Question 1

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

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 2

Which of the following types of company is the fastest growing in the United States?

Accepted Answer

A) Service 
B) Merchandising 
C) Manufacturing 
D) None of the above 
A) Service 
B) Merchandising 
C) Manufacturing 
D) None of the above

Question 3

Selected financial information for Sunnydale Manufacturing is presented in the following table (000s omitted). $\begin{array}{|l|ll|}
\hline \text { Sales revenue } & \$ & 4,000 \
\hline \text { Purchases of direct materials } & \$ & 500 \
\hline \text { Direct labor } & \$ & 450 \
\hline \text { Manufacturing overhead } & \$ & 620 \
\hline \text { Operating expenses } & \$ & 700 \
\hline \text { Beginning raw materials inventory } & \$ & 150 \
\hline \text { Ending raw materials inventory } & \$ & 170 \
\hline \text { Beginning work in process inventory } & \$ & 320 \
\hline \text { Ending work in process inventory } & \$ & 310 \
\hline \text { Beginning finished goods inventory } & \$ & 250 \
\hline \text { Ending finished goods inventory } & \$ & 200 \
\hline
\end{array}$  
-What was cost of goods manufactured?

Accepted Answer

A) $1,560 
B) $1,540 
C) $1,580 
D) $1,550 
A) $1,560 
B) $1,540 
C) $1,580 
D) $1,550

Question 4

Wal-Mart classifies its clothing held for sale as:

Accepted Answer

A) finished goods inventory. 
B) raw materials inventory. 
C) work in process inventory. 
D) merchandise inventory. 
A) finished goods inventory. 
B) raw materials inventory. 
C) work in process inventory. 
D) merchandise inventory.

Question 5

Indirect costs can be traced to specific units.

Accepted Answer

A) True 
 B)False

Question 6

Farm Fresh Dairy provided the following expense information for May: $$\begin{array} { | l | r | } 
\hline \text { Assembly-line warkers' wages } & \$ 72,000 \
\hline \text { Caps for milk bottles } & 2,000 \
\hline \text { Reconfigurig the assembly line } & 155,000 \
\hline \text { Custamer support hotline } & 8,000 \
\hline \text { Delivery expenses } & 17,000 \
\hline \text { Depreciation an factory equipment } & 81,000 \
\hline \text { Plastic milk bottles } & 52,000 \
\hline \text { Salaries of salespegple } & 63,000 \
\hline \text { Salaries of research scientists } & 84,000 \
\hline \text { Custamer toll-free order line } & 4,000 \
\hline
\end{array}$$ 
-What is the total cost for the production category of the value chain?

Accepted Answer

A) $538,000 
B) $52,000 
C) $207,000 
D) $374,000 
A) $538,000 
B) $52,000 
C) $207,000 
D) $374,000

Question 7

Farm Supply plans to make 10,000 tractors at its plant.Fixed costs are $1,000,000 and variable costs are $500 per tractor.What is the average cost per tractor?

Accepted Answer

A) $600 
B) $500 
C) $100 
D) None of the above 
A) $600 
B) $500 
C) $100 
D) None of the above

Question 8

Summerville Company sells office supplies.The following information summarizes the company's operating activities for the year: $$\begin{array} { | l | r | } 
\hline \text { Utilities far the stare } &\$8 , 0 0 0  \
\hline \text { Sales comrissions } & 11,000 \
\hline \text { Sales revenue } & 151,000 \
\hline \text { Purchases of merchandise } & 73,000 \
\hline \text { January 1 inventary } & 27,000 \
\hline \text { Rent for stare } & 12,000 \
\hline \text { December 31 inventory } & 23,000 \
\hline
\end{array}$$ 
-What is cost of goods sold?

Accepted Answer

A) $ 73,000 
B) $ 93,000 
C) $100,000 
D) $ 77,000 
A) $ 73,000 
B) $ 93,000 
C) $100,000 
D) $ 77,000

Question 9

A company has fixed costs of $75,000 per month.If sales double from 5,000 to 10,000 units during the month,fixed costs will:

Accepted Answer

A) remain the same. 
B) double. 
C) be cut in half. 
D) be none of the above. 
A) remain the same. 
B) double. 
C) be cut in half. 
D) be none of the above.

Question 10

Getting to school for your 8
A.M.class doesn't leave much time for breakfast,and you are quite hungry by the time class ends.It is a long walk to the cafeteria,the lines are long once you get there,and you find yourself having to decide between having breakfast and getting to your next class on time.Many of your friends have expressed the same problem.The administration has agreed to let you set up a table just outside the building where you will sell various snacks for $1 each.You have agreed to pay the administration $500 per month and salaries to your friends to run the business will be another $500 per month.It will cost you 50 cents each to buy the pre- packaged snacks.You believe you can sell 2,000 snack packs per month.
a.What are the total fixed costs per month?
b.What are the total variable costs per month?
c.What is the fixed cost per snack pack?
d.What is the variable cost per snack pack?
e.What is the average cost per snack pack?
f.What is the average profit margin per snack pack?
g.Based on your analysis,should you start the snack pack business?

Accepted Answer

a.$1,000 ($500 + $500)
b.$1,000 (50 cent

Question 11

Selected financial information for Sunnydale Manufacturing is presented in the following table (000s omitted). $\begin{array}{|l|ll|}
\hline \text { Sales revenue } & \$ & 4,000 \
\hline \text { Purchases of direct materials } & \$ & 500 \
\hline \text { Direct labor } & \$ & 450 \
\hline \text { Manufacturing overhead } & \$ & 620 \
\hline \text { Operating expenses } & \$ & 700 \
\hline \text { Beginning raw materials inventory } & \$ & 150 \
\hline \text { Ending raw materials inventory } & \$ & 170 \
\hline \text { Beginning work in process inventory } & \$ & 320 \
\hline \text { Ending work in process inventory } & \$ & 310 \
\hline \text { Beginning finished goods inventory } & \$ & 250 \
\hline \text { Ending finished goods inventory } & \$ & 200 \
\hline
\end{array}$ 
- What was operating income?

Accepted Answer

A) $1,690 
B) $2,430 
C) $3,300 
D) $4,000 
A) $1,690 
B) $2,430 
C) $3,300 
D) $4,000

Question 12

Which of the following represents a sunk cost?

Accepted Answer

A) A historical cost that is never relevant 
B) A historical cost that is always relevant 
C) An outlay expected to be incurred in the future 
D) A cost that is relevant to any decision 
A) A historical cost that is never relevant 
B) A historical cost that is always relevant 
C) An outlay expected to be incurred in the future 
D) A cost that is relevant to any decision

Question 13

When manufacturing products,direct labor and direct materials are classified as:

Accepted Answer

A) period costs and expensed when incurred. 
B) period costs and expensed when the goods are sold. 
C) product costs and expensed when incurred. 
D) product costs and expensed when the goods are sold. 
A) period costs and expensed when incurred. 
B) period costs and expensed when the goods are sold. 
C) product costs and expensed when incurred. 
D) product costs and expensed when the goods are sold.

Question 14

The promotion of products and services is known as:

Accepted Answer

A) customer service. 
B) design. 
C) distribution. 
D) marketing. 
A) customer service. 
B) design. 
C) distribution. 
D) marketing.

Question 15

Summerville Company sells office supplies.The following information summarizes the company's operating activities for the year: $$\begin{array} { | l | r | } 
\hline \text { Utilities far the stare } & \$8 , 0 0 0 \
\hline \text { Sales comrissions } & 11,000 \
\hline \text { Sales revenue } & 151,000 \
\hline \text { Purchases of merchandise } & 73,000 \
\hline \text { January 1 inventary } & 27,000 \
\hline \text { Rent for stare } & 12,000 \
\hline \text { December 31 inventory } & 23,000 \
\hline
\end{array}$$
- What is gross profit?

Accepted Answer

A) $43,000 
B) $82,000 
C) $74,000 
D) $58,000 
A) $43,000 
B) $82,000 
C) $74,000 
D) $58,000

Question 16

The income statements of manufacturing companies are much less complex than those of service or merchandising companies.

Accepted Answer

A) True 
 B)False

Question 17

Certain materials used in a manufacturing plant cannot be traced to a specific unit.These materials are called ____________ materials.

Accepted Answer

A) general 
B) direct 
C) finished 
D) indirect 
A) general 
B) direct 
C) finished 
D) indirect

Question 18

Active Apparel Company reports the following data for its first year of operation. $$\begin{array} { | l | r | } 
\hline \text { Cost of goods manufactured } & \$ 500,000 \
\hline \text { Work in process inventory, bepinging } & 0 \
\hline \text { Work in process inventory, ending } & 120,000 \
\hline \text { Direct materials used } & 85,000 \
\hline \text { Manufacturing overhead } & 100,000 \
\hline \text { Finished goods inventory, ending } & 72,000 \
\hline
\end{array}$$
- What is the cost of goods sold?

Accepted Answer

A) $500,000 
B) $428,000 
C) $685,000 
D) $548,000 
A) $500,000 
B) $428,000 
C) $685,000 
D) $548,000

Question 19

Rent on a factory building would be considered to be:

Accepted Answer

A) a direct cost. 
B) a period cost. 
C) a product cost. 
D) none of the above. 
A) a direct cost. 
B) a period cost. 
C) a product cost. 
D) none of the above.

Question 20

Which of the following is an example of direct labor?

Accepted Answer

A) Salary of a production manager 
B) Salary of the vice-president of operations 
C) Wages of assembly line personnel 
D) Wages of factory security 
A) Salary of a production manager 
B) Salary of the vice-president of operations 
C) Wages of assembly line personnel 
D) Wages of factory security

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

Which of the following types of company is the fastest growing in the United States?

Wal-Mart classifies its clothing held for sale as:

Indirect costs can be traced to specific units.

Farm Supply plans to make 10,000 tractors at its plant.Fixed costs are $1,000,000 and variable costs are $500 per tractor.What is the average cost per tractor?

A company has fixed costs of $75,000 per month.If sales double from 5,000 to 10,000 units during the month,fixed costs will:

Which of the following represents a sunk cost?

When manufacturing products,direct labor and direct materials are classified as:

The promotion of products and services is known as:

The income statements of manufacturing companies are much less complex than those of service or merchandising companies.

Certain materials used in a manufacturing plant cannot be traced to a specific unit.These materials are called ____________ materials.

Rent on a factory building would be considered to be:

Which of the following is an example of direct labor?

Introduction to Managerial Accounting

Job Costing

Activity-Based Costing, lean Production, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Short Term Business Decisions

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

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Exam 2: Building Blocks of Managerial Accounting

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

Which of the following types of company is the fastest growing in the United States?

Wal-Mart classifies its clothing held for sale as:

Indirect costs can be traced to specific units.

Farm Supply plans to make 10,000 tractors at its plant.Fixed costs are $1,000,000 and variable costs are $500 per tractor.What is the average cost per tractor?

A company has fixed costs of $75,000 per month.If sales double from 5,000 to 10,000 units during the month,fixed costs will:

Which of the following represents a sunk cost?

When manufacturing products,direct labor and direct materials are classified as:

The promotion of products and services is known as:

The income statements of manufacturing companies are much less complex than those of service or merchandising companies.

Certain materials used in a manufacturing plant cannot be traced to a specific unit.These materials are called ____________ materials.

Rent on a factory building would be considered to be:

Which of the following is an example of direct labor?

Introduction to Managerial Accounting

Job Costing

Activity-Based Costing, lean Production, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Short Term Business Decisions

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Filters