Question 1

Goods a company acquires to use in making products are called:

Accepted Answer

A)  Cost of goods sold. 
B)  Raw materials inventory. 
C)  Finished goods inventory. 
D)  Goods in process inventory. 
E)  Conversion costs. 
A)  Cost of goods sold. 
B)  Raw materials inventory. 
C)  Finished goods inventory. 
D)  Goods in process inventory. 
E)  Conversion costs.

Question 2

Assuming production needs can be met,companies usually prefer:

Accepted Answer

A)  A lower number of days' sales in raw materials inventory. 
B)  A higher number of days' sales in raw materials inventory. 
C)  That days' sales in inventory be higher than the days in the accounting period. 
D)  That days' sales in inventory be greater than the operating cycle 
E)  That days' sales in inventory be equal to the days in the accounting period 
A)  A lower number of days' sales in raw materials inventory. 
B)  A higher number of days' sales in raw materials inventory. 
C)  That days' sales in inventory be higher than the days in the accounting period. 
D)  That days' sales in inventory be greater than the operating cycle 
E)  That days' sales in inventory be equal to the days in the accounting period

Question 3

Expenditures incurred in the process of converting raw materials to finished goods,that include direct labor and factory overhead are known as _________________________.

Accepted Answer

The answer of Expenditures incurred in the process of converting...

Question 4

What are prime costs? What are conversion costs?

Accepted Answer

Prime costs are expenditures directly as

Question 5

Days' sales in raw materials inventory is a measure of:

Accepted Answer

A)  How much raw materials are needed for the company to earn a profit. 
B)  How long it takes the company to pay for raw materials.. 
C)  How many times a company turns over its raw materials during a period. 
D)  How long it takes raw materials to be used in production. 
E)  The product costs a company has incurred during a period. 
A)  How much raw materials are needed for the company to earn a profit. 
B)  How long it takes the company to pay for raw materials.. 
C)  How many times a company turns over its raw materials during a period. 
D)  How long it takes raw materials to be used in production. 
E)  The product costs a company has incurred during a period.

Question 6

Which one of the following items is normally not a manufacturing cost?

Accepted Answer

A)  Direct materials. 
B)  Factory overhead. 
C)  General and administrative expenses. 
D)  Direct labor. 
E)  Conversion cost. 
A)  Direct materials. 
B)  Factory overhead. 
C)  General and administrative expenses. 
D)  Direct labor. 
E)  Conversion cost.

Question 7

____________________ inventory consists of completed products ready for sale by a manufacturer.

Accepted Answer

The answer of ____________________ inventory consists of completed products ready...

Question 8

Expenditures directly associated with the manufacture of finished goods that include direct materials and direct labor are _____________________ costs.

Accepted Answer

The answer of Expenditures directly associated with the manufacture of...

Question 9

Direct costs are incurred for the benefit of more than one cost object.

Accepted Answer

A) True 
 B)False

Question 10

Companies A,B,C,and D are competitors in the same industry.Assume that all have adequate quantities of raw materials to meet production needs.
$\begin{array}{lccccc}
&\text { Company} &\text { Company} &\text { Company} &\text { Company} &\text { Company} \
&\text { AA}&\text { BB}&\text { CC}&\text { DD}&\text { EE}\
\begin{array}{l}
\text { Raw materials used in a } \
\text { year }
\end{array} & \$ 10,000 & \$ 20,000 & \$ 30,000 & \$ 30,000&\$40,000 \
\begin{array}{l}
\text { Beginning raw materials } \
\text { inventory }
\end{array} & \$ 700 & \$ 600 & \$ 500 & \$ 40&\$8000 \
 \begin{array}{l}
\text { Ending raw materials } \
\text { inventory }
\end{array} & \$ 1,100 & \$ 1,000 & \$ 900 & \$ 800&\$1,000 \

\end{array}$
Which company has the best raw materials inventory turnover?

Accepted Answer

A)  Company A 
B)  Company B 
C)  Company C 
D)  Company D 
E)  Company E 
A)  Company A 
B)  Company B 
C)  Company C 
D)  Company D 
E)  Company E

Question 11

A direct cost is a cost that is:

Accepted Answer

A)  Identifiable as controllable. 
B)  Recorded as part of manufacturing overhead. 
C)  Fixed with respect to the volume of activity. 
D)  Traceable to a cost object. 
E)  Sunk with respect to a cost object. 
A)  Identifiable as controllable. 
B)  Recorded as part of manufacturing overhead. 
C)  Fixed with respect to the volume of activity. 
D)  Traceable to a cost object. 
E)  Sunk with respect to a cost object.

Question 12

Indirect materials are accounted for as factory overhead because they are not easily traced to specific units or batches of production.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is true?

Accepted Answer

A)  The IMA's Statement of Ethical Professional Practice requires management accountants to be incompetent, maintain confidentiality, act with integrity, and communicate information in a fair and credible manner. 
B)  The IMA's Statement of Ethical Professional Practice requires management accountants to be competent, maintain confidentiality, eliminate all fraud, and communicate information in a fair and credible manner. 
C)  The IMA's Statement of Ethical Professional Practice requires management accountants to be incompetent, maintain confidentiality, act with integrity, and miscommunicate information in a credible manner. 
D)  The IMA's Statement of Ethical Professional Practice requires management accountants to be competent, maintain confidentiality, act with integrity, and communicate information in a fair and credible manner. 
E)  The IMA's Statement of Ethical Professional Practice requires management accountants to perform certain checks for fraud, act with integrity, and communicate information in a fair and credible manner. 
A)  The IMA's Statement of Ethical Professional Practice requires management accountants to be incompetent, maintain confidentiality, act with integrity, and communicate information in a fair and credible manner. 
B)  The IMA's Statement of Ethical Professional Practice requires management accountants to be competent, maintain confidentiality, eliminate all fraud, and communicate information in a fair and credible manner. 
C)  The IMA's Statement of Ethical Professional Practice requires management accountants to be incompetent, maintain confidentiality, act with integrity, and miscommunicate information in a credible manner. 
D)  The IMA's Statement of Ethical Professional Practice requires management accountants to be competent, maintain confidentiality, act with integrity, and communicate information in a fair and credible manner. 
E)  The IMA's Statement of Ethical Professional Practice requires management accountants to perform certain checks for fraud, act with integrity, and communicate information in a fair and credible manner.

Question 14

Financial accounting relies on accepted principles that are enforced through an extensive set of rules and guidelines; managerial accounting systems are flexible.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements regarding fraud is true?

Accepted Answer

A)  Fraud is a deliberate act. 
B)  Fraud can be deliberate or unintentional. 
C)  A company with a strong code of ethics can eliminate fraud. 
D)  A company with strong internal controls can eliminate fraud. 
E)  The most common type of fraud is financial statement fraud. 
A)  Fraud is a deliberate act. 
B)  Fraud can be deliberate or unintentional. 
C)  A company with a strong code of ethics can eliminate fraud. 
D)  A company with strong internal controls can eliminate fraud. 
E)  The most common type of fraud is financial statement fraud.

Question 16

The following costs are incurred by a manufacturing company.Classify each cost item as either a period cost or a product cost.If the cost is a product cost,identify it as a prime and/or conversion cost.

Accepted Answer

@#IMG-DLM&_TB6312_00

Question 17

Direct materials are not usually easily traced to a product.

Accepted Answer

A) True 
 B)False

Question 18

Use the following information to compute the cost of goods sold for the period:
$\begin{array}{lr}
\text { Beginning raw materials } & \$ 5,500 \
\text { Ending raw materials } & 4,000 \
\text { Direct labor } & 12,250 \
\text { Raw material purchases } & 7,400 \
\text { Depreciation on factory equipment } & 6,500 \
\text { Factory repairs and maintenance } & 3,300 \
\text { Beginning finished goods inventory } & 10,200 \
\text { Ending finished goods inventory } & 8,900 \
\text { Beginning goods in process inventory } & 5,700 \
\text { Ending goods in process inventory } & 6,300
\end{array}$

Accepted Answer

A)  $36,650 
B)  $30,950 
C)  $30,650 
D)  $30,350 
E)  $31,650 
A)  $36,650 
B)  $30,950 
C)  $30,650 
D)  $30,350 
E)  $31,650

Question 19

The following information relates to the manufacturing operations of the IMH Publishing Corporation for the year:
$\begin{array}{lrr}
&\text { Beginning}&\text { Ending }\ 
\text { Raw materials inventory } & \$ 57,000 & \$ 60,000 \
\text { Finished goods } & 68,000 & 60,000
\end{array}$
The raw materials used in manufacturing during the year totaled $118,000.Raw materials purchased during the year amount to:

Accepted Answer

A)  $107,000 
B)  $115,000 
C)  $118,000 
D)  $121,000 
E)  $126,000 
A)  $107,000 
B)  $115,000 
C)  $118,000 
D)  $121,000 
E)  $126,000

Question 20

Match the following terms to the appropriate definitions.
__________ (1) Managerial accounting
__________ (2) Continuous improvement
__________ (3) Raw materials inventory
__________ (4) Customer orientation
__________ (5) Just-in-time manufacturing
__________ (6) Goods in process inventory
__________ (7) Lean business model
__________ (8) Balanced scorecard
__________ (9) Prime costs
__________(10)Raw Materials Inventory Turnover
(a) An idea that rejects the notions of "good enough" and "acceptable" and challenges employees and managers to continually experiment with new and improved business practices.
(b) Goods a company acquires to use in making products.
(c) The ratio which computes how many times a company turns over its raw materials inventory in a period.
(d) A system that acquires inventory and produces only when needed.
(e) An approach that aids continuous improvement by augmenting financial measures with information on the drivers or indicators of future financial performance along the four dimensions of (1)financial; (2)customer; (3)internal business processes; (4)learning and growth.
(f) Expenditures directly associated with the manufacture of finished goods; includes direct materials and direct labor.
(g) An idea that means that employees understand the changing needs and wants of their customers and align their management and operating practices accordingly.
(h) Products in the process of being manufactured but not yet complete.
(i) A model whose goal is to eliminate waste while satisfying the customer and providing a positive return to the company.
(j) An activity that provides financial and nonfinancial information to an organization's managers and other internal decision makers.

Accepted Answer

(1)j,(2)a,(3)b,(4)g,

Exam 14: Managerial Accounting Concepts and Principles

Goods a company acquires to use in making products are called:

Assuming production needs can be met,companies usually prefer:

Expenditures incurred in the process of converting raw materials to finished goods,that include direct labor and factory overhead are known as _________________________.

What are prime costs? What are conversion costs?

Days' sales in raw materials inventory is a measure of:

Which one of the following items is normally not a manufacturing cost?

____________________ inventory consists of completed products ready for sale by a manufacturer.

Expenditures directly associated with the manufacture of finished goods that include direct materials and direct labor are _____________________ costs.

Direct costs are incurred for the benefit of more than one cost object.

A direct cost is a cost that is:

Indirect materials are accounted for as factory overhead because they are not easily traced to specific units or batches of production.

Which of the following statements is true?

Financial accounting relies on accepted principles that are enforced through an extensive set of rules and guidelines; managerial accounting systems are flexible.

Which of the following statements regarding fraud is true?

The following costs are incurred by a manufacturing company.Classify each cost item as either a period cost or a product cost.If the cost is a product cost,identify it as a prime and/or conversion cost.

Direct materials are not usually easily traced to a product.

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash and Internal Controls

Accounts and Notes Receivable

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Job Order Costing and Analysis

Process Costing

Activity-Based Costing and Analysis

Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Decentralization and Performance Measurement

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Accounting With Special Journals

Time Value of Money

Investments and International Operations

Accounting for Partnerships

Filters