Question 1

A budget is a managerial accounting tool used in the planning process.

Accepted Answer

A) True 
 B)False

Question 2

Indirect materials costs such as lubes and cleaning fluids are product costs.

Accepted Answer

A) True 
 B)False

Question 3

Manufacturing businesses have inventory accounts, but merchandising businesses do not.

Accepted Answer

A) True 
 B)False

Question 4

Star Health Inc. is a fitness center in Oklahoma City. In October, the company earned
$550,000 in revenues and incurred the following operating costs from 340 customers:   Required: Prepare Star Health's income statement for the month of October.

Accepted Answer

The answer of Star Health Inc. is a fitness center...

Question 5

Crabapples Inc. purchases and sells dry fruit boxes. The following information summarizes its operating activities for 2015:   If Crabapples sold 5,000 boxes of dry fruits during the year, what is the cost per box of dry fruits?

Accepted Answer

A) $72.28 
B) $32.75 
C) $10.55 
D) $19.75 
A) $72.28 
B) $32.75 
C) $10.55 
D) $19.75

Question 6

In a manufacturing firm, which of the following is an example of a period cost?

Accepted Answer

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

Question 7

Nurix Inc. is a business consulting firm. During the month of February, Nurix earned $55,400 of revenues by providing services to 45 clients. Operating expenses for February were $8,500 and non-operating expenses were $4,500. What is the cost per service?

Accepted Answer

A) $100.00 
B) $188.88 
C) $942.22 
D) $288.00 
A) $100.00 
B) $188.88 
C) $942.22 
D) $288.00

Question 8

Star Health Inc. is a fitness center in Oklahoma City. In October, the company earned $550,000 in revenues and incurred the following operating costs from 340 customers:   How much is the unit cost per customer service?

Accepted Answer

A) $795.00 
B) $749.12 
C) $1,617.65 
D) $822.65 
A) $795.00 
B) $749.12 
C) $1,617.65 
D) $822.65

Question 9

Transportation costs paid to ship raw materials to a company warehouse are considered product costs.

Accepted Answer

A) True 
 B)False

Question 10

Cost per service is calculated by dividing total costs by total number of services provided.

Accepted Answer

A) True 
 B)False

Question 11

Jasper Inc. reports the following cost information for March:   What is the amount of direct labor incurred by Jasper in March?

Accepted Answer

A) $29,600 
B) $39,870 
C) $126,970 
D) $23,030 
A) $29,600 
B) $39,870 
C) $126,970 
D) $23,030

Question 12

The following information relates to Webster Inc.:   How much were Webster's product costs?

Accepted Answer

A) $141,897 
B) $697,127 
C) $229,127 
D) $87,230 
A) $141,897 
B) $697,127 
C) $229,127 
D) $87,230

Question 13

Which of the following is an objective of management accounting?

Accepted Answer

A) to generate financial statements of a company for tax reporting 
B) to provide information to business managers to assist them in controlling their business 
C) to provide information to shareholders to assist them with their investment decisions 
D) to ensure that the reports produced for internal and external business purposes are GAAP compliant 
A) to generate financial statements of a company for tax reporting 
B) to provide information to business managers to assist them in controlling their business 
C) to provide information to shareholders to assist them with their investment decisions 
D) to ensure that the reports produced for internal and external business purposes are GAAP compliant

Question 14

Salary of a factory manager will be included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 15

________ is a philosophy of continuous improvement of products and processes.

Accepted Answer

A) Just-in-time (JIT)management 
B) Enterprise resource planning (ERP) 
C) Supply chain management 
D) Total quality management (TQM) 
A) Just-in-time (JIT)management 
B) Enterprise resource planning (ERP) 
C) Supply chain management 
D) Total quality management (TQM)

Question 16

Manufacturing businesses produce their own products, but merchandising businesses do not.

Accepted Answer

A) True 
 B)False

Question 17

In a manufacturing firm, advertising and marketing costs are examples of period costs.

Accepted Answer

A) True 
 B)False

Question 18

Simons Company sells plastic ware. The following information summarizes Simons' operating activities for 2015:   Prepare an income statement for Simons Company, a merchandiser, for the year ended December 31, 2015 using the format below:

Accepted Answer

The answer of Simons Company sells plastic ware. The following...

Question 19

Which of the following correctly describes the accounting for advertising costs?

Accepted Answer

A) Advertising costs are product costs and are expensed as incurred. 
B) Advertising costs are period costs and are expensed as incurred. 
C) Advertising costs are product costs and are expensed when the manufactured product is sold. 
D) Advertising costs are period costs and are expensed when the manufactured product is sold. 
A) Advertising costs are product costs and are expensed as incurred. 
B) Advertising costs are period costs and are expensed as incurred. 
C) Advertising costs are product costs and are expensed when the manufactured product is sold. 
D) Advertising costs are period costs and are expensed when the manufactured product is sold.

Exam 18: Introduction to Managerial Accounting

A budget is a managerial accounting tool used in the planning process.

Indirect materials costs such as lubes and cleaning fluids are product costs.

Manufacturing businesses have inventory accounts, but merchandising businesses do not.

Star Health Inc. is a fitness center in Oklahoma City. In October, the company earned $550,000 in revenues and incurred the following operating costs from 340 customers: Required: Prepare Star Health's income statement for the month of October.

Crabapples Inc. purchases and sells dry fruit boxes. The following information summarizes its operating activities for 2015: If Crabapples sold 5,000 boxes of dry fruits during the year, what is the cost per box of dry fruits?

In a manufacturing firm, which of the following is an example of a period cost?

Nurix Inc. is a business consulting firm. During the month of February, Nurix earned $55,400 of revenues by providing services to 45 clients. Operating expenses for February were $8,500 and non-operating expenses were $4,500. What is the cost per service?

Star Health Inc. is a fitness center in Oklahoma City. In October, the company earned $550,000 in revenues and incurred the following operating costs from 340 customers: How much is the unit cost per customer service?

Transportation costs paid to ship raw materials to a company warehouse are considered product costs.

Cost per service is calculated by dividing total costs by total number of services provided.

Jasper Inc. reports the following cost information for March: What is the amount of direct labor incurred by Jasper in March?

The following information relates to Webster Inc.: How much were Webster's product costs?

Which of the following is an objective of management accounting?

Salary of a factory manager will be included in manufacturing overhead.

________ is a philosophy of continuous improvement of products and processes.

Manufacturing businesses produce their own products, but merchandising businesses do not.

In a manufacturing firm, advertising and marketing costs are examples of period costs.

Simons Company sells plastic ware. The following information summarizes Simons' operating activities for 2015: Prepare an income statement for Simons Company, a merchandiser, for the year ended December 31, 2015 using the format below:

Which of the following correctly describes the accounting for advertising costs?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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