Question 1

A National Quality Award that encourages an emphasis on quality was established by:

Accepted Answer

A)  The Malcolm Baldrige Foundation. 
B)  The United Nations. 
C)  The SEC. 
D)  The U.S. Chamber of Commerce. 
E)  The U.S. Congress. 
A)  The Malcolm Baldrige Foundation. 
B)  The United Nations. 
C)  The SEC. 
D)  The U.S. Chamber of Commerce. 
E)  The U.S. Congress.

Question 2

Costs that flow directly to the income statement as expenses are called:

Accepted Answer

A)  Period costs. 
B)  Capitalized costs. 
C)  General costs. 
D)  Balance sheet costs. 
E)  Product costs. 
A)  Period costs. 
B)  Capitalized costs. 
C)  General costs. 
D)  Balance sheet costs. 
E)  Product costs.

Question 3

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.
- Healey Company's total manufacturing costs for the year are:

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 4

Martinez Company makes leather cowboy hats. Each hat requires ½ yard of leather to produce. On December 31, 2014, the company had (a) 75 hats in Finished Goods Inventory and (b) 60 yards of leather at a cost of $12 per yard in Raw Materials Inventory. During 2015, the company purchased 850 more yards of leather at $12 per yard and manufactured 1,600 hats. Determine the unit and dollar amounts of Raw Materials Inventory in leather at December 31, 2015.

Accepted Answer

None

Question 5

A direct cost is a cost that is:

Accepted Answer

A)  Does not change with the volume of activity. 
B)  Identifiable as controllable. 
C)  Traceable to multiple cost objects. 
D)  Traceable to a single cost object. 
E)  Traceable to the company as a whole. 
A)  Does not change with the volume of activity. 
B)  Identifiable as controllable. 
C)  Traceable to multiple cost objects. 
D)  Traceable to a single cost object. 
E)  Traceable to the company as a whole.

Question 6

The main goal of the lean business model is the elimination of waste while satisfying the customer and providing a positive return to the company.

Accepted Answer

A) True 
 B)False

Question 7

Use the following data to compute total factory overhead costs for the month: $\begin{array}{l|c}
\text { Sales commissions } && \$ 10,800 \
\hline \text { Direct labor } & 39,600 \
\hline \text { Indirect materials}&&15,200 \
\hline \text { Factory manager salaries } & 7,200 & \
\hline \text { Factory supplies } & 9,000 & \
\hline \text { Indirect labor } & & 6,300 \
\hline \text { Depreciation -office equipment } & 5,000 &\
\hline\text { Direct materials} & 40,500 \
\hline \text { Corporate office salaries } & 42,500 \
\hline \text { Depreciation -factory equipment } && 7,500 \
\end{array}$

Accepted Answer

A)  $125,300. 
B)  $141,100. 
C)  $58,300. 
D)  $45,200. 
E)  $84,800. 
A)  $125,300. 
B)  $141,100. 
C)  $58,300. 
D)  $45,200. 
E)  $84,800.

Question 8

The cost of workers who assist in, or supervise, the manufacturing process, not linked to specific units of product is called:

Accepted Answer

A)  Indirect labor. 
B)  Direct labor. 
C)  Basic labor. 
D)  Unspecified labor. 
E)  Joint labor. 
A)  Indirect labor. 
B)  Direct labor. 
C)  Basic labor. 
D)  Unspecified labor. 
E)  Joint labor.

Question 9

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

Accepted Answer

A)  $75,200. 
B)  $58,600. 
C)  $76,600. 
D)  $61,400. 
E)  $60,000. 
A)  $75,200. 
B)  $58,600. 
C)  $76,600. 
D)  $61,400. 
E)  $60,000.

Question 10

A manufacturer's total cost of making and finishing products in the period is called:

Accepted Answer

A)  Cost of goods sold. 
B)  Ending work in process inventory. 
C)  Cost of goods manufactured. 
D)  Ending finished goods inventory. 
E)  Total manufacturing costs. 
A)  Cost of goods sold. 
B)  Ending work in process inventory. 
C)  Cost of goods manufactured. 
D)  Ending finished goods inventory. 
E)  Total manufacturing costs.

Question 11

Just-in-time manufacturing techniques can be useful in _____________ days' sales in raw materials inventory.

Accepted Answer

A)  changing upward 
B)  lowering 
C)  increasing 
D)  keeping constant 
E)  adding to 
A)  changing upward 
B)  lowering 
C)  increasing 
D)  keeping constant 
E)  adding to

Question 12

Costs that are capitalized as inventory when they are incurred are called:

Accepted Answer

A)  Fixed costs. 
B)  General costs. 
C)  Administrative costs. 
D)  Period costs. 
E)  Product costs. 
A)  Fixed costs. 
B)  General costs. 
C)  Administrative costs. 
D)  Period costs. 
E)  Product costs.

Question 13

Total manufacturing costs incurred during the year do not include:

Accepted Answer

A)  Direct labor. 
B)  Depreciation of factory machinery. 
C)  Direct materials used. 
D)  Work in Process inventory, beginning balance. 
E)  Factory supplies used. 
A)  Direct labor. 
B)  Depreciation of factory machinery. 
C)  Direct materials used. 
D)  Work in Process inventory, beginning balance. 
E)  Factory supplies used.

Question 14

Both financial and managerial accounting rely on accepted principles that are enforced through an extensive set of rules and guidelines.

Accepted Answer

A) True 
 B)False

Question 15

A schedule of cost of goods manufactured is also known as a:

Accepted Answer

A)  Manufacturing statement. 
B)  Cost of goods sold schedule. 
C)  Raw materials processed schedule. 
D)  Total finished goods statement. 
E)  Factory supplies used schedule. 
A)  Manufacturing statement. 
B)  Cost of goods sold schedule. 
C)  Raw materials processed schedule. 
D)  Total finished goods statement. 
E)  Factory supplies used schedule.

Question 16

The series of activities that add value to a company's products or services is called a value chain.

Accepted Answer

A) True 
 B)False

Question 17

To be certified under ISO 9000 standards, companies must use a quality control system and document that it achieves the desired quality level.

Accepted Answer

A) True 
 B)False

Question 18

Products that are in the process of being manufactured but are not yet complete are called:

Accepted Answer

A)  Cost of goods sold. 
B)  Conversion costs. 
C)  Work in process inventory. 
D)  Raw materials inventory. 
E)  Finished goods inventory. 
A)  Cost of goods sold. 
B)  Conversion costs. 
C)  Work in process inventory. 
D)  Raw materials inventory. 
E)  Finished goods inventory.

Question 19

For product costs associated with a particular product to be reported on the income statement:

Accepted Answer

A)  The product must be sold. 
B)  The company must expect to sell the product during the next twelve months. 
C)  The product must be transferred to Finished Goods Inventory. 
D)  The product may be in any of the manufacturer's inventory accounts. 
E)  The product must still be in Work in Process Inventory. 
A)  The product must be sold. 
B)  The company must expect to sell the product during the next twelve months. 
C)  The product must be transferred to Finished Goods Inventory. 
D)  The product may be in any of the manufacturer's inventory accounts. 
E)  The product must still be in Work in Process Inventory.

Question 20

Just-in-time manufacturing (JIT) is a system that acquires inventory and produces only when needed.

Accepted Answer

A) True 
 B)False

Exam 18: Managerial Accounting Concepts and Principles

A National Quality Award that encourages an emphasis on quality was established by:

Costs that flow directly to the income statement as expenses are called:

A direct cost is a cost that is:

The main goal of the lean business model is the elimination of waste while satisfying the customer and providing a positive return to the company.

The cost of workers who assist in, or supervise, the manufacturing process, not linked to specific units of product is called:

A manufacturer's total cost of making and finishing products in the period is called:

Just-in-time manufacturing techniques can be useful in _____________ days' sales in raw materials inventory.

Costs that are capitalized as inventory when they are incurred are called:

Total manufacturing costs incurred during the year do not include:

Both financial and managerial accounting rely on accepted principles that are enforced through an extensive set of rules and guidelines.

A schedule of cost of goods manufactured is also known as a:

The series of activities that add value to a company's products or services is called a value chain.

To be certified under ISO 9000 standards, companies must use a quality control system and document that it achieves the desired quality level.

Products that are in the process of being manufactured but are not yet complete are called:

For product costs associated with a particular product to be reported on the income statement:

Just-in-time manufacturing (JIT) is a system that acquires inventory and produces only when needed.

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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