Question 1

Which of the following represents the combined sum of direct materials and direct labor?

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 2

In a manufacturing company,advertising and marketing costs are examples of period costs.

Accepted Answer

A) True 
 B)False

Question 3

Douban Corporation provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Beginning Balance - Work-in-Process Inventory } & \$ 26,000 \
\hline \text { Ending Balance-Work-in-Process Inventory } & 58,000 \
\hline \text { Beginning Balance - Raw Materials Inventory } & 83,000 \
\hline \text { Ending Balance-Raw Materials Inventory } & 61,000 \
\hline \text { Purchases - Raw Materials } & 359,000 \
\hline \text { Direct Labor } & 468,000 \
\hline \text { Indirect Labor } & 21,000 \
\hline \text { Depreciation on Factory Plant and Equipment } & 23,000 \
\hline \text { Plant Utilities and Insurance } & 271,000 \
\hline
\end{array}$$ 
What was the total manufacturing costs incurred during the year?

Accepted Answer

A)  $696,000 
B)  $315,000 
C)  $849,000 
D)  $1,164,000 
A)  $696,000 
B)  $315,000 
C)  $849,000 
D)  $1,164,000

Question 4

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

None

Question 5

The following information has been provided by New Age,Inc.: $$\begin{array} { | l | r | } 
\hline \text { Direct Labor } & \$ 25,800 \
\hline \text { Direct Materials Used } & 10,500 \
\hline \text { Raw Materials Purchased } & 16,820 \
\hline \text { Cost of Goods Manufactured } & 48,400 \
\hline \text { Ending Work-in-Process Inventory } & 11,100 \
\hline \text { Corporate Headquarters' Property Taxes } & 2,000 \
\hline \text { Manufacturing Overhead } & 19,200 \
\hline
\end{array}$$ 
Calculate the beginning balance of the Work-in-Process Inventory account.

Accepted Answer

A)  $92,800 
B)  $59,500 
C)  $4,000 
D)  $44,400 
A)  $92,800 
B)  $59,500 
C)  $4,000 
D)  $44,400

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Royal,Inc.purchases each unit of product X for $100 and can sell it in the market for $135.The price of the product for Royal would be $100.

Accepted Answer

A) True 
 B)False

Question 8

Crabapples,Inc.purchases and sells boxes of dried fruit.The following information summarizes its operating activities for the year: $$\begin{array} { | l | r | } 
\hline \text { Selling Expenses } & \$ 9,800 \
\hline \text { Merchandise Inventory on December 31 } & 34,000 \
\hline \text { Merchandise Inventory on January 1 } & 46,200 \
\hline \text { Purchases of merchandise } & 84,000 \
\hline \text { Rent for store } & 12,900 \
\hline \text { Sales commissions } & 7,400 \
\hline \text { Sales revenue } & 161,500 \
\hline
\end{array}$$
 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)  $8.50 
B)  $40.38 
C)  $32.55 
D)  $24.05 
A)  $8.50 
B)  $40.38 
C)  $32.55 
D)  $24.05

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

XO,Inc.reports the following cost information for March: $$\begin{array} { | l | r | } 
\hline \text { Cost of Goods Manufactured } & \$ 71,000 \
\hline \text { Manufacturing Overhead } & 18,300 \
\hline \text { Finished Goods Inventory, March 1 } & 4,000 \
\hline \text { Finished Goods Inventory, March 31 } & 2,000 \
\hline \text { Work-in-Process Inventory, March 1 } & 9,970 \
\hline \text { Work-in-Process Inventory, March 31 } & 1,240 \
\hline \text { Direct Materials Used } & 25,020 \
\hline
\end{array}$$
 What is the amount of direct labor incurred by XO in March?

Accepted Answer

A)  $62,270 
B)  $6,720 
C)  $71,000 
D)  $18,950 
A)  $62,270 
B)  $6,720 
C)  $71,000 
D)  $18,950

Question 11

How does a manufacturing company calculate unit product cost? Why do managers need to know the unit product cost?

Accepted Answer

Unit product cost is calculated by divid

Question 12

Amoeba Manufacturing,Inc.provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Purchases-Raw Materials } & \$ 90,000 \
\hline \text { Plant Utilities and Insurance } & 68,000 \
\hline \text { Indirect Materials } & 11,740 \
\hline \text { Indirect Labor } & 4,050 \
\hline \text { Direct Materials Used in Production } & 99,000 \
\hline \text { Direct Labor } & 117,000 \
\hline \text { Depreciation on Factory Plant \& Equipment } & 5,000 \
\hline
\end{array}$$ 
The inventory account balances as of January 1 are given below.
$$\begin{array} { | l | r | } 
\hline \text { Raw Materials Inventory } & \$ 44,000 \
\hline \text { Work-in-Progress Inventory } & 11,000 \
\hline \text { Finished Goods Inventory } & 49,000 \
\hline
\end{array}$$
 What is the ending balance in the Raw Materials Inventory account?

Accepted Answer

A)  $134,000 
B)  $6,000 
C)  $110,740 
D)  $23,260 
A)  $134,000 
B)  $6,000 
C)  $110,740 
D)  $23,260

Question 13

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 14

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 15

Damsel,Inc.is a large manufacturer of auto tires.Damsel has provided the following information: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 55,000 \
\hline \text { Beginning Finished Goods Inventory } & 18,500 \
\hline \text { Cost of Goods Sold } & 33,000 \
\hline \text { Cost of Goods Manufactured } & 52,000 \
\hline
\end{array}$$ Calculate the amount of ending Finished Goods Inventory reported on Damsel's balance sheet.

Accepted Answer

A)  $3,000 
B)  $70,500 
C)  $37,500 
D)  $19,000 
A)  $3,000 
B)  $70,500 
C)  $37,500 
D)  $19,000

Question 16

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 17

Which of the following is an objective of managerial accounting?

Accepted Answer

A)  to generate a company's financial statements 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 a company's financial statements 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 18

Define indirect materials and give two examples of indirect materials for a manufacturing company.

Accepted Answer

Indirect materials are used in making a

Question 19

Malibu Corporation provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Beginning Balance - Work-in-Process Inventory } & \$ 24,000 \
\hline \text { Ending Balance-Work-in-Process Inventory } & 57,000 \
\hline \text { Beginning Balance - Raw Materials Inventory } & 86,000 \
\hline \text { Ending Balance-Raw Materials Inventory } & 59,000 \
\hline \text { Purchases - Raw Materials } & 362,000 \
\hline \text { Direct Labor } & 471,000 \
\hline \text { Indirect Labor } & 20,000 \
\hline \text { Depreciation on Factory Plant and Equipment } & 22,000 \
\hline \text { Plant Utilities and Insurance } & 271,000 \
\hline
\end{array}$$
 What was the amount of the cost of goods manufactured for the year?

Accepted Answer

A)  $1,372,000 
B)  $1,173,000 
C)  $1,140,000 
D)  $1,206,000 
A)  $1,372,000 
B)  $1,173,000 
C)  $1,140,000 
D)  $1,206,000

Question 20

The accountant for Myra Lido deliberately recorded operating expenses as operating assets in order to record a higher net income for the company.As long as the amount of the misstatement was not material,this would not be considered unethical behavior.

Accepted Answer

A) True 
 B)False

Which of the following represents the combined sum of direct materials and direct labor?

In a manufacturing company,advertising and marketing costs are examples of period costs.

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

Royal,Inc.purchases each unit of product X for $100 and can sell it in the market for $135.The price of the product for Royal would be $100.

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

How does a manufacturing company calculate unit product cost? Why do managers need to know the unit product cost?

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

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

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

Which of the following is an objective of managerial accounting?

Define indirect materials and give two examples of indirect materials for a manufacturing company.

The accountant for Myra Lido deliberately recorded operating expenses as operating assets in order to record a higher net income for the company.As long as the amount of the misstatement was not material,this would not be considered unethical behavior.

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 18: Introduction to Managerial Accounting

Which of the following represents the combined sum of direct materials and direct labor?

In a manufacturing company,advertising and marketing costs are examples of period costs.

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

Royal,Inc.purchases each unit of product X for $100 and can sell it in the market for $135.The price of the product for Royal would be $100.

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

How does a manufacturing company calculate unit product cost? Why do managers need to know the unit product cost?

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

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

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

Which of the following is an objective of managerial accounting?

Define indirect materials and give two examples of indirect materials for a manufacturing company.

The accountant for Myra Lido deliberately recorded operating expenses as operating assets in order to record a higher net income for the company.As long as the amount of the misstatement was not material,this would not be considered unethical behavior.

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