Question 1

The sum of all manufacturing costs except for direct materials and direct labor is called manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 2

Selling costs are indirect costs.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is NOT a period cost?

Accepted Answer

A) Depreciation of factory maintenance equipment. 
B) Salary of a clerk who handles customer billing. 
C) Insurance on a company showroom where customers can view new products. 
D) Cost of a seminar concerning tax law updates that was attended by the company's controller. 
A) Depreciation of factory maintenance equipment. 
B) Salary of a clerk who handles customer billing. 
C) Insurance on a company showroom where customers can view new products. 
D) Cost of a seminar concerning tax law updates that was attended by the company's controller.

Question 4

Meginnis Corporation's relevant range of activity is 3,000 units to 7,000 units.When it produces and sells 5,000 units, its average costs per unit are as follows:    If 6,000 units are produced, the total amount of direct manufacturing cost incurred is closest to:

Accepted Answer

A) $79,200 
B) $63,600 
C) $62,700 
D) $53,700 
A) $79,200 
B) $63,600 
C) $62,700 
D) $53,700

Question 5

To the nearest whole cent, what should be the average property tax per unit at a sales volume of 37,300 units? (Assume that this sales volume is within the relevant range.)

Accepted Answer

A) $19.30 
B) $19.66 
C) $19.72 
D) $19.48 
A) $19.30 
B) $19.66 
C) $19.72 
D) $19.48

Question 6

If 25,000 books are sold during the second quarter and this activity is within the relevant range, the company's expected contribution margin would be:

Accepted Answer

A) $875,000 
B) $300,000 
C) $175,000 
D) $65,000 
A) $875,000 
B) $300,000 
C) $175,000 
D) $65,000

Question 7

Fiori Corporation's relevant range of activity is 3,000 units to 7,000 units.When it produces and sells 5,000 units, its average costs per unit are as follows:   The incremental manufacturing cost that the company will incur if it increases production from 5,000 to 5,001 units is closest to:

Accepted Answer

A) $16.20 
B) $10.80 
C) $13.80 
D) $14.30 
A) $16.20 
B) $10.80 
C) $13.80 
D) $14.30

Question 8

Prime cost consists of:

Accepted Answer

A) direct labor and manufacturing overhead. 
B) direct materials and manufacturing overhead. 
C) direct materials and direct labor. 
D) direct materials, direct labor and manufacturing overhead. 
A) direct labor and manufacturing overhead. 
B) direct materials and manufacturing overhead. 
C) direct materials and direct labor. 
D) direct materials, direct labor and manufacturing overhead.

Question 9

Perteet Corporation's relevant range of activity is 3,000 units to 7,000 units.When it produces and sells 5,000 units, its average costs per unit are as follows:   If 4,000 units are produced, the total amount of manufacturing overhead cost is closest to:

Accepted Answer

A) $18,100 
B) $28,000 
C) $21,400 
D) $14,800 
A) $18,100 
B) $28,000 
C) $21,400 
D) $14,800

Question 10

Morrisroe Corporation has provided the following information:   Required:
a.If the selling price is $25.90 per unit, what is the contribution margin per unit sold?
b.What incremental manufacturing cost will the company incur if it increases production from 5,000 to 5,001 units?

Accepted Answer

a. @#IMG-DLM&_TB2627

Question 11

Wofril Corporation uses the cost formula Y = $5,300 + $0.60X for the maintenance cost, where X is machine-hours.The August budget is based on 8,000 hours of planned machine time.Maintenance cost expected to be incurred during August is:

Accepted Answer

A) $10,100 
B) $4,800 
C) $500 
D) $5,300 
A) $10,100 
B) $4,800 
C) $500 
D) $5,300

Question 12

The total of the product costs listed above for September is:

Accepted Answer

A) $292,000 
B) $294,000 
C) $50,000 
D) $586,000 
A) $292,000 
B) $294,000 
C) $50,000 
D) $586,000

Question 13

Gabel Inc.is a merchandising company.Last month the company's merchandise purchases totaled $63,000.The company's beginning merchandise inventory was $13,000 and its ending merchandise inventory was $15,000.What was the company's cost of goods sold for the month?

Accepted Answer

A) $91,000 
B) $63,000 
C) $65,000 
D) $61,000 
A) $91,000 
B) $63,000 
C) $65,000 
D) $61,000

Question 14

In making the decision to buy the model 240 machine rather than the model 310 machine, the differential cost was:

Accepted Answer

A) $95,000 
B) $5,000 
C) $77,000 
D) $18,000 
A) $95,000 
B) $5,000 
C) $77,000 
D) $18,000

Question 15

Which of the following statements concerning direct and indirect costs is NOT true?

Accepted Answer

A) Whether a particular cost is classified as direct or indirect does not depend on the cost object. 
B) A direct cost is one that can be easily traced to the particular cost object. 
C) The factory manager's salary would be classified as an indirect cost of producing one unit of product. 
D) A particular cost may be direct or indirect, depending on the cost object. 
A) Whether a particular cost is classified as direct or indirect does not depend on the cost object. 
B) A direct cost is one that can be easily traced to the particular cost object. 
C) The factory manager's salary would be classified as an indirect cost of producing one unit of product. 
D) A particular cost may be direct or indirect, depending on the cost object.

Question 16

The cost of shipping parts from a supplier is considered a period cost.

Accepted Answer

A) True 
 B)False

Question 17

The relative proportion of variable, fixed, and mixed costs in a company is known as the company's:

Accepted Answer

A) contribution margin. 
B) cost structure. 
C) product mix. 
D) relevant range. 
A) contribution margin. 
B) cost structure. 
C) product mix. 
D) relevant range.

Question 18

Contribution format income statements are prepared primarily for external reporting purposes

Accepted Answer

A) True 
 B)False

Question 19

Fixed costs expressed on a per unit basis:

Accepted Answer

A) increase with increases in activity. 
B) decrease with increases in activity. 
C) are not affected by activity. 
D) should be ignored in making decisions since they cannot change. 
A) increase with increases in activity. 
B) decrease with increases in activity. 
C) are not affected by activity. 
D) should be ignored in making decisions since they cannot change.

Question 20

What is the total amount of the costs listed above that are NOT direct costs of the Northridge Store?

Accepted Answer

A) $152,000 
B) $33,000 
C) $45,000 
D) $77,000 
A) $152,000 
B) $33,000 
C) $45,000 
D) $77,000

Exam 1: Managerial Accounting and Cost Concepts

The sum of all manufacturing costs except for direct materials and direct labor is called manufacturing overhead.

Selling costs are indirect costs.

Which of the following is NOT a period cost?

Meginnis Corporation's relevant range of activity is 3,000 units to 7,000 units.When it produces and sells 5,000 units, its average costs per unit are as follows: If 6,000 units are produced, the total amount of direct manufacturing cost incurred is closest to:

To the nearest whole cent, what should be the average property tax per unit at a sales volume of 37,300 units? (Assume that this sales volume is within the relevant range.)

If 25,000 books are sold during the second quarter and this activity is within the relevant range, the company's expected contribution margin would be:

Fiori Corporation's relevant range of activity is 3,000 units to 7,000 units.When it produces and sells 5,000 units, its average costs per unit are as follows: The incremental manufacturing cost that the company will incur if it increases production from 5,000 to 5,001 units is closest to:

Prime cost consists of:

Perteet Corporation's relevant range of activity is 3,000 units to 7,000 units.When it produces and sells 5,000 units, its average costs per unit are as follows: If 4,000 units are produced, the total amount of manufacturing overhead cost is closest to:

Morrisroe Corporation has provided the following information: Required: a.If the selling price is $25.90 per unit, what is the contribution margin per unit sold? b.What incremental manufacturing cost will the company incur if it increases production from 5,000 to 5,001 units?

Wofril Corporation uses the cost formula Y = $5,300 + $0.60X for the maintenance cost, where X is machine-hours.The August budget is based on 8,000 hours of planned machine time.Maintenance cost expected to be incurred during August is:

The total of the product costs listed above for September is:

Gabel Inc.is a merchandising company.Last month the company's merchandise purchases totaled $63,000.The company's beginning merchandise inventory was $13,000 and its ending merchandise inventory was $15,000.What was the company's cost of goods sold for the month?

In making the decision to buy the model 240 machine rather than the model 310 machine, the differential cost was:

Which of the following statements concerning direct and indirect costs is NOT true?

The cost of shipping parts from a supplier is considered a period cost.

The relative proportion of variable, fixed, and mixed costs in a company is known as the company's:

Contribution format income statements are prepared primarily for external reporting purposes

Fixed costs expressed on a per unit basis:

What is the total amount of the costs listed above that are NOT direct costs of the Northridge Store?

Job-Order Costing: Calculating Unit Product Costs

Job-Order Costing: Cost Flows and External Reporting

Activity-Based Costing

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Master Budgeting

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Flexible Budgets Standard Costs and Variance Analysis

Statement of Cash Flows

Financial Statement Analysis

Job-Order Costing: Cost Flows and External Reporting

Process Costing6 Cost-Volume-Profit Relationships

Cost-Volume-Profit Relationships

Flexible Budgets, Standard Costs, and Variance Analysis

Flexible Budgets, Standard Costs, and Variance Analysis

A Capital Budgeting Decisions

A Statement of Cash Flows

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