Question 1

A manufacturer's inventory consists of merchandise inventory, work in process inventory, and finished goods inventory.

Accepted Answer

A) True 
 B)False

Question 2

Both merchandising and manufacturing businesses produce their own products, but service businesses do not.

Accepted Answer

A) True 
 B)False

Question 3

Management is accountable to communities in which of the following ways?

Accepted Answer

A)  Making timely payments to creditors 
B)  Ensuring the company's environmental impact is not harmful to its area of operations 
C)  Providing a return on the owner's shareholders' investment 
D)  Obeying laws and paying taxes 
A)  Making timely payments to creditors 
B)  Ensuring the company's environmental impact is not harmful to its area of operations 
C)  Providing a return on the owner's shareholders' investment 
D)  Obeying laws and paying taxes

Question 4

Excellent Company sells accounting textbooks. The following information summarizes Excellent's operating activities for 2012:
 $$\begin{array} { |l | r| } 
\hline \text { Nerchendise inventory, Janury } 1,2012 & \$ 10,000 \
\hline \text { Nerchendise inventory, Decenber } 31,2012 & \$ 7,000 \
\hline \text { Purcheses } & \$ 95,000 \
\hline \text { Selling and Adrminitrative Expenses } & \$ 65,000 \
\hline \text { Sales Reverue } & \$ 180,000 \
\hline
\end{array}$$  
-
Required: Prepare an income statement for the year ended December 31, 2012. Please use the format provided below, and include a vertical analysis showing percentages rounded to the nearest tenth of a percent.
 $\begin{array}{|l|l|r|r|}
\hline \quad\quad\quad\quad\quad\quad\quad&\quad\quad\quad\quad&\quad\quad\quad&\quad\quad\quad\
\hline &&&\
\hline &&&\
\hline &&&\
\hline &&&\
\hline &&&\
\hline &&&\
\hline &&&\
\hline &&&\
\hline &&&\
\hline &&&\
\hline &&&\
\hline
\end{array}$

Accepted Answer

\[\begin{array} { | l | r | r | r | } 
\

Question 5

Which of the following statements is INCORRECT?

Accepted Answer

A)  The primary users of management accounting are the company's managers. 
B)  Management accounting information is used to help managers plan and control their operations. 
C)  Management accounting information does not require an external audit. 
D)  Management accounting information is required to comply with generally accepted accounting principles. 
A)  The primary users of management accounting are the company's managers. 
B)  Management accounting information is used to help managers plan and control their operations. 
C)  Management accounting information does not require an external audit. 
D)  Management accounting information is required to comply with generally accepted accounting principles.

Question 6

Harrison Company reports the following cost information for August:
$\begin{array}{|r|r|}
\hline \text { Cost of goods manufactured } & \$ 135,800 \
\hline \text { Direct materials used } & 25,300 \
\hline \text { Work in process inventory, Aug. 1 } & 22,500 \
\hline \text { Work in process inventory, Aug. 31 } & 18,500 \
\hline \text { Direct labor incurred } & 63,900 \
\hline
\end{array}$
-
What is the amount of manufacturing overhead incurred by Harrison Company in August?

Accepted Answer

A)  $25,300 
B)  $61,944 
C)  $42,600 
D)  $63,900 
A)  $25,300 
B)  $61,944 
C)  $42,600 
D)  $63,900

Question 7

Wright Company reports production costs for 2012 as follows:
$\begin{array}{|l|l|}
\hline \text { Direct materials used } & \$ 375,000 \
\hline \text { Direct labor incurred } & \$ 250,000 \
\hline \text { Manufacturing overhead incurred } & \$ 400,000 \
\hline \text { Operating expenses } & \$ 145,000\
\hline 
\end{array}$
-
How much are Wright Company's period costs?

Accepted Answer

A)  $250,000 
B)  $575,000 
C)  $145,000 
D)  $375,000 
A)  $250,000 
B)  $575,000 
C)  $145,000 
D)  $375,000

Question 8

For a manufacturing business, which of the following would be included in manufacturing overhead?

Accepted Answer

A)  Direct materials cost 
B)  Indirect materials cost 
C)  Direct labor 
D)  Advertising 
A)  Direct materials cost 
B)  Indirect materials cost 
C)  Direct labor 
D)  Advertising

Question 9

Excellent Company sells accounting textbooks. The following information summarizes Excellent's operating activities for 2012:
 $$\begin{array} {| l | r |} 
\hline\text { Nerchendise inventory, Janury } 1,2012 & \$ 10,000 \
\hline \text { Nerchendise inventory, Decenber } 31,2012 & \$ 7,000 \
\hline \text { Purcheses } & \$ 95,000 \
\hline \text { Selling and Adrminitrative Expenses } & \$ 65,000 \
\hline \text { Sales Reverue } & \$ 180,000 \
\hline
\end{array}$$ 
-
Required: Prepare an income statement for the year ended December 31, 2012. Please use the format provided below, and include a vertical analysis showing percentages rounded to the nearest tenth of a percent.
 $$\begin{array} { | l | l | l | l | } 
\hline \text { Sales revenue } &\quad\quad &\quad\quad &\quad\quad \
\hline \text { Cost of goods sold } & & & \
\hline \text { Beginning inventory } & & & \
\hline \text { Purchases } & & & \
\hline \text { Cost of goods available for sale } & & & \
\hline \text { Ending inventory } & & & \
\hline \text { Cost of goods sold } & & & \
\hline \text { Gross profit } & & & \
\hline \text { Selling and administrative expenses } & & & \
\hline \text { Net income/(loss) } & & & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | r | r | r | } 
\

Question 10

At the beginning of 2011, the Taylor Company's work in process inventory account had a balance of $30,000. During 2011, $68,000 of direct materials were used in production, and $66,000 of direct labor costs were incurred. Manufacturing overhead in 2011 amounted to $90,000. The cost of goods manufactured was $220,000 in 2011. What is the balance in work in process inventory on December 31, 2011?

Accepted Answer

A)  $24,000 
B)  $66,000 
C)  $6,000 
D)  $34,000 
A)  $24,000 
B)  $66,000 
C)  $6,000 
D)  $34,000

Question 11

Given the following information, determine the cost of goods sold.
$\begin{array}{|r|r|}
\hline \text { Direct labor incurred } & \$ 126,000 \
\hline \text { Manufacturing overhead incurred } & 359,000 \
\hline \text { Direct materials used } & 1,000 \
\hline \text { Finished goods inventory, } 1 / 1 / 2012 & 395,000 \
\hline \text { Finished goods inventory, } 12 / 31 / 2012 & 442,000 \
\hline \text { Work in process inventory, } 1 / 1 / 2012 & 193,000 \
\hline \text { Work in process inventory, } 12 / 31 / 2012 & 218,000 \
\hline
\end{array}$

Accepted Answer

A)  $781,000 
B)  $461,000 
C)  $731,000 
D)  $414,000 
A)  $781,000 
B)  $461,000 
C)  $731,000 
D)  $414,000

Question 12

South State Company used $71,000 of direct materials and incurred $37,000 of direct labor costs during 2012. Indirect labor amounted to $2,700 while indirect materials used totaled $1,600. Other operating costs pertaining to the factory included utilities of $3,100; maintenance of $4,500; repairs of $1,800; depreciation of $7,900; and property taxes of $2,600. There was no beginning or ending finished goods inventory, but work in process inventory began the year with a $5,500 balance and ended the year with a $7,500 balance.
How much is the cost of goods manufactured?

Accepted Answer

A)  $124,700 
B)  $130,200 
C)  $137,700 
D)  $132,200 
A)  $124,700 
B)  $130,200 
C)  $137,700 
D)  $132,200

Question 13

For a manufacturing business, which of the following would be considered an inventoriable product cost?

Accepted Answer

A)  Research and development 
B)  Factory janitorial services 
C)  Advertising 
D)  Delivery costs 
A)  Research and development 
B)  Factory janitorial services 
C)  Advertising 
D)  Delivery costs

Question 14

Repair and maintenance costs for factory equipment are product costs.

Accepted Answer

A) True 
 B)False

Question 15

During the past century, many developed economies have shifted their focus from a service economy to a manufacturing economy.

Accepted Answer

A) True 
 B)False

Question 16

You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company's bonds. Which IMA guideline has been violated?

Accepted Answer

A)  Integrity 
B)  Confidentiality 
C)  Competence 
D)  Objectivity 
A)  Integrity 
B)  Confidentiality 
C)  Competence 
D)  Objectivity

Question 17

Arturo Manufacturing Company provided the following information for the year 2012:
$$\begin{array} { l r } 
\text { Beginning balance-work in process inventory } & \$ 12,000 \
\text { Ending balance-work in process inventory } & \$ 28,000 \
\text { Beginning balance-direct materials inventory } & \$ 42,000 \
\text { Ending balance-direct materials inventory } & \$ 30,000 \
\text { Purchases-direct materials } & \$ 180,000 \
\text { Direct labor } & \$ 235,000 \
\text { Indirect materials } & \$ 23,500 \
\text { Indirect labor } & \$ 9,500 \
\text { Depreciation on factory plant \& equipment } & \$ 12,000 \
\text { Plant utilities \& insurance } & \$ 135,000
\end{array}$$
What was the amount of direct materials used in production?

Accepted Answer

A)  $210,000 
B)  $150,000 
C)  $192,000 
D)  $252,000 
A)  $210,000 
B)  $150,000 
C)  $192,000 
D)  $252,000

Question 18

Factory rent, taxes and insurance are included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements about managerial accounting is CORRECT?

Accepted Answer

A)  Managerial accounting reports are audited annually by Certified Public Accountants. 
B)  Managerial accounting reports help investors make decisions. 
C)  Managerial accounting reports provide detailed information on parts of a company. 
D)  Managerial accounting reports must follow Generally Accepted Accounting principles (GAAP). 
A)  Managerial accounting reports are audited annually by Certified Public Accountants. 
B)  Managerial accounting reports help investors make decisions. 
C)  Managerial accounting reports provide detailed information on parts of a company. 
D)  Managerial accounting reports must follow Generally Accepted Accounting principles (GAAP).

Question 20

Transportation costs to ship products to customers are product costs.

Accepted Answer

A) True 
 B)False

A manufacturer's inventory consists of merchandise inventory, work in process inventory, and finished goods inventory.

Both merchandising and manufacturing businesses produce their own products, but service businesses do not.

Management is accountable to communities in which of the following ways?

Which of the following statements is INCORRECT?

Wright Company reports production costs for 2012 as follows: Direct materials used \ 375,000 Direct labor incurred \ 250,000 Manufacturing overhead incurred \ 400,000 Operating expenses \ 145,000 - How much are Wright Company's period costs?

For a manufacturing business, which of the following would be included in manufacturing overhead?

For a manufacturing business, which of the following would be considered an inventoriable product cost?

Repair and maintenance costs for factory equipment are product costs.

During the past century, many developed economies have shifted their focus from a service economy to a manufacturing economy.

You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company's bonds. Which IMA guideline has been violated?

Factory rent, taxes and insurance are included in manufacturing overhead.

Which of the following statements about managerial accounting is CORRECT?

Transportation costs to ship products to customers are product costs.

Corporations: Paid-In Capital and the Balance Sheet

Corporations: Effects on Retained Earnings and the Income Statement

The Statement of Cash Flows

Financial Statement Analysis

Job Order and Process Costing

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

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Exam 16: Introduction to Management Accounting

A manufacturer's inventory consists of merchandise inventory, work in process inventory, and finished goods inventory.

Both merchandising and manufacturing businesses produce their own products, but service businesses do not.

Management is accountable to communities in which of the following ways?

Which of the following statements is INCORRECT?

Wright Company reports production costs for 2012 as follows: Direct materials used \ 375,000 Direct labor incurred \ 250,000 Manufacturing overhead incurred \ 400,000 Operating expenses \ 145,000 - How much are Wright Company's period costs?

For a manufacturing business, which of the following would be included in manufacturing overhead?

For a manufacturing business, which of the following would be considered an inventoriable product cost?

Repair and maintenance costs for factory equipment are product costs.

During the past century, many developed economies have shifted their focus from a service economy to a manufacturing economy.

You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company's bonds. Which IMA guideline has been violated?

Factory rent, taxes and insurance are included in manufacturing overhead.

Which of the following statements about managerial accounting is CORRECT?

Transportation costs to ship products to customers are product costs.

Corporations: Paid-In Capital and the Balance Sheet

Corporations: Effects on Retained Earnings and the Income Statement

The Statement of Cash Flows

Financial Statement Analysis

Job Order and Process Costing

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Filters