Question 1

Indirect materials costs are included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is true of the flow of product and period costs for a manufacturer?

Accepted Answer

A)  When the manufacturing process is completed, the costs are transferred to the Work-in-Process Inventory account. 
B)  The cost of the finished goods that the manufacturer sells becomes its Cost of Goods Sold on the income statement. 
C)  Period costs remain in inventory accounts on the balance sheet until the product is sold. 
D)  All product costs that have been paid are expensed and shown on the income statement at the end of the accounting period. 
A)  When the manufacturing process is completed, the costs are transferred to the Work-in-Process Inventory account. 
B)  The cost of the finished goods that the manufacturer sells becomes its Cost of Goods Sold on the income statement. 
C)  Period costs remain in inventory accounts on the balance sheet until the product is sold. 
D)  All product costs that have been paid are expensed and shown on the income statement at the end of the accounting period.

Question 3

Crystal Inc. is a merchandiser of stone ornaments. The company sold 15,000 units in 2015. The company has provided the following information: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 557,000 \
\hline \text { Purchases (excluding freight in) } & 300,000 \
\hline \text { Selling and Administrative Expenses } & 69,000 \
\hline \text { Freight In } & 15,000 \
\hline \text { Beginning Merchandise Inventory } & 45,000 \
\hline \text { Ending Merchandise Inventory } & 55,700 \
\hline
\end{array}$$ What is the cost of goods available for sale for 2015?

Accepted Answer

A)  $360,000 
B)  $304,300 
C)  $345,000 
D)  $330,000 
A)  $360,000 
B)  $304,300 
C)  $345,000 
D)  $330,000

Question 4

You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company's bonds. Which of the IMA standards appears to have been violated here?

Accepted Answer

A)  Integrity 
B)  Confidentiality 
C)  Competence 
D)  Objectivity 
A)  Integrity 
B)  Confidentiality 
C)  Competence 
D)  Objectivity

Question 5

Kyanite Corporation, a manufacturer reports costs for 2015 as follows: $$\begin{array} { | l | r | } 
\hline \text { Raw Materials } & \$ 50,000 \
\hline \text { Wages to Line Workers } & 25,000 \
\hline \text { Office Rent } & 14,000 \
\hline \text { Indirect Materials } & 30,000 \
\hline
\end{array}$$
- How much is the total period costs of Kyanite?

Accepted Answer

A)  $30,000 
B)  $80,000 
C)  $39,000 
D)  $14,000 
A)  $30,000 
B)  $80,000 
C)  $39,000 
D)  $14,000

Question 6

Crystal Inc. is a merchandiser of stone ornaments. The company sold 15,000 units in 2015. The company has provided the following information: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 557,000 \
\hline \text { Purchases (excluding freight in) } & 300,000 \
\hline \text { Selling and Administrative Expenses } & 69,000 \
\hline \text { Freight In } & 15,000 \
\hline \text { Beginning Merchandise Inventory } & 45,000 \
\hline \text { Ending Merchandise Inventory } & 55,700 \
\hline
\end{array}$$ What is the cost per unit sold?

Accepted Answer

A)  $20.29 
B)  $15.00 
C)  $23.88 
D)  $12.25 
A)  $20.29 
B)  $15.00 
C)  $23.88 
D)  $12.25

Question 7

Selected data for Lemon Grass Company for 2015 is provided below: $$\begin{array} { | l | r | } 
\hline \text { Factory Utilities } & \$ 1,500 \
\hline \text { Indirect Materials Used } & 37,500 \
\hline \text { Direct Materials Used } & 300,000 \
\hline \text { Property Taxes on Factory Building } & 6,900 \
\hline \text { Sales Commissions } & 85,000 \
\hline \text { Indirect Labor Incurred } & 25,000 \
\hline \text { Direct Labor Incurred } & 150,000 \
\hline \text { Depreciation on Factory Equipment } & 6,500 \
\hline
\end{array}$$ What is the total factory overhead?

Accepted Answer

A)  $450,000 
B)  $612,000 
C)  $77,400 
D)  $62,400 
A)  $450,000 
B)  $612,000 
C)  $77,400 
D)  $62,400

Question 8

A budget is a managerial accounting tool used in the planning process.

Accepted Answer

A) True 
 B)False

Question 9

Amoeba Manufacturing Company provided the following information for the year 2015: $$\begin{array} { | l | r | } 
\hline \text { Purchases-Raw Materials } & \$ 90,000 \
\hline \text { Plant Utilities \& Insurance } & 67,500 \
\hline \text { Indirect Materials } & 11,750 \
\hline \text { Indirect Labor } & 4,750 \
\hline \text { Direct Materials Used in Production } & 96,000 \
\hline \text { Direct Labor } & 117,500 \
\hline \text { Depreciation on Factory Plant \& Equipment } & 6,000 \
\hline \text { Cost of Goods Manufactured } & 290,850 \
\hline \text { Cost of Goods Sold } & 304,550 \
\hline
\end{array}$$ The inventory account balances as of January 1st 2015 are given below.
$$\begin{array} { | l | r | } 
\hline \text { Raw Materials Inventory } & \$ 42,000 \
\hline \text { Work-in-Process Inventory } & 12,000 \
\hline \text { Finished Goods Inventory } & 49,500 \
\hline
\end{array}$$ What is the ending balance in the finished goods inventory?

Accepted Answer

A)  $49,500 
B)  $63,200 
C)  $35,800 
D)  $24,650 
A)  $49,500 
B)  $63,200 
C)  $35,800 
D)  $24,650

Question 10

Which of the following represents the combined sum of direct labor and manufacturing overhead?

Accepted Answer

A)  Conversion costs 
B)  Period costs 
C)  Prime costs 
D)  Fixed costs 
A)  Conversion costs 
B)  Period costs 
C)  Prime costs 
D)  Fixed costs

Question 11

Jasper Inc. reports the following cost information for March: $$\begin{array} { | l | r | } 
\hline \text { Cost of Goods Manufactured } & \$ 75,000 \
\hline \text { Manufacturing Overhead } & 18,250 \
\hline \text { Finished Goods Inventory, March 1 } & 4,500 \
\hline \text { Finished Goods Inventory, March 31 } & 2,650 \
\hline \text { Work-in-Process Inventory, March 1 } & 9,670 \
\hline \text { Work-in-Process Inventory, March 31 } & 1,250 \
\hline \text { Direct Materials Used } & 25,300 \
\hline
\end{array}$$ 
-What is the amount of direct labor incurred by Jasper in March?

Accepted Answer

A)  $29,600 
B)  $39,870 
C)  $126,970 
D)  $23,030 
A)  $29,600 
B)  $39,870 
C)  $126,970 
D)  $23,030

Question 12

Factory rent, taxes, and insurance are included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is true of finished goods inventory?

Accepted Answer

A)  Finished Goods Inventory is an account used by a manufacturer and includes completed goods that have not yet been sold. 
B)  Finished Goods Inventory is an account used by a merchandiser and includes completed goods that have not yet been sold. 
C)  Finished Goods Inventory is an account used by service companies in lieu of raw materials inventory. 
D)  Finished Goods Inventory is an account used by a manufacturer in lieu of raw materials inventory. 
A)  Finished Goods Inventory is an account used by a manufacturer and includes completed goods that have not yet been sold. 
B)  Finished Goods Inventory is an account used by a merchandiser and includes completed goods that have not yet been sold. 
C)  Finished Goods Inventory is an account used by service companies in lieu of raw materials inventory. 
D)  Finished Goods Inventory is an account used by a manufacturer in lieu of raw materials inventory.

Question 14

Which of the following is an objective of management accounting?

Accepted Answer

A)  to generate financial statements of a company for tax reporting 
B)  to provide information to business managers to assist them in controlling their business 
C)  to provide information to shareholders to assist them with their investment decisions 
D)  to ensure that the reports produced for internal and external business purposes are GAAP compliant 
A)  to generate financial statements of a company for tax reporting 
B)  to provide information to business managers to assist them in controlling their business 
C)  to provide information to shareholders to assist them with their investment decisions 
D)  to ensure that the reports produced for internal and external business purposes are GAAP compliant

Question 15

Star Health Inc. is a fitness center in Oklahoma City. In October, the company earned
$550,000 in revenues and incurred the following operating costs from 340 customers:
 $$\begin{array} { | l | r | } 
\hline \text { Manager's salary } & \$ 50,000 \
\hline \text { Gym Rent } & 60,000 \
\hline \text { Depreciation Expense-Equipment } & 25,000 \
\hline \text { Office Supplies } & 30,000 \
\hline \text { Utilities Expense } & 89,700 \
\hline \text { Trainer's Salary } & 25,000 \
\hline
\end{array}$$ Required: Prepare Star Health's income statement for the month of October.

Accepted Answer

Revenue
 @#IMG-DLM&

Question 16

Fireox Company's selected cost data for 2015 are shown below: $\begin{array}{|l|r|}
\hline\text { Cost of Goods Manufactured } & \$ 145,200 \
\hline \text { Work-in-Process Inventory, Jan. 1, 2015 } & 18,500 \
\hline \text { Work-in-Process Inventory, Dec. 31, 2015 } & 22,500 \
\hline \text { Direct Materials Used } & 15,800\\hline
\end{array}$ What is the total of manufacturing costs incurred by Fireox Company in 2015?

Accepted Answer

A)  $149,200 
B)  $158,300 
C)  $139,800 
D)  $117,100 
A)  $149,200 
B)  $158,300 
C)  $139,800 
D)  $117,100

Question 17

Anything for which managers want a separate measurement of cost is called:

Accepted Answer

A)  a responsibility center. 
B)  a cost object. 
C)  a profit object. 
D)  a conversion cost. 
A)  a responsibility center. 
B)  a cost object. 
C)  a profit object. 
D)  a conversion cost.

Question 18

Which of the following correctly describes just-in-time (JIT) inventory management?

Accepted Answer

A)  It is a production approach that maintains surplus goods at each stage of manufacture. 
B)  It is an inventory purchase approach that seeks purchase discounts on buying large quantities. 
C)  It is a cost management approach that focuses on maintaining lean inventory levels. 
D)  It is an inventory approach which 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 is an inventory purchase approach that seeks purchase discounts on buying large quantities. 
C)  It is a cost management approach that focuses on maintaining lean inventory levels. 
D)  It is an inventory approach which stockpiles raw materials to protect against supply interruptions.

Question 19

For a manufacturing business, which of the following would be considered a product cost?

Accepted Answer

A)  Depreciation on delivery vehicles 
B)  Depreciation on administrative building furniture and fixtures 
C)  Depreciation on manufacturing equipment 
D)  Depreciation on the accounting department's computer equipment 
A)  Depreciation on delivery vehicles 
B)  Depreciation on administrative building furniture and fixtures 
C)  Depreciation on manufacturing equipment 
D)  Depreciation on the accounting department's computer equipment

Question 20

Which of the following describes the cost of goods manufactured?

Accepted Answer

A)  the cost of the goods that were sold during the period 
B)  the total cost of all goods that were completed, or partially completed during the period 
C)  the cost of those goods which were completed during the period 
D)  total costs in inventory at the end of the period 
A)  the cost of the goods that were sold during the period 
B)  the total cost of all goods that were completed, or partially completed during the period 
C)  the cost of those goods which were completed during the period 
D)  total costs in inventory at the end of the period

Indirect materials costs are included in manufacturing overhead.

Which of the following statements is true of the flow of product and period costs for a manufacturer?

You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company's bonds. Which of the IMA standards appears to have been violated here?

Kyanite Corporation, a manufacturer reports costs for 2015 as follows: Raw Materials \ 50,000 Wages to Line Workers 25,000 Office Rent 14,000 Indirect Materials 30,000 - How much is the total period costs of Kyanite?

A budget is a managerial accounting tool used in the planning process.

Which of the following represents the combined sum of direct labor and manufacturing overhead?

Factory rent, taxes, and insurance are included in manufacturing overhead.

Which of the following is true of finished goods inventory?

Which of the following is an objective of management accounting?

Fireox Company's selected cost data for 2015 are shown below: Cost of Goods Manufactured \ 145,200 Work-in-Process Inventory, Jan. 1, 2015 18,500 Work-in-Process Inventory, Dec. 31, 2015 22,500 Direct Materials Used 15,800 What is the total of manufacturing costs incurred by Fireox Company in 2015?

Anything for which managers want a separate measurement of cost is called:

Which of the following correctly describes just-in-time (JIT) inventory management?

For a manufacturing business, which of the following would be considered a product cost?

Which of the following describes the cost of goods manufactured?

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters

Exam 1: Introduction to Managerial Accounting

Indirect materials costs are included in manufacturing overhead.

Which of the following statements is true of the flow of product and period costs for a manufacturer?

You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company's bonds. Which of the IMA standards appears to have been violated here?

Kyanite Corporation, a manufacturer reports costs for 2015 as follows: Raw Materials \ 50,000 Wages to Line Workers 25,000 Office Rent 14,000 Indirect Materials 30,000 - How much is the total period costs of Kyanite?

A budget is a managerial accounting tool used in the planning process.

Which of the following represents the combined sum of direct labor and manufacturing overhead?

Factory rent, taxes, and insurance are included in manufacturing overhead.

Which of the following is true of finished goods inventory?

Which of the following is an objective of management accounting?

Fireox Company's selected cost data for 2015 are shown below: Cost of Goods Manufactured \ 145,200 Work-in-Process Inventory, Jan. 1, 2015 18,500 Work-in-Process Inventory, Dec. 31, 2015 22,500 Direct Materials Used 15,800 What is the total of manufacturing costs incurred by Fireox Company in 2015?

Anything for which managers want a separate measurement of cost is called:

Which of the following correctly describes just-in-time (JIT) inventory management?

For a manufacturing business, which of the following would be considered a product cost?

Which of the following describes the cost of goods manufactured?

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters