The salary paid to the supervisor of an assembly line would normally be classified as:

A classification of costs that is useful for assigning responsibility to and evaluating managers is:

Current information for the Austin Company follows: All raw materials used were traceable to specific batches of product.Austin Company's cost of goods manufactured for the year is:

The management concept of customer orientation encourages a company to set up its production system to produce large quantities of the same product for all customers.

A _________________ cost contains a combination of fixed and variable costs.

Which of the following costs is not included in factory overhead?

Prime costs consist of direct labor and factory overhead.

Raw materials that physically become part of the product and can be traced to specific units or batches of product are called:

The process of identifying costs as direct or indirect is referred to as classifying costs by _______________.

Products that are in the process of being manufactured but are not yet complete are called:

Expenditures incurred in the process of converting raw materials to finished goods,that include direct labor and factory overhead are known as _________________________.

Which of the following statements is correct concerning the Days' sales in raw materials inventory?

_______________ is the deliberate misuse of the employer's assets for the employee's personal gain.

Costs may be classified by many different cost classifications.

Under a just-in-time manufacturing system,large quantities of inventory are accumulated throughout the factory to be certain that needed components are available each time that they are needed.

A primary difference between variable costs and fixed costs is:

The manufacturing statement is divided into four parts consisting of all of the following except:

What are the three types of inventories that are carried by manufacturers? Describe each type of inventory.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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