Question 1

Which of the following is one of the key standards of ethical practice published by the IMA?

Accepted Answer

A)  Objectivity 
B)  Environmental sensitivity 
C)  Technicality 
D)  Confidentiality 
A)  Objectivity 
B)  Environmental sensitivity 
C)  Technicality 
D)  Confidentiality

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is an example of direct labor cost in a factory?

Accepted Answer

A)  Wages of assembly line personnel 
B)  Salary of vice president of production 
C)  Wages of factory security guard 
D)  Salary of production manager 
A)  Wages of assembly line personnel 
B)  Salary of vice president of production 
C)  Wages of factory security guard 
D)  Salary of production manager

Question 4

For a manufacturing business, which of the following would be considered a direct labor cost?

Accepted Answer

A)  Wages of the assembly line staff 
B)  Wages of the factory janitors 
C)  Wages of the factory manager 
D)  Salaries of the internal auditors 
A)  Wages of the assembly line staff 
B)  Wages of the factory janitors 
C)  Wages of the factory manager 
D)  Salaries of the internal auditors

Question 5

Wages and benefits of factory managers are considered as product costs.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Total manufacturing costs to account for during the year minus the ending work-in-process inventory equals the cost of goods manufactured.

Accepted Answer

A) True 
 B)False

Question 8

Crystal Inc. is a merchandiser of stone ornaments. The company sold 15,000 units in 2015. The company has provided the following information: $$\begin{array} { |l | r| } 
\hline \text { Sales Revenue } & \$ 557,000 \
\hline \text { Purchases (excluding freight in) } & 300,000 \
\hline \text { Selling and Administrative Expenses } & 69,000 \
\hline \text { Freight In } & 15,000 \
\hline \text { Beginning Merchandise Inventory } & 45,000 \
\hline \text { Ending Merchandise Inventory } & 55,700 \
\hline
\end{array}$$ What is the cost per unit sold?

Accepted Answer

A)  $20.29 
B)  $15.00 
C)  $23.88 
D)  $12.25 
A)  $20.29 
B)  $15.00 
C)  $23.88 
D)  $12.25

Question 9

The three categories of period costs are direct materials, direct labor, and manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 10

For a manufacturer, rent paid for an office building is an example of a period cost.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is a philosophy designed to integrate all organizational areas in order to provide customers with superior products and services, while meeting organizational goals throughout the value chain?

Accepted Answer

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

Question 12

In which of the following ways is the management of a company accountable to its communities?

Accepted Answer

A)  making timely interest payments to creditors and dividend payments to investors 
B)  ensuring the company's environmental impact is not harmful to its area of operations 
C)  providing a capital return on the shareholders' investment 
D)  repaying principal and interest to the suppliers 
A)  making timely interest payments to creditors and dividend payments to investors 
B)  ensuring the company's environmental impact is not harmful to its area of operations 
C)  providing a capital return on the shareholders' investment 
D)  repaying principal and interest to the suppliers

Question 13

________ 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 14

Managerial accounting is used in manufacturing and merchandising companies, but not in service companies.

Accepted Answer

A) True 
 B)False

Question 15

Samson Inc. reported the following information for the year 2015: $$\begin{array} { | l | r | } 
\hline \text { Service Revenue } & \$ 40,000 \
\hline \text { Operating Expenses } & \$ 23,625 \
\hline \text { Net Income } & \$ 16,375 \
\hline \text { Number of Services Provided for the Year } & 10,500 \
\hline
\end{array}$$ How much was the unit cost per service?

Accepted Answer

A)  $1.56 
B)  $3.20 
C)  $2.25 
D)  $3.81 
A)  $1.56 
B)  $3.20 
C)  $2.25 
D)  $3.81

Question 16

Crystal Inc. is a merchandiser of stone ornaments. The company sold 15,000 units in 2015. The company has provided the following information: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 557,000 \
\hline \text { Purchases (excluding freight in) } & 300,000 \
\hline \text { Selling and Administrative Expenses } & 69,000 \
\hline \text { Freight In } & 15,000 \
\hline \text { Beginning Merchandise Inventory } & 45,000 \
\hline \text { Ending Merchandise Inventory } & 55,700 \
\hline
\end{array}$$ What is the operating income for 2015?

Accepted Answer

A)  $183,700 
B)  $304,300 
C)  $252,700 
D)  $257,000 
A)  $183,700 
B)  $304,300 
C)  $252,700 
D)  $257,000

Question 17

For a manufacturing company, which of the following is a period cost?

Accepted Answer

A)  Direct materials 
B)  Office rent 
C)  Wages expense of factory workers 
D)  Indirect materials 
A)  Direct materials 
B)  Office rent 
C)  Wages expense of factory workers 
D)  Indirect materials

Question 18

Managerial accounting focuses on providing information for internal planning and control.

Accepted Answer

A) True 
 B)False

Question 19

Reed Production has provided the following information for the year 2015: $$\begin{array} { | l | r | } 
\hline \text { Direct Labor } & \$ 153,000 \
\hline \text { Beginning Work-in-Process Inventory } & 62,500 \
\hline \text { Direct Materials Used } & 271,000 \
\hline \text { Ending Work-in-Process Inventory } & 53,850 \
\hline \text { Manufacturing Overhead } & 135,500 \
\hline
\end{array}$$ During the year, Reed produced 71,020 units of product. Calculate the unit product cost.

Accepted Answer

A)  $8.00 
B)  $10.00 
C)  $9.52 
D)  $7.88 
A)  $8.00 
B)  $10.00 
C)  $9.52 
D)  $7.88

Question 20

Kentucky purchases and sells widgets. The following information summarizes Kentucky's operating activities for 2015: $$\begin{array} { | l | r | } 
\hline \text { Selling and Administrative Expenses } & \$ 4,500 \
\hline \text { Purchases } & 157,000 \
\hline \text { Sales Revenue } & 785,000 \
\hline \text { Merchandise Inventory, January 1, 2015 } & 38,250 \
\hline \text { Merchandise Inventory, December 31, 2015 } & 79,000 \
\hline
\end{array}$$ If Kentucky sold 7,500 units of widgets during 2015, how much is the cost for one widget?

Accepted Answer

A)  $50.00 
B)  $15.50 
C)  $26.36 
D)  $16.10 
A)  $50.00 
B)  $15.50 
C)  $26.36 
D)  $16.10

Exam 18: Introduction to Managerial Accounting

Which of the following is one of the key standards of ethical practice published by the IMA?

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

Which of the following is an example of direct labor cost in a factory?

For a manufacturing business, which of the following would be considered a direct labor cost?

Wages and benefits of factory managers are considered as product costs.

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

Total manufacturing costs to account for during the year minus the ending work-in-process inventory equals the cost of goods manufactured.

The three categories of period costs are direct materials, direct labor, and manufacturing overhead.

For a manufacturer, rent paid for an office building is an example of a period cost.

Which of the following is a philosophy designed to integrate all organizational areas in order to provide customers with superior products and services, while meeting organizational goals throughout the value chain?

In which of the following ways is the management of a company accountable to its communities?

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

Managerial accounting is used in manufacturing and merchandising companies, but not in service companies.

Samson Inc. reported the following information for the year 2015: Service Revenue \ 40,000 Operating Expenses \ 23,625 Net Income \ 16,375 Number of Services Provided for the Year 10,500 How much was the unit cost per service?

For a manufacturing company, which of the following is a period cost?

Managerial accounting focuses on providing information for internal planning and control.

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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