Question 1

Straight-line depreciation, rent, and manager salaries are examples of variable costs.

Accepted Answer

A) True 
 B)False  False

Question 2

The Duerr Company manufactures a single product. All raw materials used are traceable to specific units of product. Current information for the Duerr Company follows: $$\begin{array} { l | l } 
\text { Beginging raw materials inventory } & \$ 8,000 \
\hline \text { Ending raw materials inventory } & 11,000 \
\hline \text { Raw material purchases } & 85,000 \
\hline \text { Beginging work in process inventory } & 20,000 \
\hline \text { Ending work in process inventory } & 30,000 \
\hline \text { Direct labor } & 110,000 \
\hline \text { Total factory overhead } & 85,000 \
\hline \text { Beginging finished goods inventory } & 60,000 \
\hline \text { Ending finithed goods inventory } & 40,000
\end{array}$$ The company's cost of raw materials used, cost of goods manufactured and cost of goods sold is:

Accepted Answer

A)  Cost of Materials Used = $82,000 
Cost of Goods Manufactured = $287,000 
Cost of Goods Sold = $247,000 
B)  Cost of Materials Used = $88,000 
Cost of Goods Manufactured = $287,000
 Cost of Goods Sold = $267,000 
C)  Cost of Materials Used = $88,000
 Cost of Goods Manufactured = $267,000
 Cost of Goods Sold = $287,000 
D)  Cost of Materials Used = $82,000 
Cost of Goods Manufactured = $267,000 
Cost of Goods Sold = $287,000 
E)  Cost of Materials Used = $85,000 
Cost of Goods Manufactured = $267,000 
Cost of Goods Sold = $247,000 
A)  Cost of Materials Used = $82,000 
Cost of Goods Manufactured = $287,000 
Cost of Goods Sold = $247,000 
B)  Cost of Materials Used = $88,000 
Cost of Goods Manufactured = $287,000
 Cost of Goods Sold = $267,000 
C)  Cost of Materials Used = $88,000
 Cost of Goods Manufactured = $267,000
 Cost of Goods Sold = $287,000 
D)  Cost of Materials Used = $82,000 
Cost of Goods Manufactured = $267,000 
Cost of Goods Sold = $287,000 
E)  Cost of Materials Used = $85,000 
Cost of Goods Manufactured = $267,000 
Cost of Goods Sold = $247,000 D

Question 3

A ________ cost changes in total in proportion to changes in the volume of activity.

Accepted Answer

variable

Question 4

Define fraud and give at least two examples of employee fraud.

Accepted Answer

Fraud involves the use of one's job for

Question 5

Policies and procedures used by management to monitor and control business activities are known as ________.

Accepted Answer

The answer of Policies and procedures used by management to...

Question 6

The main difference between the cost of goods sold of a manufacturer and a merchandiser is that the merchandiser includes cost of goods manufactured rather than cost of goods purchased.

Accepted Answer

A) True 
 B)False

Question 7

Using the information below for Singing Dolls, Inc., determine the total manufacturing costs incurred during the year: $$\begin{array} { l | r } 
\text { Work in Process, January 1 } & 50,000 \
\hline \text { Work in Process, December 31 } & 37,000 \
\hline \text { Direct materials used } & \$ 12,500 \
\hline \text { Total Factory overhead } & 5,500 \
\hline \text { Direct labor used } & 26,500
\end{array}$$

Accepted Answer

A)  $13,000. 
B)  $44,500. 
C)  $89,000. 
D)  $57,500. 
E)  $94,500. 
A)  $13,000. 
B)  $44,500. 
C)  $89,000. 
D)  $57,500. 
E)  $94,500.

Question 8

Mustang Corporation has accumulated the following accounting data for the month of April: $\begin{array}{ll}
\text { Finished goods inventory, January 1 } & \$ 3,200 \
\text { Finished goods inventory, December } 31 & 4,000 \
\text { Total cost of goods sold } & 14,200
\end{array}$ 
The cost of goods sold for the year is:

Accepted Answer

A)  $59,700. 
B)  $169,300. 
C)  $144,700. 
D)  $108,900. 
E)  $120,100. 
A)  $59,700. 
B)  $169,300. 
C)  $144,700. 
D)  $108,900. 
E)  $120,100.

Question 9

Indirect labor refers to the cost of the workers whose efforts are directly related to specific units of product.

Accepted Answer

A) True 
 B)False

Question 10

Using the information below, calculate cost of goods sold for the period: $\begin{array}{lr}
\text { Sales revenues for the period }&\$1,304,000\
\
\text { Operating expenses for the period } & 239,000 \
\text { Finished Goods Inventory, January } 1 & 36,000 \
\text { Finished Goods Inventory, December } 31 & 41,000 \
\text { Cost of goods manufactured for the period } & 540,000
\end{array}$

Accepted Answer

A)  $448,000. 
B)  $774,000. 
C)  $535,000. 
D)  $769,000. 
E)  $530,000. 
A)  $448,000. 
B)  $774,000. 
C)  $535,000. 
D)  $769,000. 
E)  $530,000.

Question 11

Four factors come together in production activity: beginning work in process inventory, raw materials, direct labor, and factory overhead.

Accepted Answer

A) True 
 B)False

Question 12

Information for Maxim Manufacturing is presented below. Compute both the cost of goods manufactured and the cost of goods sold for Maxim Manufacturing.
 $$\begin{array} { l | l } 
\text { Beginning raw materials inventory } & \$ 36,800 \
\hline \text { Beginning work in process inventory } & 21,200 \
\hline \text { Direct labor } & 81,000 \
\hline \text { Beginning finished goods inventory } & 64,000 \
\hline \text { Total factory overhead } & 126,000 \
\hline \text { Raw materials purchased } & 21,500 \
\hline \text { Ending raw materials inventory } & 40,000 \
\hline \text { Ending work in process inventory } & 20,000 \
\hline \text { Ending finished goods inventory } & 46,000
\end{array}$$

Accepted Answer

The answer of Information for Maxim Manufacturing is presented below....

Question 13

Direct labor refers to the cost of the workers whose efforts are directly related to specific units of product.

Accepted Answer

A) True 
 B)False

Question 14

Costs are important to managers because they impact both the financial position and profitability of a business.

Accepted Answer

A) True 
 B)False

Question 15

Current information for the Healey Company follows: $$\begin{array} { l | r } 
\text { Beginning raw materials inventory } & \$ 15,200 \
\hline \text { Raw material purchases } & 60,000 \
\hline \text { Ending raw materials inventory } & 16,600 \
\hline \text { Beginning work in process inventory } & 22,400 \
\hline \text { Ending work in process inventory } & 28,000 \
\hline \text { Direct labor } & 42,800 \
\hline \text { Total factory overhead } & 30,000
\end{array}$$ All raw materials used were traceable to specific units of product.
-
All raw materials used were traceable to specific units of product. Healey Company's Cost of Goods Manufactured for the year is:

Accepted Answer

A)  $125,800. 
B)  $128,600. 
C)  $137,000. 
D)  $139,000. 
E)  $131,400. 
A)  $125,800. 
B)  $128,600. 
C)  $137,000. 
D)  $139,000. 
E)  $131,400.

Question 16

The sales commission incurred based on units of product sold during the month is an example of a product cost.

Accepted Answer

A) True 
 B)False

Question 17

Compute the ending work in process inventory for a manufacturer with the following information.
 $$\begin{array} { l | l } 
\text { Raw materials purchased } & 131,700 \
\hline \text { Raw materials used in production } & 65,400 \
\hline \text { Direct labor used } & 44,000 \
\hline \text { Total factory overhead used } & 101,600 \
\hline \text { Work in process inventory, beginning of year } & 32,500 \
\hline \text { Cost of goods manufactured } & 212,900
\end{array}$$

Accepted Answer

\[\begin{array} { l | l } 
\text { Work

Question 18

Crane, Inc. reported the following data regarding costs and inventories for the current year: beginning goods-in-process inventory, $4,000; beginning finished goods inventory, $2,000; cost of goods manufactured, $11,500; operating expenses, $3,000; ending finished goods inventory,$1,000; ending goods-in-process inventory, $1,500. Cost of goods sold for Crane, Inc. equals________.

Accepted Answer

The answer of Crane, Inc. reported the following data regarding...

Question 19

Indirect materials are accounted for as factory overhead because they are not clearly identified with specific product units.

Accepted Answer

A) True 
 B)False

Question 20

A management concept that seeks to uncover and eliminate waste in all aspects of business activities is called:

Accepted Answer

A)  Just-in-time. 
B)  Theory of constraints. 
C)  Continuous operations. 
D)  Lean business model. 
E)  Customer orientation. 
A)  Just-in-time. 
B)  Theory of constraints. 
C)  Continuous operations. 
D)  Lean business model. 
E)  Customer orientation.

Exam 18: Managerial Accounting Concepts and Principles

Straight-line depreciation, rent, and manager salaries are examples of variable costs.

A ________ cost changes in total in proportion to changes in the volume of activity.

Define fraud and give at least two examples of employee fraud.

Policies and procedures used by management to monitor and control business activities are known as ________.

The main difference between the cost of goods sold of a manufacturer and a merchandiser is that the merchandiser includes cost of goods manufactured rather than cost of goods purchased.

Using the information below for Singing Dolls, Inc., determine the total manufacturing costs incurred during the year: Work in Process, January 1 50,000 Work in Process, December 31 37,000 Direct materials used \ 12,500 Total Factory overhead 5,500 Direct labor used 26,500

Mustang Corporation has accumulated the following accounting data for the month of April: Finished goods inventory, January 1 \ 3,200 Finished goods inventory, December 31 4,000 Total cost of goods sold 14,200 The cost of goods sold for the year is:

Indirect labor refers to the cost of the workers whose efforts are directly related to specific units of product.

Using the information below, calculate cost of goods sold for the period: Sales revenues for the period \1 ,304,000 Operating expenses for the period 239,000 Finished Goods Inventory, January 1 36,000 Finished Goods Inventory, December 31 41,000 Cost of goods manufactured for the period 540,000

Four factors come together in production activity: beginning work in process inventory, raw materials, direct labor, and factory overhead.

Direct labor refers to the cost of the workers whose efforts are directly related to specific units of product.

Costs are important to managers because they impact both the financial position and profitability of a business.

The sales commission incurred based on units of product sold during the month is an example of a product cost.

Indirect materials are accounted for as factory overhead because they are not clearly identified with specific product units.

A management concept that seeks to uncover and eliminate waste in all aspects of business activities is called:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Present and Future Values in Accounting

Activity-Based Costing

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