Question 1

Total variable costs change in proportion to changes in the volume of activity.

Accepted Answer

A) True 
 B)False

Question 2

________ rejects the notions of "good enough" or "acceptable" and challenges employees and managers to continuously experiment with new and improved business practices.

Accepted Answer

Continuous

Question 3

Which of the following statements is correct concerning the Days' sales in raw materials inventory?

Accepted Answer

A)  Most companies generally prefer a higher number of days' sales in raw materials inventory. 
B)  A measure of how long it takes raw materials to be used in production. 
C)  Reveals how many times a company turns over its raw materials inventory in a period. 
D)  The ratio is not useful for a manufacturer. 
E)  Is calculated by taking the Raw materials used/Average raw materials inventory. 
A)  Most companies generally prefer a higher number of days' sales in raw materials inventory. 
B)  A measure of how long it takes raw materials to be used in production. 
C)  Reveals how many times a company turns over its raw materials inventory in a period. 
D)  The ratio is not useful for a manufacturer. 
E)  Is calculated by taking the Raw materials used/Average raw materials inventory.

Question 4

Which of the following items is not a management concept that was created to improve companies' performances?

Accepted Answer

A)  Customer orientation. 
B)  Total quality management. 
C)  Continuous improvement. 
D)  GAAP constraints and guidelines. 
E)  Just-in-time manufacturing. 
A)  Customer orientation. 
B)  Total quality management. 
C)  Continuous improvement. 
D)  GAAP constraints and guidelines. 
E)  Just-in-time manufacturing.

Question 5

Using the information below, calculate gross profit for the period: $\begin{array}{lc}
\text { Beginning Raw Materials Inventory } & \$ 25,000 \
\text { Ending Raw Materials Inventory } & 30,000 \
\text { Beginning Work in Process Inventory } & 55,000 \
\text { Ending Work in Process Inventory } & 64,000 \
\text { Beginning Finished Goods Inventory } & 80,000 \
\text { Ending Finished Goods Inventory } & 67,000 \
\text { Cost of Goods Sold for the period } & 540,000 \
\text { Sales revenues for the period } & 1,254,000\
\
\text { Operating expenses for the period}&232,000
\end{array}$

Accepted Answer

A)  $1,022,000. 
B)  $727,000. 
C)  $714,000. 
D)  $482,000. 
E)  $187,000. 
A)  $1,022,000. 
B)  $727,000. 
C)  $714,000. 
D)  $482,000. 
E)  $187,000.

Question 6

________ reveals how many times a company uses its raw materials inventory in production during a period.

Accepted Answer

Raw Materi

Question 7

Direct materials are not easily traced to a product.

Accepted Answer

A) True 
 B)False

Question 8

Adopting a lean business model should have no effect on cost in a modern manufacturing environment.

Accepted Answer

A) True 
 B)False

Question 9

Period costs are incurred by purchasing merchandise or manufacturing finished goods.

Accepted Answer

A) True 
 B)False

Question 10

Direct costs are incurred for the benefit of more than one cost object.

Accepted Answer

A) True 
 B)False

Question 11

Calculate Cost of Goods Sold for the following two companies:
 $$\begin{array} { l | l | l } 
& \text { LEWIS, INC. } & \text { MERCER CO } \
\hline \text { Beginning Inventory. } & & \
\hline \text { Merchandise } & \$ 250,000 & \
\hline \text { Finithed Goods } & &  \$ 550,000\
\hline \text { Cost of Goods Purchased } & 460,000 & \
\hline \text { Cost of Goods Manufactured } & & 688,000\
\hline \text { Ending Inventory. } & &  \
\hline \text { Merchandise } & 128,000 & \ 
\hline \text { Finithed Goods } & &350,000\
\hline
\end{array}$$

Accepted Answer

LEWIS, INC.:
 \[\begin{array}{l}
\begin{

Question 12

The Richards Company manufactures a single product. All raw materials used are traceable to specific units of product. Current information for the Richards Company follows: $$\begin{array} { l r } 
\text { Beginging raw materials inventory } & \$ 10,000 \
\text { Ending raw materials inventory } & 12,000 \
\text { Raw material purchases } & 90,000 \
\text { Beginging work in process inventory } & 40,000 \
\text { Ending work in process inventory } & 25,000
\end{array}$$    $$\begin{array} { l r } 
\text { Direct labor } & 130,000 \
\text { Total factory overhead } & 60,000 \
\text { Begining finithed goods inventory } & 55,000 \
\text { Ending finished goods inventory } & 45,000
\end{array}$$ 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 = $88,000  
Cost of Goods Manufactured = $293,000
 Cost of Goods Sold = $303,000 
B)  Cost of Materials Used = $92,000 
Cost of Goods Manufactured = $263,000
 Cost of Goods Sold = $293,000 
C)  Cost of Materials Used = $92,000 
Cost of Goods Manufactured = $293,000 
Cost of Goods Sold = $303,000 
D)  Cost of Materials Used = $88,000
 Cost of Goods Manufactured = $263,000 
Cost of Goods Sold = $283,000 
E)  Cost of Materials Used = $90,000 
Cost of Goods Manufactured = $293,000
 Cost of Goods Sold = $283,000 
A)  Cost of Materials Used = $88,000  
Cost of Goods Manufactured = $293,000
 Cost of Goods Sold = $303,000 
B)  Cost of Materials Used = $92,000 
Cost of Goods Manufactured = $263,000
 Cost of Goods Sold = $293,000 
C)  Cost of Materials Used = $92,000 
Cost of Goods Manufactured = $293,000 
Cost of Goods Sold = $303,000 
D)  Cost of Materials Used = $88,000
 Cost of Goods Manufactured = $263,000 
Cost of Goods Sold = $283,000 
E)  Cost of Materials Used = $90,000 
Cost of Goods Manufactured = $293,000
 Cost of Goods Sold = $283,000

Question 13

A manufacturing firm's cost of goods manufactured is equivalent to a merchandising firm's:

Accepted Answer

A)  Cost of goods sold. 
B)  Beginning merchandise inventory. 
C)  Cost of goods purchased. 
D)  Ending merchandise inventory. 
E)  Cost of goods available. 
A)  Cost of goods sold. 
B)  Beginning merchandise inventory. 
C)  Cost of goods purchased. 
D)  Ending merchandise inventory. 
E)  Cost of goods available.

Question 14

One of the main differences between the calculation of cost of goods sold for a merchandiser and that of a manufacturer is that the calculation includes cost of goods purchased for the merchandiser, but the manufacturer replaces that with ________.

Accepted Answer

cost of go

Question 15

Expenditures that flow directly to the current income statement and are not reported as assets are________ costs.

Accepted Answer

The answer of Expenditures that flow directly to the current...

Question 16

Current information for the Stellar Corporation follows: 
$$\begin{array} { l | r } 
\text { Beginning work in process inventory } & \$ 17,900 \
\hline \text { Ending work in process inventory } & 19,300 \
\hline \text { Direct materials } & 147,000 \
\hline \text { Direct labor } & 85,000
\end{array}$$ $$\begin{array} { l | r } 
\text { Beginning work in process inventory } & \$ 17,900 \
\hline \text { Ending work in procests inventory } & 19,300 \
\hline \text { Direct materials } & 147,000 \
\hline \text { Direct labor } & \mathbf { 8 5 , 0 0 0 } \
\hline
\end{array}$$   
Stellar Corporation's Cost of Goods Manufactured for the year is:

Accepted Answer

A)  $293,700. 
B)  $313,000. 
C)  $295,100. 
D)  $275,800. 
E)  $296,500. 
A)  $293,700. 
B)  $313,000. 
C)  $295,100. 
D)  $275,800. 
E)  $296,500.

Question 17

Product costs:

Accepted Answer

A)  Are moved to the income statement for any unsold inventory at the end of the year. 
B)  Include selling and administrative expenses. 
C)  Are expenditures identified more with a time period rather than with units of product. 
D)  Are expensed on the income statement when incurred. 
E)  Are expenditures necessary and integral to finished products. 
A)  Are moved to the income statement for any unsold inventory at the end of the year. 
B)  Include selling and administrative expenses. 
C)  Are expenditures identified more with a time period rather than with units of product. 
D)  Are expensed on the income statement when incurred. 
E)  Are expenditures necessary and integral to finished products.

Question 18

Classifying costs by behavior with changes in volume of activity involves:

Accepted Answer

A)  Identifying fixed cost and variable cost. 
B)  Identifying both quantitative and qualitative cost factors. 
C)  Identifying cost of goods sold and operating costs. 
D)  Identifying costs in a physical manner. 
E)  Identifying costs as financial or managerial. 
A)  Identifying fixed cost and variable cost. 
B)  Identifying both quantitative and qualitative cost factors. 
C)  Identifying cost of goods sold and operating costs. 
D)  Identifying costs in a physical manner. 
E)  Identifying costs as financial or managerial.

Question 19

The raw materials inventory turnover is raw materials purchased divided by the average raw materials inventory.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not part of the production activity in the flow of manufacturing activities?

Accepted Answer

A)  Beginning Work in Process Inventory. 
B)  Total finished goods available for sale. 
C)  Cost of goods manufactured. 
D)  Factory overhead. 
E)  Direct labor. 
A)  Beginning Work in Process Inventory. 
B)  Total finished goods available for sale. 
C)  Cost of goods manufactured. 
D)  Factory overhead. 
E)  Direct labor.

Exam 18: Managerial Accounting Concepts and Principles

Total variable costs change in proportion to changes in the volume of activity.

________ rejects the notions of "good enough" or "acceptable" and challenges employees and managers to continuously experiment with new and improved business practices.

Which of the following statements is correct concerning the Days' sales in raw materials inventory?

Which of the following items is not a management concept that was created to improve companies' performances?

________ reveals how many times a company uses its raw materials inventory in production during a period.

Direct materials are not easily traced to a product.

Adopting a lean business model should have no effect on cost in a modern manufacturing environment.

Period costs are incurred by purchasing merchandise or manufacturing finished goods.

Direct costs are incurred for the benefit of more than one cost object.

Calculate Cost of Goods Sold for the following two companies: LEWIS, INC. MERCER CO Beginning Inventory. Merchandise \ 250,000 Finithed Goods \ 550,000 Cost of Goods Purchased 460,000 Cost of Goods Manufactured 688,000 Ending Inventory. Merchandise 128,000 Finithed Goods 350,000

A manufacturing firm's cost of goods manufactured is equivalent to a merchandising firm's:

One of the main differences between the calculation of cost of goods sold for a merchandiser and that of a manufacturer is that the calculation includes cost of goods purchased for the merchandiser, but the manufacturer replaces that with ________.

Expenditures that flow directly to the current income statement and are not reported as assets are________ costs.

Product costs:

Classifying costs by behavior with changes in volume of activity involves:

The raw materials inventory turnover is raw materials purchased divided by the average raw materials inventory.

Which of the following is not part of the production activity in the flow of manufacturing activities?

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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