Question 1

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 2

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

Accepted Answer

Period cost is an operating cost that is

Question 3

Hernando Manufacturing,Inc.reported the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Number of Units Produced } & 152,000 \
\hline \text { Number of Units Sold } & 62,000 \
\hline \text { Cost of Goods Manufactured } & \$ 268,000 \
\hline \text { Cost of Goods Sold } & 52,900 \
\hline \text { Sales Revenue } & 130,000 \
\hline \text { Gross Profit } & 72,940 \
\hline \text { Operating Expense } & 727,000 \
\hline
\end{array}$$ What was the unit product cost? (Round your answer to the nearest cent.)

Accepted Answer

A)  $4.32 
B)  $0.86 
C)  $0.85 
D)  $1.76 
A)  $4.32 
B)  $0.86 
C)  $0.85 
D)  $1.76

Question 4

Yoga Universe,Inc.is a fitness center in Tampa,Florida.In October,the company earned
$550,000 in revenues and incurred the following operating costs from 340 customers:
 $$\begin{array} { | l | r | } 
\hline \text { Manager's salary } & \$ 50,000 \
\hline \text { Gym Rent Expense } & 60,000 \
\hline \text { Depreciation Expense-Equipment } & 25,000 \
\hline \text { Office Supplies Expense } & 30,000 \
\hline \text { Utilities Expense } & 89,700 \
\hline \text { Trainer's Salary } & 25,000 \
\hline
\end{array}$$ Required: Prepare Yoga Universe's income statement for the month of October,2019.

Accepted Answer

Yoga Universe
Income Statement
For the m

Question 5

Which of the following correctly describes the accounting for factory depreciation?

Accepted Answer

A)  Factory depreciation is a product cost and is expensed as incurred. 
B)  Factory depreciation is a period cost and is expensed as incurred. 
C)  Factory depreciation is a product cost and is expensed when the manufactured product is sold. 
D)  Factory depreciation is a period cost and is expensed when the manufactured product is sold. 
A)  Factory depreciation is a product cost and is expensed as incurred. 
B)  Factory depreciation is a period cost and is expensed as incurred. 
C)  Factory depreciation is a product cost and is expensed when the manufactured product is sold. 
D)  Factory depreciation is a period cost and is expensed when the manufactured product is sold.

Question 6

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

Accepted Answer

Indirect materials are used in making a

Question 7

Velasco 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,Velasco 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 8

Which of the following functions might be classified as a staff position as opposed to a line position?

Accepted Answer

A)  Division Manager 
B)  Production Manager 
C)  Sales Manager 
D)  Payroll Processing Manager 
A)  Division Manager 
B)  Production Manager 
C)  Sales Manager 
D)  Payroll Processing Manager

Question 9

The salary of a manufacturing plant manager will be included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 10

If a merchandising company determines that the unit cost to purchase a product is less than the unit cost to manufacture the product,the company should make a decision to begin manufacturing the product

Accepted Answer

A) True 
 B)False

Question 11

The entire sequence of activities that add value to a company's products and services is called ________.

Accepted Answer

A)  the value chain 
B)  the planning process 
C)  TQM production chain 
D)  Enterprise Resource Planning 
A)  the value chain 
B)  the planning process 
C)  TQM production chain 
D)  Enterprise Resource Planning

Question 12

Which of the following is TRUE of product costs?

Accepted Answer

A)  They are expensed in the period they are paid. 
B)  For external reporting, GAAP requires that they be expensed before the products are sold. 
C)  They are first recorded in an inventory account. 
D)  For merchandising companies, product costs do not include freight costs. 
A)  They are expensed in the period they are paid. 
B)  For external reporting, GAAP requires that they be expensed before the products are sold. 
C)  They are first recorded in an inventory account. 
D)  For merchandising companies, product costs do not include freight costs.

Question 13

Identify each cost as a period cost or a product cost.
-Materials used in making products

Accepted Answer

A) Product cost 
B) Period cost 
A) Product cost 
B) Period cost

Question 14

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 15

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 of raw material 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 of raw material 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 16

Match each term with its correct definition.
-An accounting field that is required to follow Generally Accepted Accounting Principles.

Accepted Answer

A) Organizational chart 
B) Financial accounting 
C) Line position 
D) Managerial accounting 
E) Planning
F)Directing
G)Controlling 
A) Organizational chart 
B) Financial accounting 
C) Line position 
D) Managerial accounting 
E) Planning
F)Directing
G)Controlling

Question 17

Anika,a division manager,is purchasing materials to ensure she has enough to meet customers' demands.Anika is engaging in the ________.

Accepted Answer

A)  planning function 
B)  directing function 
C)  controlling function 
D)  decision function 
A)  planning function 
B)  directing function 
C)  controlling function 
D)  decision function

Question 18

Managerial accounting is used in manufacturing and merchandising companies,but not in service companies.

Accepted Answer

A) True 
 B)False

Question 19

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 20

For decision-making purposes,________ costs are often divided into prime costs and conversion costs.

Accepted Answer

A)  fixed costs 
B)  product costs 
C)  period costs 
D)  sunk costs 
A)  fixed costs 
B)  product costs 
C)  period costs 
D)  sunk costs

Exam 18: Introduction to Managerial Accounting

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

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

Which of the following correctly describes the accounting for factory depreciation?

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

Which of the following functions might be classified as a staff position as opposed to a line position?

The salary of a manufacturing plant manager will be included in manufacturing overhead.

If a merchandising company determines that the unit cost to purchase a product is less than the unit cost to manufacture the product,the company should make a decision to begin manufacturing the product

The entire sequence of activities that add value to a company's products and services is called ________.

Which of the following is TRUE of product costs?

Identify each cost as a period cost or a product cost. -Materials used in making products

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?

Match each term with its correct definition. -An accounting field that is required to follow Generally Accepted Accounting Principles.

Anika,a division manager,is purchasing materials to ensure she has enough to meet customers' demands.Anika is engaging in the ________.

Managerial accounting is used in manufacturing and merchandising companies,but not in service companies.

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.)

For decision-making purposes,________ costs are often divided into prime costs and conversion costs.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

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

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