Question 1

Manufacturing overhead is also referred to as ________.

Accepted Answer

A) indirect manufacturing costs 
B) direct manufacturing costs 
C) prime costs 
D) period costs 
A) indirect manufacturing costs 
B) direct manufacturing costs 
C) prime costs 
D) period costs A

Question 2

Freight costs paid to ship raw materials to a company warehouse are considered product costs.

Accepted Answer

A) True 
 B)False  True

Question 3

For a manufacturing company,which of the following is a period cost?

Accepted Answer

A) direct materials used 
B) office rent 
C) wages expense of factory workers 
D) indirect materials used 
A) direct materials used 
B) office rent 
C) wages expense of factory workers 
D) indirect materials used B

Question 4

How does a service company calculate unit cost per service? Why do managers need to know the unit cost per service?

Accepted Answer

Unit cost per service is calcu

Question 5

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 6

The following information has been provided by Squash Corporation: $$\begin{array} { | l | r | } 
\hline \text { Direct Labor } & \$ 6,000 \
\hline \text { Direct Materials Used } & 3,000 \
\hline \text { Raw Materials Purchased } & 9,000 \
\hline \text { Cost of Goods Manufactured } & 13,000 \
\hline \text { Ending Work-in-Process Inventory } & 1,400 \
\hline \text { Corporate Headquarters' Property taxes } & 900 \
\hline \text { Manufacturing Overhead Incurred } & 400 \
\hline
\end{array}$$ The beginning balance of Work-in-Process Inventory account was ________.

Accepted Answer

A) $4,500 
B) $5,000 
C) $21,000 
D) $9,400 
A) $4,500 
B) $5,000 
C) $21,000 
D) $9,400

Question 7

An Enterprise Resource Planning system (ERP)________.

Accepted Answer

A) is a cost management system in which a company produces products just in time to satisfy needs 
B) requires the implementation of Total Quality Management 
C) integrates all worldwide functions,departments,and data of a company into a single system 
D) cannot be implemented in service companies 
A) is a cost management system in which a company produces products just in time to satisfy needs 
B) requires the implementation of Total Quality Management 
C) integrates all worldwide functions,departments,and data of a company into a single system 
D) cannot be implemented in service companies

Question 8

Describe the flow of product costs for a manufacturer.

Accepted Answer

The flow of product costs for a manufact

Question 9

The following information relates to Carried Away Hot Air Balloons,Inc.: $$\begin{array} { | l | r | } 
\hline \text { Advertising Costs } & \$ 10,400 \
\hline \text { Sales Salary } & 13,800 \
\hline \text { Sales Revenue } & 630,000 \
\hline \text { President's Salary } & 52,000 \
\hline \text { Office Rent } & 67,000 \
\hline \text { Manufacturing Equipment Depreciation } & 3,000 \
\hline \text { Indirect Materials Used } & 6,600 \
\hline \text { Indirect Labor } & 13,300 \
\hline \text { Factory Repair and Maintenance } & 820 \
\hline \text { Direct Materials Used } & 31,070 \
\hline \text { Direct Labor } & 31,900 \
\hline \text { Delivery Vehicle Depreciation } & 810 \
\hline \text { Administrative Salaries } & 24,700 \
\hline
\end{array}$$ How much was Carried Away's manufacturing overhead?

Accepted Answer

A) $19,900 
B) $20,720 
C) $23,720 
D) $62,970 
A) $19,900 
B) $20,720 
C) $23,720 
D) $62,970

Question 10

Knowing the unit cost per item helps managers set appropriate selling prices.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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 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 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 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 that stockpiles raw materials to protect against supply interruptions.

Question 13

Jasper,Inc.reports the following cost information for March: $$\begin{array} { | l | r | } 
\hline \text { Cost of Goods Manufactured } & \$ 74,100 \
\hline \text { Manufacturing Overhead } & 18,500 \
\hline \text { Finished Goods Inventory, March 1 } & 4,000 \
\hline \text { Finished Goods Inventory, March 31 } & 2,700 \
\hline \text { Work-in-Process Inventory, March 1 } & 9,800 \
\hline \text { Work-in-Process Inventory, March 31 } & 1,400 \
\hline \text { Direct Materials Used } & 25,200 \
\hline
\end{array}$$ What is the cost of goods sold for March?

Accepted Answer

A) $3,100 
B) $72,800 
C) $75,400 
D) $78,100 
A) $3,100 
B) $72,800 
C) $75,400 
D) $78,100

Question 14

Nurix,Inc.is a business consulting firm.During the month of February,Nurix earned $56,400 of revenues by providing services to 48 clients.Operating expenses for February were $10,500 and non-operating expenses were $6,000. What is the unit cost per service? (Round your answer to the nearest cent. )

Accepted Answer

A) $125.00 
B) $218.75 
C) $1,175.00 
D) $10,625.00 
A) $125.00 
B) $218.75 
C) $1,175.00 
D) $10,625.00

Question 15

Manufacturing companies have inventory accounts,but merchandising companies do not.

Accepted Answer

A) True 
 B)False

Question 16

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 300 customers:
$$\begin{array} { | l | r | } 
\hline \text { Manager's Salary } & \$ 5,500 \
\hline \text { Gym Rent } & 1,800 \
\hline \text { Depreciation Expense-Equipment } & 7,000 \
\hline \text { Office Supplies Expense } & 2,300 \
\hline \text { Utilities Expense } & 1,600 \
\hline \text { Trainer's Salary } & 22,500 \
\hline
\end{array}$$ How much is the unit cost per customer? (Round your answer to the nearest cent. )

Accepted Answer

A) $93.33 
B) $19.00 
C) $1,833.33 
D) $135.67 
A) $93.33 
B) $19.00 
C) $1,833.33 
D) $135.67

Question 17

Seria,Inc.has received a bulk order from an overseas client.As a result,the reported earnings of this year are expected to be significantly higher than the estimates of financial analysts.Joshua,an accountant at Seria,tells this to one of his friends.Which of the IMA standards has Joshua violated?

Accepted Answer

A) objectivity 
B) competence 
C) confidentiality 
D) technicality 
A) objectivity 
B) competence 
C) confidentiality 
D) technicality

Question 18

Which of the following correctly describes the accounting for advertising costs?

Accepted Answer

A) Advertising costs are product costs and are expensed as incurred. 
B) Advertising costs are period costs and are expensed as incurred. 
C) Advertising costs are product costs and are expensed when the manufactured product is sold. 
D) Advertising costs are period costs and are expensed when the manufactured product is sold. 
A) Advertising costs are product costs and are expensed as incurred. 
B) Advertising costs are period costs and are expensed as incurred. 
C) Advertising costs are product costs and are expensed when the manufactured product is sold. 
D) Advertising costs are period costs and are expensed when the manufactured product is sold.

Question 19

Fuchsia,Inc.provides automobile repair services in the local community.The company provides the following information for the month of March: $$\begin{array} { | l | r | } 
\hline \text { Building Rent Expense } & \$ 5,200 \
\hline \text { Depreciation Expense-Equipment } & 1,600 \
\hline \text { Supplies Expense } & 8,000 \
\hline \text { Utilities Expense } & 2,350 \
\hline
\end{array}$$ Fuchsia provided services to 1,600 clients in the month of March and generated $23,500 as revenue.
How much is the cost per service? (Round your answer to the nearest cent. )

Accepted Answer

A) $10.72 
B) $3.25 
C) $10.00 
D) $5.72 
A) $10.72 
B) $3.25 
C) $10.00 
D) $5.72

Question 20

Repair and maintenance costs for manufacturing equipment are included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Exam 16: Introduction to Managerial Accounting

Manufacturing overhead is also referred to as ________.

Freight costs paid to ship raw materials to a company warehouse are considered product costs.

For a manufacturing company,which of the following is a period cost?

How does a service company calculate unit cost per service? Why do managers need to know the unit cost per service?

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

An Enterprise Resource Planning system (ERP)________.

Describe the flow of product costs for a manufacturer.

Knowing the unit cost per item helps managers set appropriate selling prices.

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

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

Nurix,Inc.is a business consulting firm.During the month of February,Nurix earned $56,400 of revenues by providing services to 48 clients.Operating expenses for February were $10,500 and non-operating expenses were $6,000. What is the unit cost per service? (Round your answer to the nearest cent. )

Manufacturing companies have inventory accounts,but merchandising companies do not.

Seria,Inc.has received a bulk order from an overseas client.As a result,the reported earnings of this year are expected to be significantly higher than the estimates of financial analysts.Joshua,an accountant at Seria,tells this to one of his friends.Which of the IMA standards has Joshua violated?

Which of the following correctly describes the accounting for advertising costs?

Repair and maintenance costs for manufacturing equipment are included in manufacturing overhead.

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, and Quality Management Systems

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

Accounting Information Systems

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