Question 1

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

Accepted Answer

A) $154,500 
B) $56,000 
C) $38,000 
D) $46,000 
A) $154,500 
B) $56,000 
C) $38,000 
D) $46,000

Question 2

Schlabig & Associates,a public accounting firm that provides business consulting to a consumer,is what type of company?

Accepted Answer

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

Question 3

Which of the following items could be found in work in process inventory at a candy bar manufacturer?

Accepted Answer

A) Candy bars made but not coated in chocolate 
B) Cocoa products to make candy bars 
C) Sugar products to make candy bars 
D) Candy bars completed but not yet sold 
A) Candy bars made but not coated in chocolate 
B) Cocoa products to make candy bars 
C) Sugar products to make candy bars 
D) Candy bars completed but not yet sold

Question 4

Sally wants to purchase a new sofa because she purchased a new home at the beach.Sally visited two stores and she narrowed down her choices to a red sofa and a blue sofa.Sally owns pets so she considers the cost of insurance to insure each sofa.Sally compiled the following data and she realizes that the sales tax to purchase the sofa is 10% in her state.   
Which sofa should Sally purchase? What costs are relevant in her decision? Why?

Accepted Answer

Sally should purchase the blue sofa.The

Question 5

When making a decision to buy a new computer,all of the following should be considered except

Accepted Answer

A) differential costs. 
B) relevant costs. 
C) qualitative characteristics. 
D) sunk costs. 
A) differential costs. 
B) relevant costs. 
C) qualitative characteristics. 
D) sunk costs.

Question 6

Selected financial information for Brookeville Manufacturing is presented in the following table (000s omitted).
 
What was the cost of direct materials used?

Accepted Answer

A) $600 
B) $380 
C) $420 
D) $400 
A) $600 
B) $380 
C) $420 
D) $400

Question 7

Decision making is guided only by differential costs.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) $217,000 
B) $23,000 
C) $20,000 
D) $151,000 
A) $217,000 
B) $23,000 
C) $20,000 
D) $151,000

Question 9

Which of the following is an example of a fixed cost for a manufacturer?

Accepted Answer

A) Income Taxes 
B) Machine Repair Expense 
C) Fire Insurance on buildings 
D) Delivery Fuel Expense 
A) Income Taxes 
B) Machine Repair Expense 
C) Fire Insurance on buildings 
D) Delivery Fuel Expense

Question 10

London Plastics has monthly fixed costs of $84,000,while its variable costs are $4.00 per unit.If the sales price of a unit is $15.00 and London Plastics sell 14,000 units,the company's average fixed costs per unit will be

Accepted Answer

A) $6.00 per unit. 
B) $10.00 per unit. 
C) $4.00 per unit. 
D) $11.00 per unit. 
A) $6.00 per unit. 
B) $10.00 per unit. 
C) $4.00 per unit. 
D) $11.00 per unit.

Question 11

Receipt of materials is part of the firm's value chain.

Accepted Answer

A) True 
 B)False

Question 12

All of the following items would be found in raw materials inventory for a furniture manufacturer except

Accepted Answer

A) wood. 
B) fabric. 
C) steel framing. 
D) assembly worker wages. 
A) wood. 
B) fabric. 
C) steel framing. 
D) assembly worker wages.

Question 13

A company is deciding whether to purchase production equipment that can produce units more quickly than the current equipment.Which of the following costs would be relevant to its decision?

Accepted Answer

A) The cost of the new equipment 
B) The salary of the factory manager 
C) The cost of raw materials 
D) The original purchase price of the current machinery 
A) The cost of the new equipment 
B) The salary of the factory manager 
C) The cost of raw materials 
D) The original purchase price of the current machinery

Question 14

Joe's Bottling Company provided the following expense information for July:
 
What is the total cost for the distribution category of the value chain?

Accepted Answer

A) $40,000 
B) $43,000 
C) $219,000 
D) $171,000 
A) $40,000 
B) $43,000 
C) $219,000 
D) $171,000

Question 15

Which of the following types of companies has raw materials,work in process and finished goods inventory?

Accepted Answer

A) Retailers 
B) Manufacturers 
C) Wholesalers 
D) Service companies 
A) Retailers 
B) Manufacturers 
C) Wholesalers 
D) Service companies

Question 16

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 17

Selected information regarding a company's most recent quarter follows (all data in thousands).
 
What was the beginning finished goods inventory?

Accepted Answer

A) $2,100 
B) $500 
C) $710 
D) $800 
A) $2,100 
B) $500 
C) $710 
D) $800

Question 18

How do variable costs per unit behave?

Accepted Answer

A) They decrease as production increases. 
B) They increase as production decreases. 
C) They decrease as production decreases. 
D) They remain the same throughout production levels within the relevant range. 
A) They decrease as production increases. 
B) They increase as production decreases. 
C) They decrease as production decreases. 
D) They remain the same throughout production levels within the relevant range.

Question 19

What type of company resells tangible products it purchases ready-made from suppliers?

Accepted Answer

A) Merchandiser 
B) Retailer 
C) Wholesaler 
D) All of the above 
A) Merchandiser 
B) Retailer 
C) Wholesaler 
D) All of the above

Question 20

Which of the following is an example of a period cost when manufacturing products?

Accepted Answer

A) Depreciation expense on factory equipment 
B) Advertising expense 
C) Indirect materials used in the factory 
D) Property taxes on the plant 
A) Depreciation expense on factory equipment 
B) Advertising expense 
C) Indirect materials used in the factory 
D) Property taxes on the plant

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

Schlabig & Associates,a public accounting firm that provides business consulting to a consumer,is what type of company?

Which of the following items could be found in work in process inventory at a candy bar manufacturer?

When making a decision to buy a new computer,all of the following should be considered except

Selected financial information for Brookeville Manufacturing is presented in the following table (000s omitted). What was the cost of direct materials used?

Decision making is guided only by differential costs.

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

Which of the following is an example of a fixed cost for a manufacturer?

London Plastics has monthly fixed costs of $84,000,while its variable costs are $4.00 per unit.If the sales price of a unit is $15.00 and London Plastics sell 14,000 units,the company's average fixed costs per unit will be

Receipt of materials is part of the firm's value chain.

All of the following items would be found in raw materials inventory for a furniture manufacturer except

A company is deciding whether to purchase production equipment that can produce units more quickly than the current equipment.Which of the following costs would be relevant to its decision?

Joe's Bottling Company provided the following expense information for July: What is the total cost for the distribution category of the value chain?

Which of the following types of companies has raw materials,work in process and finished goods inventory?

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

Selected information regarding a company's most recent quarter follows (all data in thousands). What was the beginning finished goods inventory?

How do variable costs per unit behave?

What type of company resells tangible products it purchases ready-made from suppliers?

Which of the following is an example of a period cost when manufacturing products?

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

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

Schlabig & Associates,a public accounting firm that provides business consulting to a consumer,is what type of company?

Which of the following items could be found in work in process inventory at a candy bar manufacturer?

When making a decision to buy a new computer,all of the following should be considered except

Selected financial information for Brookeville Manufacturing is presented in the following table (000s omitted). What was the cost of direct materials used?

Decision making is guided only by differential costs.

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

Which of the following is an example of a fixed cost for a manufacturer?

London Plastics has monthly fixed costs of $84,000,while its variable costs are $4.00 per unit.If the sales price of a unit is $15.00 and London Plastics sell 14,000 units,the company's average fixed costs per unit will be

Receipt of materials is part of the firm's value chain.

All of the following items would be found in raw materials inventory for a furniture manufacturer except

A company is deciding whether to purchase production equipment that can produce units more quickly than the current equipment.Which of the following costs would be relevant to its decision?

Joe's Bottling Company provided the following expense information for July: What is the total cost for the distribution category of the value chain?

Which of the following types of companies has raw materials,work in process and finished goods inventory?

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

Selected information regarding a company's most recent quarter follows (all data in thousands). What was the beginning finished goods inventory?

How do variable costs per unit behave?

What type of company resells tangible products it purchases ready-made from suppliers?

Which of the following is an example of a period cost when manufacturing products?

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