Question 1

Direct materials, direct labour, and manufacturing overhead are the three classifications of manufacturing costs.

Accepted Answer

A) True 
 B)False

Question 2

Which statement best describes product costs?

Accepted Answer

A)  Product costs are manufacturing costs. 
B)  Product costs do not include direct materials. 
C)  Product costs do not include manufacturing overhead. 
D)  Product costs are direct materials and direct labour costs only. 
A)  Product costs are manufacturing costs. 
B)  Product costs do not include direct materials. 
C)  Product costs do not include manufacturing overhead. 
D)  Product costs are direct materials and direct labour costs only.

Question 3

An opportunity cost is the benefit given up or sacrificed when one alternative is chosen over another.

Accepted Answer

A) True 
 B)False

Question 4

The Stelco Company manufactures microwave ovens. Last year, the per-unit product cost was $56, the per-unit prime cost was $34, and the per-unit conversion cost was $42. Cost of goods sold for the year was $560,000, and the sale price per unit was $100. In addition, direct labour costs of $200,000 and selling and administrative expenses of $240,000 were incurred.
Required:
A. Calculate how many units were sold last year.
B. Calculate the cost of direct materials used.
C. Calculate the cost of manufacturing overhead.
D. Calculate the gross margin for the year.
E. Calculate operating income.

Accepted Answer

A. Cost of goods sold $560,000/$56 = 10,

Question 5

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 sales revenue percentage?

Accepted Answer

A)  16% 
B)  48% 
C)  52% 
D)  100% 
A)  16% 
B)  48% 
C)  52% 
D)  100%

Question 6

Which expense is included in manufacturing overhead?

Accepted Answer

A)  property taxes on the factory 
B)  utility costs at the head office 
C)  advertising and marketing costs 
D)  computers used at the head office 
A)  property taxes on the factory 
B)  utility costs at the head office 
C)  advertising and marketing costs 
D)  computers used at the head office

Question 7

Nelvana Company makes tablets. During the year, Nelvana manufactured and sold 75,000 tablets at a sales price of $600 per unit. Nelvana's per-unit product cost was $540, and selling and administrative expenses totalled $3,200,000.
Required:
A. Calculate the total sales revenue.
B. Calculate the gross margin.
C. Calculate the operating income.
D. Calculate the operating income if 75,000 tablets were produced and 69,000 were sold.

Accepted Answer

A. 75,000 × $600 = $45,000,000
B. Sales

Question 8

A company's beginning work-in-process inventory is $120,000, its ending work-in-process inventory is $160,000, its cost of goods manufactured is $400,000, and its direct materials used are $100,000. What are the conversion costs?

Accepted Answer

A)  $140,000 
B)  $280,000 
C)  $300,000 
D)  $340,000 
A)  $140,000 
B)  $280,000 
C)  $300,000 
D)  $340,000

Question 9

What is an example of a tangible product?

Accepted Answer

A)  furniture 
B)  funeral care 
C)  legal services 
D)  video rental 
A)  furniture 
B)  funeral care 
C)  legal services 
D)  video rental

Question 10

Becker Corporation
Information from the records of Becker Corporation for December is as follows: $\begin{array}{lr}
\text { Sales } & \$ 1,230,000 \
\text { Selling and administrative expenses } & 210,000 \
\text { Direct materials used } & 300,000 \
\text { Direct labour } & 350,000 \
\text { Manufacturing overhead } & 455,000
\end{array}$

$\text { Inventories }$
$\begin{array}{lrr}
 & \text { Dec. } 1 & \text { Dec. } 31 \
\text { Direct materials }& \$ 36,000 & \$ 42,000 \
\text { Work-in-process } & 75,000 & 84,000 \
\text { Finished goods } & 69,000 & 57,000
\end{array}$
-Refer to Big Blue Bubble Company. Assuming no beginning or ending inventories, what was the cost of goods sold last year?

Accepted Answer

A)  $14,250 
B)  $30,000 
C)  $47,500 
D)  $51,000 
A)  $14,250 
B)  $30,000 
C)  $47,500 
D)  $51,000

Question 11

Refer to TechCom Inc. What was the amount of cost of goods manufactured last month?

Accepted Answer

A)  $1,250,000 
B)  $1,300,000 
C)  $1,750,000 
D)  $2,000,000 
A)  $1,250,000 
B)  $1,300,000 
C)  $1,750,000 
D)  $2,000,000

Question 12

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 operating income percentage?

Accepted Answer

A)  16% 
B)  17% 
C)  19% 
D)  21% 
A)  16% 
B)  17% 
C)  19% 
D)  21%

Question 13

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.
-Factory supervisor's salary

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 14

HaulAll Inc. had a per-unit conversion cost of $4.00 during May and incurred a direct materials cost of $100,000, direct labour costs of $110,000, and manufacturing overhead costs of $50,000. How many units did HaulAll manufacture during May?

Accepted Answer

A)  18,000 
B)  30,000 
C)  40,000 
D)  70,000 
A)  18,000 
B)  30,000 
C)  40,000 
D)  70,000

Question 15

Sales revenue equals the sales price per unit times the number of units in inventory.

Accepted Answer

A) True 
 B)False

Question 16

Nexient Company supplied the following data and information on inventories at the end of the current year.
J January 1 December 31
Materials $21,000 $23,500
Work-in-process 17,500 8,500
Finished goods 26,000 27,000
Direct labour $ 40,000
Selling expenses 31,000
Sales revenue 400,000
Administrative expenses 14,500
Purchases of raw materials 62,000
Factory supervision 50,000
Factory supplies used 25,000
Required: Prepare an income statement of Nexient Company for the current year

Accepted Answer

Nexient Company
Income Statement
For the

Question 17

Which of the following describes cost of goods manufactured?

Accepted Answer

A)  the cost of direct materials used in production 
B)  the product cost of goods sold during the current period 
C)  the cost remaining in ending work-in-process inventory 
D)  the product cost of goods completed during the current period 
A)  the cost of direct materials used in production 
B)  the product cost of goods sold during the current period 
C)  the cost remaining in ending work-in-process inventory 
D)  the product cost of goods completed during the current period

Question 18

List and describe the three categories of manufacturing costs.

Accepted Answer

Direct materials consist of the cost of

Question 19

Which of the following are production costs?

Accepted Answer

A)  direct materials, direct labour, and selling costs 
B)  selling costs, administrative costs, and period costs 
C)  indirect materials, indirect labour, and administrative costs 
D)  direct materials, direct labour, and manufacturing overhead 
A)  direct materials, direct labour, and selling costs 
B)  selling costs, administrative costs, and period costs 
C)  indirect materials, indirect labour, and administrative costs 
D)  direct materials, direct labour, and manufacturing overhead

Question 20

Ganz, Inc. had materials inventory at July 1 of $12,000. The materials inventory at July 31 was $15,000, and the cost of direct materials used in production was $20,000. What was the cost of materials purchased during the month?

Accepted Answer

A)  $17,000 
B)  $20,000 
C)  $23,000 
D)  $35,000 
A)  $17,000 
B)  $20,000 
C)  $23,000 
D)  $35,000

Direct materials, direct labour, and manufacturing overhead are the three classifications of manufacturing costs.

Which statement best describes product costs?

An opportunity cost is the benefit given up or sacrificed when one alternative is chosen over another.

Katz Group Katz Group had the following income statement for the month of May. Sales revenue \ 428,000 Cost of goods sold 205,440 Gross margin 222,560 Less: Selling expenses 81,320 Administrative expenses 72,760 Operating income \6 8,480 -Refer to Katz Group. What was the sales revenue percentage?

Which expense is included in manufacturing overhead?

A company's beginning work-in-process inventory is $120,000, its ending work-in-process inventory is $160,000, its cost of goods manufactured is $400,000, and its direct materials used are $100,000. What are the conversion costs?

What is an example of a tangible product?

Refer to TechCom Inc. What was the amount of cost of goods manufactured last month?

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. -Factory supervisor's salary

HaulAll Inc. had a per-unit conversion cost of $4.00 during May and incurred a direct materials cost of $100,000, direct labour costs of $110,000, and manufacturing overhead costs of $50,000. How many units did HaulAll manufacture during May?

Sales revenue equals the sales price per unit times the number of units in inventory.

Which of the following describes cost of goods manufactured?

List and describe the three categories of manufacturing costs.

Which of the following are production costs?

Ganz, Inc. had materials inventory at July 1 of $12,000. The materials inventory at July 31 was $15,000, and the cost of direct materials used in production was $20,000. What was the cost of materials purchased during the month?

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

Direct materials, direct labour, and manufacturing overhead are the three classifications of manufacturing costs.

Which statement best describes product costs?

An opportunity cost is the benefit given up or sacrificed when one alternative is chosen over another.

Katz Group Katz Group had the following income statement for the month of May. Sales revenue \ 428,000 Cost of goods sold 205,440 Gross margin 222,560 Less: Selling expenses 81,320 Administrative expenses 72,760 Operating income \6 8,480 -Refer to Katz Group. What was the sales revenue percentage?

Which expense is included in manufacturing overhead?

A company's beginning work-in-process inventory is $120,000, its ending work-in-process inventory is $160,000, its cost of goods manufactured is $400,000, and its direct materials used are $100,000. What are the conversion costs?

What is an example of a tangible product?

Refer to TechCom Inc. What was the amount of cost of goods manufactured last month?

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. -Factory supervisor's salary

HaulAll Inc. had a per-unit conversion cost of $4.00 during May and incurred a direct materials cost of $100,000, direct labour costs of $110,000, and manufacturing overhead costs of $50,000. How many units did HaulAll manufacture during May?

Sales revenue equals the sales price per unit times the number of units in inventory.

Which of the following describes cost of goods manufactured?

List and describe the three categories of manufacturing costs.

Which of the following are production costs?

Ganz, Inc. had materials inventory at July 1 of $12,000. The materials inventory at July 31 was $15,000, and the cost of direct materials used in production was $20,000. What was the cost of materials purchased during the month?

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