Question 1

If a cost is classified as a variable cost in one situation, it may be appropriate to instead classify the same cost as a fixed cost in another situation.

Accepted Answer

A) True 
 B)False

Question 2

Explain the difference between total manufacturing costs and cost of goods manufactured.

Accepted Answer

Total manufacturing costs would consist

Question 3

Refer to Owen Sound Company. Calculate the selling and administrative expenses for the year.

Accepted Answer

Gross margin $215,00

Question 4

Select the appropriate classification of the output generated by each of the following industries.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Medical clinic

Accepted Answer

A) Tangible 
B) Intangible 
A) Tangible 
B) Intangible

Question 5

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Screws used in the production process

Accepted Answer

A) Product Cost, Direct Material 
B) Product Cost, Direct Labour 
C) Product Cost, Manufacturing Overhead 
D) Product Cost, Selling Expense 
E) Product Cost, Administrative Expense
F)Period Cost, Direct Material
G)Period Cost, Direct Labour
H)Period Cost, Manufacturing Overhead
I)Period Cost, Selling Expense
J)Period Cost, Administrative Expense 
A) Product Cost, Direct Material 
B) Product Cost, Direct Labour 
C) Product Cost, Manufacturing Overhead 
D) Product Cost, Selling Expense 
E) Product Cost, Administrative Expense
F)Period Cost, Direct Material
G)Period Cost, Direct Labour
H)Period Cost, Manufacturing Overhead
I)Period Cost, Selling Expense
J)Period Cost, Administrative Expense

Question 6

Katz Group
Katz Group had the following income statement for the month of May. $\begin{array}{lr}
\text { Sales revenue } & \$ 428,000 \
\text { Cost of goods sold } & 205,440 \
\text { Gross margin } & 222,560\\text { Less: }\
\text { Selling expenses } & 81,32 0\
\text { Administrative expenses } & 72,760\\text { Operating income }&\$68,480
\end{array}$
-Refer to Katz Group. What was the cost of goods sold percentage?

Accepted Answer

A)  19% 
B)  48% 
C)  52% 
D)  100% 
A)  19% 
B)  48% 
C)  52% 
D)  100%

Question 7

A fixed cost decreases in total as output decreases.

Accepted Answer

A) True 
 B)False

Question 8

When do materials in the raw materials account become direct materials?

Accepted Answer

A)  when they are put into production 
B)  when they are returned to the supplier 
C)  when the production process is complete 
D)  when they are received from the supplier 
A)  when they are put into production 
B)  when they are returned to the supplier 
C)  when the production process is complete 
D)  when they are received from the supplier

Question 9

Which of the following is an example of a direct materials cost?

Accepted Answer

A)  the engine in an airplane 
B)  the paint on a new bicycle 
C)  the nails in a dining room table 
D)  the glue used to manufacture furniture 
A)  the engine in an airplane 
B)  the paint on a new bicycle 
C)  the nails in a dining room table 
D)  the glue used to manufacture furniture

Question 10

Allocation means that an indirect cost is assigned to a cost object using a reasonable and convenient method.

Accepted Answer

A) True 
 B)False

Question 11

During the month of May, Blackburn Inc. had cost of goods manufactured of $120,000, direct materials cost of $60,000, direct labour cost of $37,000, and manufacturing overhead cost of $26,000. The work-in-process balance at May 31 equalled $10,000. What was the work-in-process balance on May 1?

Accepted Answer

A)  $7,000 
B)  $10,000 
C)  $13,000 
D)  $115,000 
A)  $7,000 
B)  $10,000 
C)  $13,000 
D)  $115,000

Question 12

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Cost of conference for sales team

Accepted Answer

A) Product Cost, Direct Material 
B) Product Cost, Direct Labour 
C) Product Cost, Manufacturing Overhead 
D) Product Cost, Selling Expense 
E) Product Cost, Administrative Expense
F)Period Cost, Direct Material
G)Period Cost, Direct Labour
H)Period Cost, Manufacturing Overhead
I)Period Cost, Selling Expense
J)Period Cost, Administrative Expense 
A) Product Cost, Direct Material 
B) Product Cost, Direct Labour 
C) Product Cost, Manufacturing Overhead 
D) Product Cost, Selling Expense 
E) Product Cost, Administrative Expense
F)Period Cost, Direct Material
G)Period Cost, Direct Labour
H)Period Cost, Manufacturing Overhead
I)Period Cost, Selling Expense
J)Period Cost, Administrative Expense

Question 13

Tamarack Company, a manufacturing firm, has supplied the following information from its accounting records for the month of June.
Direct labour cost $12,000
Purchases of raw materials 17,000
Factory insurance 4,000
Research and development 7,500
Factory property taxes 3,000
Sales commissions paid 4,500
Work-in-process, June 1 2,000
Work-in-process, June 30 2,800
Materials inventory, June 1 1,475
Materials Inventory, June 30 1,200
Finished goods inventory, June 1 2,250
Finished goods inventory, June 30 750
Required: Prepare a statement of cost of goods manufactured

Accepted Answer

Tamarack Company
Statement of Cost of Go

Question 14

Refer to Owen Sound Company. Calculate the per-unit conversion cost.

Accepted Answer

$430,000 (DL) + $645

Question 15

Prairie Plant Company supplied the following data at the end of the current year:
Sales commissions $ 15,000
Sales revenue 150,000
Research and development 17,000
Finished goods inventory, Jan. 1 7,500
Work-in-process inventory, Jan 1 9,000
Finished goods inventory, Dec. 31 6,000
Work-in-process inventory, Dec. 31 11,000
Cost of goods manufactured 50,000
Required: Prepare an income statement for Prairie Plant Company.

Accepted Answer

Prairie Plant Company
Income Statement
F

Question 16

Costs may be directly or indirectly associated with cost objects.

Accepted Answer

A) True 
 B)False

Question 17

Econo Company
In July, Econo Company purchased materials costing $21,000 and incurred direct labour cost of $18,000. Manufacturing overhead totalled $32,000 for the month. Information on inventories was as follows: $\begin{array}{lrr}&\text { July } 1& \text { July } 31\
\text { Materials } & \$ 6,200 & \$ 7,100 \
\text { Work-in-process } & \$ 700 & \$ 1,200 \
\text { Finished goods } & \$ 3,300 & \$ 2,700
\end{array}$
-Refer to Quest Company. What was the conversion cost per unit?

Accepted Answer

A)  $50 
B)  $75 
C)  $95 
D)  $125 
A)  $50 
B)  $75 
C)  $95 
D)  $125

Question 18

What type of organization is the Hudson Bay Company?

Accepted Answer

A)  service organization 
B)  production organization 
C)  manufacturing organization 
D)  merchandising organization 
A)  service organization 
B)  production organization 
C)  manufacturing organization 
D)  merchandising organization

Question 19

Econo Company
In July, Econo Company purchased materials costing $21,000 and incurred direct labour cost of $18,000. Manufacturing overhead totalled $32,000 for the month. Information on inventories was as follows: $\begin{array}{lrr}&\text { July } 1& \text { July } 31\
\text { Materials } & \$ 6,200 & \$ 7,100 \
\text { Work-in-process } & \$ 700 & \$ 1,200 \
\text { Finished goods } & \$ 3,300 & \$ 2,700
\end{array}$
-Refer to Ballard Company. Suppose each set of portable speakers has a per-unit product cost of $112. What would be the cost of finished goods inventory on December 31?

Accepted Answer

A)  $24,640 
B)  $116,480 
C)  $124,640 
D)  $141,120 
A)  $24,640 
B)  $116,480 
C)  $124,640 
D)  $141,120

Question 20

Match each following terms with their correct description from the items listed below.
-A cost that can be easily traced to a cost object

Accepted Answer

A) Period Cost 
B) Direct Cost 
C) Opportunity Cost 
D) Variable Cost 
E) Indirect Cost
F)Fixed Cost
G)Product Cost 
A) Period Cost 
B) Direct Cost 
C) Opportunity Cost 
D) Variable Cost 
E) Indirect Cost
F)Fixed Cost
G)Product Cost

If a cost is classified as a variable cost in one situation, it may be appropriate to instead classify the same cost as a fixed cost in another situation.

Explain the difference between total manufacturing costs and cost of goods manufactured.

Refer to Owen Sound Company. Calculate the selling and administrative expenses for the year.

Select the appropriate classification of the output generated by each of the following industries.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Medical clinic

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Screws used in the production process

A fixed cost decreases in total as output decreases.

When do materials in the raw materials account become direct materials?

Which of the following is an example of a direct materials cost?

Allocation means that an indirect cost is assigned to a cost object using a reasonable and convenient method.

During the month of May, Blackburn Inc. had cost of goods manufactured of $120,000, direct materials cost of $60,000, direct labour cost of $37,000, and manufacturing overhead cost of $26,000. The work-in-process balance at May 31 equalled $10,000. What was the work-in-process balance on May 1?

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Cost of conference for sales team

Refer to Owen Sound Company. Calculate the per-unit conversion cost.

Costs may be directly or indirectly associated with cost objects.

What type of organization is the Hudson Bay Company?

Match each following terms with their correct description from the items listed below. -A cost that can be easily traced to a cost object

Introduction to Managerial Accounting

Cost Behaviour

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Budgeting, Production, Cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

Exam 2: Basic Managerial Accounting Concepts

If a cost is classified as a variable cost in one situation, it may be appropriate to instead classify the same cost as a fixed cost in another situation.

Explain the difference between total manufacturing costs and cost of goods manufactured.

Refer to Owen Sound Company. Calculate the selling and administrative expenses for the year.

Select the appropriate classification of the output generated by each of the following industries.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Medical clinic

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Screws used in the production process

A fixed cost decreases in total as output decreases.

When do materials in the raw materials account become direct materials?

Which of the following is an example of a direct materials cost?

Allocation means that an indirect cost is assigned to a cost object using a reasonable and convenient method.

During the month of May, Blackburn Inc. had cost of goods manufactured of $120,000, direct materials cost of $60,000, direct labour cost of $37,000, and manufacturing overhead cost of $26,000. The work-in-process balance at May 31 equalled $10,000. What was the work-in-process balance on May 1?

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Cost of conference for sales team

Refer to Owen Sound Company. Calculate the per-unit conversion cost.

Costs may be directly or indirectly associated with cost objects.

What type of organization is the Hudson Bay Company?

Match each following terms with their correct description from the items listed below. -A cost that can be easily traced to a cost object

Introduction to Managerial Accounting

Cost Behaviour

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Budgeting, Production, Cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters