Question 1

A company that uses labor,equipment,supplies,and facilities to convert raw materials into finished products is a ________.

Accepted Answer

A) merchandising company 
B) manufacturing company 
C) service company 
D) trading company 
A) merchandising company 
B) manufacturing company 
C) service company 
D) trading company

Question 2

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

Accepted Answer

A) salary of administrative staff 
B) wages paid to factory janitor 
C) commissions paid to sales staff 
D) depreciation on corporate building 
A) salary of administrative staff 
B) wages paid to factory janitor 
C) commissions paid to sales staff 
D) depreciation on corporate building

Question 3

KRD Supplies Corporation provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Beginning Balance - Work-in-Process Inventory } & \$ 24,000 \
\hline \text { Ending Balance-Work-in-Process Inventory } & 58,000 \
\hline \text { Beginning Balance - Raw Materials Inventory } & 85,000 \
\hline \text { Ending Balance-Raw Materials Inventory } & 61,000 \
\hline \text { Purchases - Raw Materials } & 359,000 \
\hline \text { Direct Labor } & 470,000 \
\hline \text { Indirect Labor } & 21,000 \
\hline \text { Depreciation on Factory Plant and Equipment } & 24,000 \
\hline \text { Plant Utilities and Insurance } & 268,000 \
\hline
\end{array}$$ What was the amount of the manufacturing overhead costs?

Accepted Answer

A) $313,000 
B) $45,000 
C) $292,000 
D) $491,000 
A) $313,000 
B) $45,000 
C) $292,000 
D) $491,000

Question 4

Lakeside Manufacturing provided the following information for the month ended March 31: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 26,000 \
\hline \text { Beginning Finished Goods Inventory } & 8,000 \
\hline \text { Ending Finished Goods Inventory } & 13,500 \
\hline \text { Cost of Goods Manufactured } & 15,600 \
\hline
\end{array}$$ Compute cost of goods available for sale.

Accepted Answer

A) $15,600 
B) $29,100 
C) $23,600 
D) $10,100 
A) $15,600 
B) $29,100 
C) $23,600 
D) $10,100

Question 5

Reed Productions has provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Direct Labor } & \$ 150,000 \
\hline \text { Beginning Work-in-Process Inventory } & 63,000 \
\hline \text { Direct Materials Used } & 269,000 \
\hline \text { Ending Work-in-Process Inventory } & 52,900 \
\hline \text { Manufacturing Overhead } & 135,000 \
\hline
\end{array}$$ During the year,Reed produced 71,220 units of product.Calculate the unit product cost.(Round your answer to the nearest cent. )

Accepted Answer

A) $7.92 
B) $6.77 
C) $7.78 
D) $8.66 
A) $7.92 
B) $6.77 
C) $7.78 
D) $8.66

Question 6

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 7

Period costs are the ________.

Accepted Answer

A) product costs that must be paid in the accounting period in which they are incurred 
B) costs that are incurred and expensed during the same accounting period 
C) costs related to production of products the company purchases and sells 
D) same as manufacturing overhead costs 
A) product costs that must be paid in the accounting period in which they are incurred 
B) costs that are incurred and expensed during the same accounting period 
C) costs related to production of products the company purchases and sells 
D) same as manufacturing overhead costs

Question 8

Goods that are produced by a manufacturing company and are ready to sell are recorded in the _______ account.

Accepted Answer

A) Raw Materials Inventory 
B) Work-in-Process Inventory 
C) Manufacturing Overhead 
D) Finished Goods Inventory 
A) Raw Materials Inventory 
B) Work-in-Process Inventory 
C) Manufacturing Overhead 
D) Finished Goods Inventory

Question 9

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 10

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 11

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 12

Crystal,Inc.is a merchandiser of stone ornaments.The company sold 8,000 units during the year.The company has provided the following information: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 593,000 \
\hline \text { Purchases (excluding Freight In) } & 304,000 \
\hline \text { Selling and Administrative Expenses } & 68,000 \
\hline \text { Freight In } & 14,000 \
\hline \text { Beginning Merchandise Inventory } & 46,000 \
\hline \text { Ending Merchandise Inventory } & 42,000 \
\hline
\end{array}$$ What is the operating income for the year? (Round your answer to the nearest cent. )

Accepted Answer

A) $203,000 
B) $322,000 
C) $271,000 
D) $525,000 
A) $203,000 
B) $322,000 
C) $271,000 
D) $525,000

Question 13

Douban Corporation provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Beginning Balance - Work-in-Process Inventory } & \$ 27,000 \
\hline \text { Ending Balance-Work-in-Process Inventory } & 57,000 \
\hline \text { Beginning Balance - Raw Materials Inventory } & 87,000 \
\hline \text { Ending Balance-Raw Materials Inventory } & 61,000 \
\hline \text { Purchases - Raw Materials } & 358,000 \
\hline \text { Direct Labor } & 469,000 \
\hline \text { Indirect Labor } & 21,000 \
\hline \text { Depreciation on Factory Plant and Equipment } & 22,000 \
\hline \text { Plant Utilities and Insurance } & 271,000 \
\hline
\end{array}$$ What was the total manufacturing costs incurred during the year?

Accepted Answer

A) $698,000 
B) $314,000 
C) $853,000 
D) $1,167,000 
A) $698,000 
B) $314,000 
C) $853,000 
D) $1,167,000

Question 14

Kyanite Corporation,a manufacturer,reports costs for the year as follows: $$\begin{array} { | l | r | } 
\hline \text { Direct Materials Used } & \$ 735,000 \
\hline \text { Wages to Line Workers } & 510,000 \
\hline \text { Office Rent } & 26,000 \
\hline \text { Indirect Materials Used } & 700,000 \
\hline
\end{array}$$ How much is the total period costs for Kyanite?

Accepted Answer

A) $735,000 
B) $510,000 
C) $26,000 
D) $700,000 
A) $735,000 
B) $510,000 
C) $26,000 
D) $700,000

Question 15

Poodle Grooming Salon provides dog grooming services.In March,the business groomed 245 dogs,earned $10,300 in revenues,and incurred the following operating costs:
 $$\begin{array} { | l | r | } 
\hline \text { Grooming Supplies Expense } & \$ 485 \
\hline \text { Wages Expense } & 3,260 \
\hline \text { Utilities Expense } & 285 \
\hline \text { Rent Expense } & 1,200 \
\hline \text { Depreciation Expense - Equipment } & 500 \
\hline
\end{array}$$ Compute the cost of one grooming.(Round to two decimal places. )

Accepted Answer

Cost of one grooming = Total operating c

Question 16

Barricades Corporation provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Beginning Balance - Work-in-Process Inventory } & \$ 27,000 \
\hline \text { Ending Balance-Work-in-Process Inventory } & 56,000 \
\hline \text { Beginning Balance - Raw Materials Inventory } & 83,000 \
\hline \text { Ending Balance-Raw Materials Inventory } & 60,000 \
\hline \text { Purchases - Raw Materials } & 360,000 \
\hline \text { Direct Labor } & 471,000 \
\hline \text { Indirect Labor } & 18,000 \
\hline \text { Depreciation on Factory Plant and Equipment } & 25,000 \
\hline \text { Plant Utilities and Insurance } & 271,000 \
\hline
\end{array}$$ What was the amount of direct materials used in production during the year?

Accepted Answer

A) $66,000 
B) $360,000 
C) $383,000 
D) $831,000 
A) $66,000 
B) $360,000 
C) $383,000 
D) $831,000

Question 17

Goods that have been started in the manufacturing process but are not yet complete are included in the ________.

Accepted Answer

A) Finished Goods Inventory account 
B) Work-in-Process Inventory account 
C) Raw Materials Inventory account 
D) Cost of Goods Sold account 
A) Finished Goods Inventory account 
B) Work-in-Process Inventory account 
C) Raw Materials Inventory account 
D) Cost of Goods Sold account

Question 18

Which of the following correctly describes the accounting for indirect labor costs?

Accepted Answer

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

Question 19

How is the management of a company accountable to its employees?

Accepted Answer

A) The management must provide products that are safe and free of defects. 
B) The management must provide a safe workplace. 
C) The management must ensure that it earns a net positive return on its investments. 
D) The management must ensure the business is environmentally responsible to its community. 
A) The management must provide products that are safe and free of defects. 
B) The management must provide a safe workplace. 
C) The management must ensure that it earns a net positive return on its investments. 
D) The management must ensure the business is environmentally responsible to its community.

Question 20

One of the primary activities of Rex,Inc.is to purchase hats from Viva,Inc.in Texas and sell them to its customers in Washington for a profit.It is likely that Rex is a ________.

Accepted Answer

A) manufacturing company 
B) hybrid company 
C) service company 
D) merchandising company 
A) manufacturing company 
B) hybrid company 
C) service company 
D) merchandising company

Exam 16: Introduction to Managerial Accounting

A company that uses labor,equipment,supplies,and facilities to convert raw materials into finished products is a ________.

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

Lakeside Manufacturing provided the following information for the month ended March 31: Sales Revenue \ 26,000 Beginning Finished Goods Inventory 8,000 Ending Finished Goods Inventory 13,500 Cost of Goods Manufactured 15,600 Compute cost of goods available for sale.

Which of the following is true of Finished Goods Inventory?

Period costs are the ________.

Goods that are produced by a manufacturing company and are ready to sell are recorded in the _______ account.

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

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

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

Kyanite Corporation,a manufacturer,reports costs for the year as follows: Direct Materials Used \ 735,000 Wages to Line Workers 510,000 Office Rent 26,000 Indirect Materials Used 700,000 How much is the total period costs for Kyanite?

Goods that have been started in the manufacturing process but are not yet complete are included in the ________.

Which of the following correctly describes the accounting for indirect labor costs?

How is the management of a company accountable to its employees?

One of the primary activities of Rex,Inc.is to purchase hats from Viva,Inc.in Texas and sell them to its customers in Washington for a profit.It is likely that Rex is a ________.

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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