Question 1

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

Accepted Answer

A) advertising expense 
B) depreciation on factory equipment 
C) indirect materials 
D) property taxes for the factory 
A) advertising expense 
B) depreciation on factory equipment 
C) indirect materials 
D) property taxes for the factory

Question 2

Which of the following is a product cost?

Accepted Answer

A) sales commissions 
B) CEO's salary 
C) delivery van depreciation 
D) depreciation on production equipment 
A) sales commissions 
B) CEO's salary 
C) delivery van depreciation 
D) depreciation on production equipment

Question 3

Which of the following formulas represents cost of goods sold for a merchandising business?

Accepted Answer

A) Beginning Merchandise Inventory - Ending Merchandise Inventory = Cost of Goods Sold 
B) Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold 
C) Ending Merchandise Inventory + Purchases and Freight In - Beginning Merchandise Inventory = Cost of Goods Sold 
D) Beginning Merchandise Inventory + Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold 
A) Beginning Merchandise Inventory - Ending Merchandise Inventory = Cost of Goods Sold 
B) Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold 
C) Ending Merchandise Inventory + Purchases and Freight In - Beginning Merchandise Inventory = Cost of Goods Sold 
D) Beginning Merchandise Inventory + Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold

Question 4

The balance sheet of a ________ company will include Work-in-Process Inventory as a line item.

Accepted Answer

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

Question 5

Arturo Manufacturing,Inc.provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Beginning Balance - Work-in-Process Inventory } & \$ 150,000 \
\hline \text { Ending Balance - Work-in-Process Inventory } & 62,500 \
\hline \text { Beginning Balance - Raw Materials Inventory } & 269,000 \
\hline \text { Ending Balance - Raw Materials Inventory } & 53,700 \
\hline \text { Purchases - Raw Materials } & 133,000 \
\hline \text { Direct Labor } & 74,380 \
\hline \text { Indirect Materials } & 52,350 \
\hline \text { Indirect Labor } & 132,500 \
\hline \text { Depreciation on Factory Plant and Equipment } & 72,160 \
\hline \text { Plant Utilities and Insurance } & 70,980 \
\hline
\end{array}$$ How much is the cost of goods manufactured?

Accepted Answer

A) $838,170 
B) $750,670 
C) $900,670 
D) $766,010 
A) $838,170 
B) $750,670 
C) $900,670 
D) $766,010

Question 6

Riverside Manufacturing provided the following information for the month ended March 31: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 27,000 \
\hline \text { Beginning Finished Goods Inventory } & 17,000 \
\hline \text { Ending Finished Goods Inventory } & 7,500 \
\hline \text { Cost of Goods Manufactured } & 11,600 \
\hline
\end{array}$$ Compute gross profit.

Accepted Answer

A) $5,900 
B) $15,400 
C) $24,900 
D) $7,900 
A) $5,900 
B) $15,400 
C) $24,900 
D) $7,900

Question 7

Define direct cost.

Accepted Answer

A direct cost is a c

Question 8

In a manufacturing company,administrative costs are included in period costs.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is true of Just-in-Time (JIT)Management?

Accepted Answer

A) It results in more storage and insurance costs. 
B) It is a system in which the company produces products only after receiving an order. 
C) It promotes surplus inventory to prevent production shut-down in case of supply interruptions. 
D) It requires a surplus inventory of finished goods to ensure timely,or just-in-time,delivery to customers. 
A) It results in more storage and insurance costs. 
B) It is a system in which the company produces products only after receiving an order. 
C) It promotes surplus inventory to prevent production shut-down in case of supply interruptions. 
D) It requires a surplus inventory of finished goods to ensure timely,or just-in-time,delivery to customers.

Question 10

Classify each cost of a furniture manufacturer as either product cost (PR)or period cost (PE).
 $$\begin{array} { | l | l | } 
\hline{ \text { Cost } } & \text { PR or PE } \
\hline \text { Vice president of marketing's salary } & \
\hline \text { Delivery expense } & \
\hline \text { Wood used to make tables } & \
\hline \text { Depreciation on office equipment } & \
\hline \text { Production supervisor's salary } & \
\hline \text { Factory insurance } & \
\hline \text { Corporate office rent } & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | l | } 
\hline {

Question 11

Managerial accounting information for a company is primarily used by ________.

Accepted Answer

A) its customers to understand the pricing of the product 
B) its creditors to understand the credibility of the business 
C) its employees to plan and control operations 
D) its investors to make their investment decisions 
A) its customers to understand the pricing of the product 
B) its creditors to understand the credibility of the business 
C) its employees to plan and control operations 
D) its investors to make their investment decisions

Question 12

ERP systems can integrate all of a company's functions,departments,and data into a single system.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is true of financial accounting?

Accepted Answer

A) It provides information to investors needed for their investment decisions. 
B) It provides forward-looking information needed for managing and delegating operations. 
C) It focuses on detailed reports for parts of the company rather than the whole company. 
D) It focuses on planning and controlling day-to-day operations. 
A) It provides information to investors needed for their investment decisions. 
B) It provides forward-looking information needed for managing and delegating operations. 
C) It focuses on detailed reports for parts of the company rather than the whole company. 
D) It focuses on planning and controlling day-to-day operations.

Question 14

Managerial accounting reporting by a public firm is required to follow the rules of GAAP and guidelines of the Securities and Exchange Commission.

Accepted Answer

A) True 
 B)False

Question 15

In a manufacturing company,wages and benefits of factory managers are considered as product costs.

Accepted Answer

A) True 
 B)False

Question 16

Kentucky,Inc.purchases and sells widgets.The following information summarizes the company's operating activities for the year: $$\begin{array} { | l | r | } 
\hline \text { Selling and Administrative Expenses } & \$ 5,300 \
\hline \text { Purchases } & 157,000 \
\hline \text { Sales Revenue } & 785,000 \
\hline \text { Merchandise Inventory, January 1 } & 2,350 \
\hline \text { Merchandise Inventory, December 31 } & 38,350 \
\hline
\end{array}$$ If the company sold 7,900 units of widgets during the year,how much is the cost for one widget? (Round your answer to the nearest cent. )

Accepted Answer

A) $19.87 
B) $15.32 
C) $20.17 
D) $5.15 
A) $19.87 
B) $15.32 
C) $20.17 
D) $5.15

Question 17

Viva,Inc.has provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Cost of Goods Manufactured } & \$ 1,261,000 \
\hline \text { Beginning Balance - Finished Goods Inventory } & 99,000 \
\hline \text { Ending Balance - Finished Goods Inventory } & 85,000 \
\hline
\end{array}$$ How much is the cost of goods sold?

Accepted Answer

A) $184,000 
B) $1,275,000 
C) $1,261,000 
D) $1,247,000 
A) $184,000 
B) $1,275,000 
C) $1,261,000 
D) $1,247,000

Question 18

Robbinsdale,Inc.is a merchandiser of stone ornaments.The company sold 8,000 units during the year.The company has provided the following information: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 559,000 \
\hline \text { Purchases (excluding freight in) } & 303,000 \
\hline \text { Selling and Administrative Expenses } & 67,000 \
\hline \text { Freight In } & 14,000 \
\hline \text { Beginning Merchandise Inventory } & 46,000 \
\hline \text { Ending Merchandise Inventory } & 43,000 \
\hline
\end{array}$$ What is the cost of goods available for sale for the year?

Accepted Answer

A) $363,000 
B) $320,000 
C) $349,000 
D) $335,000 
A) $363,000 
B) $320,000 
C) $349,000 
D) $335,000

Question 19

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

Accepted Answer

Unit cost per item is calculated by divi

Question 20

For each of the following,indicate whether the statement relates to managerial accounting (MA)or financial accounting (FA):
 $$\begin{array} { | l | l | } 
\hline \text { Statement } & \begin{array} { l } 
\text { Applies to } \
\text { MA or FA }
\end{array} \
\hline \text { How reports will affect employee behavior is a } & \
\text { concern. } & \
\hline \text { Summary reports are prepared primarily on the } & \
\text { company as a whole, usually on a quarterly or annual } & \
\text { basis. } & \
\hline \text { Relevant information and focus on the future. } & \
\hline \text { Primary users include investors, creditors, and } & \
\text { government authorities. } & \
\hline \text { There is no requirement to follow GAAP. } & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | l | } 
\hline \t

Exam 16: Introduction to Managerial Accounting

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

Which of the following is a product cost?

Which of the following formulas represents cost of goods sold for a merchandising business?

The balance sheet of a ________ company will include Work-in-Process Inventory as a line item.

Riverside Manufacturing provided the following information for the month ended March 31: Sales Revenue \ 27,000 Beginning Finished Goods Inventory 17,000 Ending Finished Goods Inventory 7,500 Cost of Goods Manufactured 11,600 Compute gross profit.

Define direct cost.

In a manufacturing company,administrative costs are included in period costs.

Which of the following is true of Just-in-Time (JIT)Management?

Classify each cost of a furniture manufacturer as either product cost (PR)or period cost (PE). Cost PR or PE Vice president of marketing's salary Delivery expense Wood used to make tables Depreciation on office equipment Production supervisor's salary Factory insurance Corporate office rent

Managerial accounting information for a company is primarily used by ________.

ERP systems can integrate all of a company's functions,departments,and data into a single system.

Which of the following statements is true of financial accounting?

Managerial accounting reporting by a public firm is required to follow the rules of GAAP and guidelines of the Securities and Exchange Commission.

In a manufacturing company,wages and benefits of factory managers are considered as product costs.

Viva,Inc.has provided the following information for the year: Cost of Goods Manufactured \ 1,261,000 Beginning Balance - Finished Goods Inventory 99,000 Ending Balance - Finished Goods Inventory 85,000 How much is the cost of goods sold?

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

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