Question 1

Manufacturing overhead includes indirect manufacturing costs,such as insurance and depreciation on the factory building.

Accepted Answer

A) True 
 B)False

Question 2

Samson,Inc.reported the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Service Revenue } & \$ 60,000 \
\hline \text { Operating Expenses } & 21,000 \
\hline \text { Net Income } & 39,000 \
\hline \text { Number of Services Provided for the Year } & 10,500 \
\hline
\end{array}$$ How much was the unit cost per service? (Round your answer to the nearest cent. )

Accepted Answer

A) $5.71 
B) $3.71 
C) $2.00 
D) $7.71 
A) $5.71 
B) $3.71 
C) $2.00 
D) $7.71

Question 3

Define period cost.Give three examples of period costs of a merchandising company.

Accepted Answer

Period cost is an operating cost that is

Question 4

In a manufacturing company,accounting,legal,and administrative costs are typical examples of product costs.

Accepted Answer

A) True 
 B)False

Question 5

The primary activity of manufacturing companies is to purchase goods from a wholesaler and resell them.

Accepted Answer

A) True 
 B)False

Question 6

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 7

The following information relates to Washington,Inc.: $\begin{array}{|l|r|}\hline
\text { Advertising Costs } & \$ 10,600 \
\hline \text { Sales Salary } & 10,000 \
\hline \text { Sales Revenue } & 500,000 \
\hline \text { President's Salary } & 230,000 \
\hline \text { Office Rent } & 60,500 \
\hline \text { Manufacturing Equipment Depreciation } & 1,200 \
\hline \text { Indirect Materials Used } & 13,000 \
\hline \text { Indirect Labor } & 920 \
\hline \text { Factory Repair and Maintenance } & 27,500 \
\hline \text { Direct Materials Used } & 36,000 \
\hline \text { Direct Labor } & 1,550 \
\hline \text { Delivery Vehicle Depreciation } & 22,000\\hline
\end{array}$ How much were Washington's product costs?

Accepted Answer

A) $604,650 
B) $252,000 
C) $510,600 
D) $86,620 
A) $604,650 
B) $252,000 
C) $510,600 
D) $86,620

Question 8

Financial accounting prepares reports for internal purposes,whereas managerial accounting provides information to external stakeholders.

Accepted Answer

A) True 
 B)False

Question 9

New Hope,Inc.is a merchandiser of stone ornaments.It sold 15,000 units during the year.The company has provided the following information: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 525,000 \
\hline \text { Purchases (excluding Freight In) } & 347,000 \
\hline \text { Selling and Administrative Expenses } & 36,500 \
\hline \text { Freight In } & 15,500 \
\hline \text { Beginning Merchandise Inventory } & 42,000 \
\hline \text { Ending Merchandise Inventory } & 55,500 \
\hline
\end{array}$$ How much is the gross profit for the year?

Accepted Answer

A) $212,500 
B) $349,000 
C) $176,000 
D) $178,000 
A) $212,500 
B) $349,000 
C) $176,000 
D) $178,000

Question 10

South State,Inc.used $153,000 of direct materials and incurred $63,000 of direct labor costs during the year.Indirect labor amounted to $270,000,while indirect materials used totaled $53,000.Other operating costs pertaining to the factory included utilities of $135,500; maintenance of $70,260; repairs of $53,400; depreciation of $133,000; and property taxes of $74,640.There was no beginning or ending finished goods inventory,but Work-in-Process inventory began the year with a $5,000 balance and ended the year with a $7,400 balance. How much is the cost of goods manufactured?

Accepted Answer

A) $12,400 
B) $1,003,400 
C) $1,010,800 
D) $1,005,800 
A) $12,400 
B) $1,003,400 
C) $1,010,800 
D) $1,005,800

Question 11

The following format represents the flow of costs for all three manufacturing inventory accounts:
Beginning balance + Additions - Ending balance = Amount used,manufactured,or sold

Accepted Answer

A) True 
 B)False

Question 12

Damsel,Inc.is a large manufacturer of auto tires.Damsel has provided the following information: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 75,000 \
\hline \text { Beginning Finished Goods Inventory } & 28,000 \
\hline \text { Cost of Goods Sold } & 36,500 \
\hline \text { Cost of Goods Manufactured } & 43,000 \
\hline
\end{array}$$ Calculate the amount of ending Finished Goods Inventory reported on Damsel's balance sheet.

Accepted Answer

A) $32,000 
B) $71,000 
C) $34,500 
D) $6,500 
A) $32,000 
B) $71,000 
C) $34,500 
D) $6,500

Question 13

Managerial accounting includes the planning function.Which of the following items would be part of the planning function of a business's managerial accounting?

Accepted Answer

A) comparing actual performance to previously budgeted amounts 
B) creating detailed budgets 
C) implementing operational plans 
D) evaluating results of operations 
A) comparing actual performance to previously budgeted amounts 
B) creating detailed budgets 
C) implementing operational plans 
D) evaluating results of operations

Question 14

XO,Inc.reports the following cost information for March: $$\begin{array} { | l | r | } 
\hline \text { Cost of Goods Manufactured } & \$ 71,000 \
\hline \text { Manufacturing Overhead } & 18,600 \
\hline \text { Finished Goods Inventory, March 1 } & 4,000 \
\hline \text { Finished Goods Inventory, March 31 } & 3,000 \
\hline \text { Work-in-Process Inventory, March 1 } & 9,660 \
\hline \text { Work-in-Process Inventory, March 31 } & 1,290 \
\hline \text { Direct Materials Used } & 25,530 \
\hline
\end{array}$$ What is the amount of direct labor incurred by XO in March?

Accepted Answer

A) $62,630 
B) $6,930 
C) $71,000 
D) $18,500 
A) $62,630 
B) $6,930 
C) $71,000 
D) $18,500

Question 15

A manufacturer produced 7,500 total units.The cost of goods manufactured is $88,000 and the cost of goods sold is $71,000.The unit product cost is $9.47.

Accepted Answer

A) True 
 B)False

Question 16

Regarding the flow of costs through the inventory accounts,which of the following statements is incorrect?

Accepted Answer

A) The final amount at each stage is added at the beginning of the next stage. 
B) The costs flow from Raw Materials Inventory to Work-in-Process Inventory to Finished Goods Inventory. 
C) Purchases and freight in are debited to the Work-in-Process Inventory account. 
D) The format for computing the amount used,manufactured,or sold is the same for all three inventory accounts. 
A) The final amount at each stage is added at the beginning of the next stage. 
B) The costs flow from Raw Materials Inventory to Work-in-Process Inventory to Finished Goods Inventory. 
C) Purchases and freight in are debited to the Work-in-Process Inventory account. 
D) The format for computing the amount used,manufactured,or sold is the same for all three inventory accounts.

Question 17

Crabapples,Inc.purchases and sells boxes of dried fruit.The following information summarizes its operating activities for the year: $$\begin{array} { | l | r | } 
\hline \text { Selling Expenses } & \$ 10,000 \
\hline \text { Merchandise Inventory on December 31 } & 32,000 \
\hline \text { Merchandise Inventory on January 1 } & 46,000 \
\hline \text { Purchases of merchandise } & 82,500 \
\hline \text { Rent for store } & 12,700 \
\hline \text { Sales commissions } & 7,100 \
\hline \text { Sales revenue } & 168,000 \
\hline
\end{array}$$ What is the cost per box of dry fruits if Crabapples sold 4,000 boxes of dry fruit during the year? (Round your answer to the nearest cent. )

Accepted Answer

A) $8.00 
B) $42.00 
C) $32.13 
D) $24.13 
A) $8.00 
B) $42.00 
C) $32.13 
D) $24.13

Question 18

What is Total Quality Management (TQM)?

Accepted Answer

A) a philosophy of supplying customers with superior products and services 
B) an exchange of information with suppliers and customers to create efficient and effective processes 
C) a software system that integrates a company's functions,departments,and data into a single system 
D) a system that speeds the transformation of raw materials into finished products 
A) a philosophy of supplying customers with superior products and services 
B) an exchange of information with suppliers and customers to create efficient and effective processes 
C) a software system that integrates a company's functions,departments,and data into a single system 
D) a system that speeds the transformation of raw materials into finished products

Question 19

Given the following information,determine the cost of goods sold. $$\begin{array} { | l | r | } 
\hline \text { Direct Labor Incurred } & \$ 62,000 \
\hline \text { Manufacturing Overhead Incurred } & 175,000 \
\hline \text { Direct Materials Used } & 150,000 \
\hline \text { Finished Goods Inventory, Jan. 1 } & 198,000 \
\hline \text { Finished Goods Inventory, Dec. 31 } & 98,500 \
\hline \text { Work-in-Process Inventory, Jan. 1 } & 221,000 \
\hline \text { Work-in-Process Inventory, Dec. 31 } & 108,000 \
\hline
\end{array}$$

Accepted Answer

A) $500,000 
B) $608,000 
C) $401,500 
D) $296,500 
A) $500,000 
B) $608,000 
C) $401,500 
D) $296,500

Question 20

Financial reporting is typically much more detailed than managerial accounting.

Accepted Answer

A) True 
 B)False

Manufacturing overhead includes indirect manufacturing costs,such as insurance and depreciation on the factory building.

Samson,Inc.reported the following information for the year: Service Revenue \ 60,000 Operating Expenses 21,000 Net Income 39,000 Number of Services Provided for the Year 10,500 How much was the unit cost per service? (Round your answer to the nearest cent. )

Define period cost.Give three examples of period costs of a merchandising company.

In a manufacturing company,accounting,legal,and administrative costs are typical examples of product costs.

The primary activity of manufacturing companies is to purchase goods from a wholesaler and resell them.

Financial accounting prepares reports for internal purposes,whereas managerial accounting provides information to external stakeholders.

The following format represents the flow of costs for all three manufacturing inventory accounts: Beginning balance + Additions - Ending balance = Amount used,manufactured,or sold

Managerial accounting includes the planning function.Which of the following items would be part of the planning function of a business's managerial accounting?

A manufacturer produced 7,500 total units.The cost of goods manufactured is $88,000 and the cost of goods sold is $71,000.The unit product cost is $9.47.

Regarding the flow of costs through the inventory accounts,which of the following statements is incorrect?

What is Total Quality Management (TQM)?

Financial reporting is typically much more detailed than managerial accounting.

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

Filters

Exam 16: Introduction to Managerial Accounting

Manufacturing overhead includes indirect manufacturing costs,such as insurance and depreciation on the factory building.

Samson,Inc.reported the following information for the year: Service Revenue \ 60,000 Operating Expenses 21,000 Net Income 39,000 Number of Services Provided for the Year 10,500 How much was the unit cost per service? (Round your answer to the nearest cent. )

Define period cost.Give three examples of period costs of a merchandising company.

In a manufacturing company,accounting,legal,and administrative costs are typical examples of product costs.

The primary activity of manufacturing companies is to purchase goods from a wholesaler and resell them.

Financial accounting prepares reports for internal purposes,whereas managerial accounting provides information to external stakeholders.

The following format represents the flow of costs for all three manufacturing inventory accounts: Beginning balance + Additions - Ending balance = Amount used,manufactured,or sold

Managerial accounting includes the planning function.Which of the following items would be part of the planning function of a business's managerial accounting?

A manufacturer produced 7,500 total units.The cost of goods manufactured is $88,000 and the cost of goods sold is $71,000.The unit product cost is $9.47.

Regarding the flow of costs through the inventory accounts,which of the following statements is incorrect?

What is Total Quality Management (TQM)?

Financial reporting is typically much more detailed than managerial accounting.

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

Filters