Question 1

Product costs,such as direct materials costs,are expensed in the period they are incurred.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Costs are transferred from the balance sheet to the income statement as cost of goods sold when ________.

Accepted Answer

A)  finished goods are sold 
B)  goods are transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account 
C)  direct materials, direct labor and manufacturing overhead are transferred to the beginning Work-in-Process Inventory account 
D)  the total of Cost of Goods Manufactured is determined 
A)  finished goods are sold 
B)  goods are transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account 
C)  direct materials, direct labor and manufacturing overhead are transferred to the beginning Work-in-Process Inventory account 
D)  the total of Cost of Goods Manufactured is determined

Question 4

The following information relates to Wagner,Inc.: $$\begin{array} { | l | r | } 
\hline \text { Advertising Costs } & \$ 10,600 \
\hline \text { Administrative Salaries } & 17,600 \
\hline \text { Delivery Vehicle Depreciation } & 1300 \
\hline \text { Factory Repair and Maintenance } & 200 \
\hline \text { Indirect Labor } & 10,500 \
\hline \text { Indirect Materials } & 10,000 \
\hline \text { Manufacturing Equipment Depreciation } & 1000 \
\hline \text { Office Rent } & 51,000 \
\hline \text { President's Salary } & 2500 \
\hline \text { Sales Revenue } & 530,000 \
\hline \text { Sales Salary } & 4700 \
\hline
\end{array}$$ How much were Wagner's period costs?

Accepted Answer

A)  $87,700 
B)  $21,700 
C)  $534,700 
D)  $7200 
A)  $87,700 
B)  $21,700 
C)  $534,700 
D)  $7200

Question 5

Jasper,Inc.reports the following cost information for March: $$\begin{array} { | l | r | } 
\hline \text { Cost of Goods Manufactured } & \$ 74,100 \
\hline \text { Manufacturing Overhead } & 18,500 \
\hline \text { Finished Goods Inventory, March 1 } & 4000 \
\hline \text { Finished Goods Inventory, March 31 } & 2700 \
\hline \text { Work-in-Process Inventory, March 1 } & 9800 \
\hline \text { Work-in-Process Inventory, March 31 } & 1400 \
\hline \text { Direct Materials Used } & 25,200 \
\hline
\end{array}$$ What is the cost of goods sold for March?

Accepted Answer

A)  $3100 
B)  $72,800 
C)  $75,400 
D)  $78,100 
A)  $3100 
B)  $72,800 
C)  $75,400 
D)  $78,100

Question 6

The officer of the company who has the ultimate responsibility for implementing the company's long and short-term goals is the ________.

Accepted Answer

A)  Chief Financial Officer 
B)  Chair of the Board 
C)  Chief Executive Officer 
D)  Chief Officer for Human Relations 
A)  Chief Financial Officer 
B)  Chair of the Board 
C)  Chief Executive Officer 
D)  Chief Officer for Human Relations

Question 7

Miguel,a manager for Sierra Company,is inspecting the reports provided by his company's accounting department.He wants to decide how to schedule his department's employees in production next week.Miguel is examining ________.

Accepted Answer

A)  managerial accounting information 
B)  financial accounting information 
C)  regulatory accounting information 
D)  organizational accounting information 
A)  managerial accounting information 
B)  financial accounting information 
C)  regulatory accounting information 
D)  organizational accounting information

Question 8

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 9

Super Tread Inc.is a large manufacturer of auto tires.Super Tread has provided the following information: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 55,000 \
\hline \text { Beginning Finished Goods Inventory } & 15,500 \
\hline \text { Cost of Goods Sold } & 37,500 \
\hline \text { Cost of Goods Manufactured } & 44,500 \
\hline
\end{array}$$ Calculate the amount of ending Finished Goods Inventory reported on Super Tread's balance sheet.

Accepted Answer

A)  $10,500 
B)  $60,000 
C)  $22,500 
D)  $7000 
A)  $10,500 
B)  $60,000 
C)  $22,500 
D)  $7000

Question 10

Service companies do not have product costs,so they often consider all operating expenses as part of their cost of service.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following would be considered a product cost for a manufacturing company?

Accepted Answer

A)  salary of the sales manager 
B)  salary of the CEO 
C)  salaries of the accounting staff 
D)  salary of the production manager 
A)  salary of the sales manager 
B)  salary of the CEO 
C)  salaries of the accounting staff 
D)  salary of the production manager

Question 12

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

Question 13

Which of the following represents the combined sum of direct labor costs and manufacturing overhead costs?

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 14

Staff positions are directly involved in providing goods or services to customers.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a philosophy designed to integrate all organizational areas in order to provide customers with superior products and services,while meeting organizational goals throughout the value chain?

Accepted Answer

A)  Supply Chain Management (SCM) 
B)  Just-in-Time (JIT) Management 
C)  Enterprise Resource Planning (ERP) 
D)  Total Quality Management (TQM) 
A)  Supply Chain Management (SCM) 
B)  Just-in-Time (JIT) Management 
C)  Enterprise Resource Planning (ERP) 
D)  Total Quality Management (TQM)

Question 16

Managerial accounting reporting by a public firm is required to follow the rules of GAAP.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following correctly describes the accounting for administrative expenses of a manufacturing company?

Accepted Answer

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

Question 18

Total manufacturing costs to account for during the year minus the ending Work-in-Process Inventory equals the cost of goods manufactured.

Accepted Answer

A) True 
 B)False

Question 19

Identify each cost as a period cost or a product cost.
-Production supervisor's salary

Accepted Answer

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

Question 20

Keegan Corporation reports the following cost information for March: $$\begin{array} { | l | r | } 
\hline \text { Cost of Goods Manufactured } & \$ 76,000 \
\hline \text { Manufacturing Overhead } & 18,900 \
\hline \text { Finished Goods Inventory, March 1 } & 4000 \
\hline \text { Finished Goods Inventory, March 31 } & 3000 \
\hline \text { Work-in-Process Inventory, March 1 } & 9690 \
\hline \text { Work-in-Process Inventory, March 31 } & 1200 \
\hline \text { Direct Labor } & 37,000 \
\hline
\end{array}$$ What is the amount of direct materials used by the company in March?

Accepted Answer

A)  $11,610 
B)  $8490 
C)  $18,100 
D)  $20,100 
A)  $11,610 
B)  $8490 
C)  $18,100 
D)  $20,100

Exam 18: Introduction to Managerial Accounting

Product costs,such as direct materials costs,are expensed in the period they are incurred.

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

Costs are transferred from the balance sheet to the income statement as cost of goods sold when ________.

The officer of the company who has the ultimate responsibility for implementing the company's long and short-term goals is the ________.

Miguel,a manager for Sierra Company,is inspecting the reports provided by his company's accounting department.He wants to decide how to schedule his department's employees in production next week.Miguel is examining ________.

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

Service companies do not have product costs,so they often consider all operating expenses as part of their cost of service.

Which of the following would be considered a product cost 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.

Which of the following represents the combined sum of direct labor costs and manufacturing overhead costs?

Staff positions are directly involved in providing goods or services to customers.

Which of the following is a philosophy designed to integrate all organizational areas in order to provide customers with superior products and services,while meeting organizational goals throughout the value chain?

Managerial accounting reporting by a public firm is required to follow the rules of GAAP.

Which of the following correctly describes the accounting for administrative expenses of a manufacturing company?

Total manufacturing costs to account for during the year minus the ending Work-in-Process Inventory equals the cost of goods manufactured.

Identify each cost as a period cost or a product cost. -Production supervisor's salary

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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