Question 1

Managerial accounting reporting by a public firm is required to follow the rules of GAAP.

Accepted Answer

A) True 
 B)False

Question 2

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 (SCM) 
B)  Just-in-Time (JIT) Management 
C)  Enterprise Resource Planning (ERP) 
D)  Total Quality Management (TQM) 
A)  Supply Chain Management (SCM) 
B)  Just-in-Time (JIT) Management 
C)  Enterprise Resource Planning (ERP) 
D)  Total Quality Management (TQM)

Question 3

Which of the following will be classified as a conversion cost?

Accepted Answer

A)  cost of direct materials used 
B)  depreciation on factory equipment 
C)  salary of sales personnel 
D)  depreciation on office furniture 
A)  cost of direct materials used 
B)  depreciation on factory equipment 
C)  salary of sales personnel 
D)  depreciation on office furniture

Question 4

Oaktree, Inc. is a merchandiser of inlaid wooden boxes. The company sold 7000 units during the year. The company has provided the following information: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 550,000 \
\hline \text { Purchases (excluding freight in) } & 304,000 \
\hline \text { Selling and Administrative Expenses } & 69,000 \
\hline \text { Freight In } & 15,000 \
\hline \text { Beginning Merchandise Inventory } & 43,000 \
\hline \text { Ending Merchandise Inventory } & 42,000 \
\hline
\end{array}$$ What is the cost of goods sold for the year?

Accepted Answer

A)  $362,000 
B)  $320,000 
C)  $318,000 
D)  $305,000 
A)  $362,000 
B)  $320,000 
C)  $318,000 
D)  $305,000

Question 5

Miguel, a manager for Sierra Company, is inspecting the reports provided by his company's accounting department. He wants to decide how to schedule his department's employees in production next week. Miguel is examining ________.

Accepted Answer

A)  managerial accounting information 
B)  financial accounting information 
C)  regulatory accounting information 
D)  organizational accounting information 
A)  managerial accounting information 
B)  financial accounting information 
C)  regulatory accounting information 
D)  organizational accounting information

Question 6

Which of the following correctly describes Just-in-Time (JIT) Management?

Accepted Answer

A)  It is a production approach that maintains surplus goods at each stage of manufacture. 
B)  It helps managers cut costs by speeding the transformation of raw materials into finished products.. 
C)  It is a cost management approach that focuses on maintaining large finished goods inventory levels. 
D)  It is an inventory approach that stockpiles raw materials to protect against supply interruptions. 
A)  It is a production approach that maintains surplus goods at each stage of manufacture. 
B)  It helps managers cut costs by speeding the transformation of raw materials into finished products.. 
C)  It is a cost management approach that focuses on maintaining large finished goods inventory levels. 
D)  It is an inventory approach that stockpiles raw materials to protect against supply interruptions.

Question 7

Strategic planning focuses on short term actions while operational planning involves developing long-term strategies.

Accepted Answer

A) True 
 B)False

Question 8

At the beginning of the year, Swift, Inc.'s Work-in-Process Inventory account had a balance of $124,000. During the year, $250,000 of direct materials were used in production, and $72,000 of direct labor costs were incurred. Manufacturing overhead amounted to $832,000. The cost of goods manufactured was $676,000. What is the balance in the Work-in-Process Inventory account on December 31?

Accepted Answer

A)  $1,154,000 
B)  $1,352,000 
C)  $676,000 
D)  $602,000 
A)  $1,154,000 
B)  $1,352,000 
C)  $676,000 
D)  $602,000

Question 9

Ryker Manufacturing, Inc. provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Purchases - Direct Materials } & \$ 91,000 \
\hline \text { Plant Utilities and Insurance } & 66,000 \
\hline \text { Indirect Materials Used } & 11,240 \
\hline \text { Indirect Labor } & 4830 \
\hline \text { Direct Materials Used in Production } & 98,000 \
\hline \text { Direct Labor } & 118,500 \
\hline \text { Depreciation on Factory Plant and Equipment } & 8000 \
\hline \text { Cost of Goods Manufactured } & 292,000 \
\hline \text { Cost of Goods Sold } & 290,000 \
\hline
\end{array}$$ The inventory account balances as of January 1 are given below.
$$\begin{array} { | l | r | } 
\hline \text { Direct Materials } & \$ 45,000 \
\hline \text { Work-in-Progress Inventory } & 11,000 \
\hline \text { Finished Goods Inventory } & 304,570 \
\hline
\end{array}$$ What is the ending balance in the Finished Goods Inventory?

Accepted Answer

A)  $304,570 
B)  $302,570 
C)  $306,570 
D)  $596,570 
A)  $304,570 
B)  $302,570 
C)  $306,570 
D)  $596,570

Question 10

Which of the following would appear as a line item on the income statements of both a merchandiser and a manufacturer?

Accepted Answer

A)  Direct Labor 
B)  Cost of Goods Manufactured 
C)  Direct Materials 
D)  Cost of Goods Sold 
A)  Direct Labor 
B)  Cost of Goods Manufactured 
C)  Direct Materials 
D)  Cost of Goods Sold

Question 11

The United States Bureau of Labor Statistics predicts that the manufacturing sector will account for the majority of projected job growth from 2014-2024.

Accepted Answer

A) True 
 B)False

Question 12

Manufacturing costs flow from Work-in-Process Inventory to Cost of Goods Sold to Finished Goods Inventory.

Accepted Answer

A) True 
 B)False

Question 13

Evaluating a company's performance by its economic, social and environmental impact is called the ________.

Accepted Answer

A)  triple bottom line 
B)  whole company concept 
C)  value chain 
D)  downstream cost 
A)  triple bottom line 
B)  whole company concept 
C)  value chain 
D)  downstream cost

Question 14

Unit product costs can be used to measure operating income and determine the cost of Finished Goods Inventory.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a period cost for a manufacturing company?

Accepted Answer

A)  office rent 
B)  wages of factory janitor 
C)  insurance cost of production equipment 
D)  raw materials 
A)  office rent 
B)  wages of factory janitor 
C)  insurance cost of production equipment 
D)  raw materials

Question 16

A merchandiser does not need to calculate cost per unit because it resells goods that are already manufactured.

Accepted Answer

A) True 
 B)False

Question 17

Given the following information, determine the cost of goods sold. $$\begin{array} { | l | r | } 
\hline \text { Direct Labor Incurred } & \$ 61,000 \
\hline \text { Manufacturing Overhead Incurred } & 176,500 \
\hline \text { Direct Materials Used } & 154,000 \
\hline \text { Finished Goods Inventory, Jan. 1 } & 198,000 \
\hline \text { Finished Goods Inventory, Dec. 31 } & 98,500 \
\hline \text { Work-in-Process Inventory, Jan. 1 } & 222,000 \
\hline \text { Work-in-Process Inventory, Dec. 31 } & 109,000 \
\hline
\end{array}$$

Accepted Answer

A)  $504,500 
B)  $613,500 
C)  $604,000 
D)  $296,500 
A)  $504,500 
B)  $613,500 
C)  $604,000 
D)  $296,500

Question 18

The IMA Statement of Ethical Professional Practice includes confidentiality, competence, credibility, and integrity.

Accepted Answer

A) True 
 B)False

Question 19

Product costs, such as manufacturing overhead, should be treated as an asset in an inventory account until the product is sold.

Accepted Answer

A) True 
 B)False

Question 20

Given the following information, determine the cost of goods manufactured. $$\begin{array} { | l | r | } 
\hline \text { Direct Labor Incurred } & \$ 62,000 \
\hline \text { Manufacturing Overhead Incurred } & 177,000 \
\hline \text { Direct Materials Used } & 151,000 \
\hline \text { Finished Goods Inventory, Jan. 1 } & 197,000 \
\hline \text { Finished Goods Inventory, Dec. 31 } & 99,000 \
\hline \text { Work-in-Process Inventory, Jan. 1 } & 221,000 \
\hline \text { Work-in-Process Inventory, Dec. 31 } & 108,000 \
\hline
\end{array}$$

Accepted Answer

A)  $390,000 
B)  $503,000 
C)  $282,000 
D)  $188,000 
A)  $390,000 
B)  $503,000 
C)  $282,000 
D)  $188,000

Exam 16: Introduction to Managerial Accounting

Managerial accounting reporting by a public firm is required to follow the rules of GAAP.

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?

Which of the following will be classified as a conversion cost?

Miguel, a manager for Sierra Company, is inspecting the reports provided by his company's accounting department. He wants to decide how to schedule his department's employees in production next week. Miguel is examining ________.

Which of the following correctly describes Just-in-Time (JIT) Management?

Strategic planning focuses on short term actions while operational planning involves developing long-term strategies.

Which of the following would appear as a line item on the income statements of both a merchandiser and a manufacturer?

The United States Bureau of Labor Statistics predicts that the manufacturing sector will account for the majority of projected job growth from 2014-2024.

Manufacturing costs flow from Work-in-Process Inventory to Cost of Goods Sold to Finished Goods Inventory.

Evaluating a company's performance by its economic, social and environmental impact is called the ________.

Unit product costs can be used to measure operating income and determine the cost of Finished Goods Inventory.

Which of the following is a period cost for a manufacturing company?

A merchandiser does not need to calculate cost per unit because it resells goods that are already manufactured.

The IMA Statement of Ethical Professional Practice includes confidentiality, competence, credibility, and integrity.

Product costs, such as manufacturing overhead, should be treated as an asset in an inventory account until the product is sold.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Investments

Current Liabilities and Payroll

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Job Order Costing

Process Costing

Cost Management Systems: Activity-Based Just-In-Time

Cost Volume Profit Analysis

Variable Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Responsibility Accounting and Performance Evaluation

Short-Term Business Decisions

Capital Investment Decisions

Understanding Accounting Information Systems and their Components

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