Question 1

Which of the following are classified as manufacturing overhead?

Accepted Answer

A)  Direct materials and direct labour 
B)  Indirect labour and indirect materials 
C)  All materials 
D)  Factory rent and direct labour 
A)  Direct materials and direct labour 
B)  Indirect labour and indirect materials 
C)  All materials 
D)  Factory rent and direct labour

Question 2

Use the information below to answer the following question(s).
Olde Tyme Beverage Company's operating activities for the year are listed below.
  
-What is the cost of goods available for sale at the Olde Tyme Beverage Company?

Accepted Answer

A)  $128,000 
B)  $132,000 
C)  $63,000 
D)  $144,000 
A)  $128,000 
B)  $132,000 
C)  $63,000 
D)  $144,000

Question 3

Differentiate between:
A. Direct materials versus indirect materials
B. Direct labour versus indirect labour

Accepted Answer

Student responses will vary but should i

Question 4

Which of the following describes full costs for a product for profitability analysis?

Accepted Answer

A)  Full product costs are narrower in scope than inventoriable product costs. 
B)  Full product costs consist of direct materials, direct labour and manufacturing overhead. 
C)  Full product costs include all costs of the value chain. 
D)  Full product costs do not include non-manufacturing costs. 
A)  Full product costs are narrower in scope than inventoriable product costs. 
B)  Full product costs consist of direct materials, direct labour and manufacturing overhead. 
C)  Full product costs include all costs of the value chain. 
D)  Full product costs do not include non-manufacturing costs.

Question 5

Advertising expenses would be considered which part of the value chain?

Accepted Answer

A)  Customer service 
B)  Marketing 
C)  Production 
D)  Research and development 
A)  Customer service 
B)  Marketing 
C)  Production 
D)  Research and development

Question 6

Use the information below to answer the following question(s).
Back Yards Inc. sells lawn furniture. The following information summarizes the company's operating expenses for the year:
  
-What was operating income for the year at Back Yards Inc.?

Accepted Answer

A)  $86,000 
B)  $81,000 
C)  $96,000 
D)  $76,000 
A)  $86,000 
B)  $81,000 
C)  $96,000 
D)  $76,000

Question 7

Use the information below to answer the following question(s).
Macadamia Co. produced and sold 40,000 units last year. Per unit revenue and costs were as follows:
   
Fixed manufacturing overhead and administrative salaries are fixed costs. The per unit amounts are based on last year's production.
-Calculate this year's operating income if the company plans to produce and sell 60,000 units.

Accepted Answer

A)  $150,000 
B)  $0 
C)  $(300,000) 
D)  $(650,000) 
E)  $300,000 
A)  $150,000 
B)  $0 
C)  $(300,000) 
D)  $(650,000) 
E)  $300,000

Question 8

You are planning to buy a new car. Based on your market research you have narrowed the decision to a choice between a Honda Civic and a Toyota Corolla. Since you are indifferent between the two vehicles you decide to base you decision on relevant cost only. You will be trading in your current vehicle which you purchased used a year ago. You expect to keep the new vehicle for five years. You have gathered the following data for use in your decision:
   
Required:
A. Which if any of the listed costs above are not relevant to your decision?
B. What are the total relevant costs and allowances of purchasing the Civic?
C. What are the total relevant costs and allowances of purchasing the Corolla?
D. What is the differential cost involved in your decision?

Accepted Answer

A. Purchase price of current vehicle - $

Question 9

Among other things, General Mills makes breakfast cereal. Which type of company is General Mills?

Accepted Answer

A)  Manufacturer 
B)  Service company 
C)  Retailer 
D)  Wholesaler 
A)  Manufacturer 
B)  Service company 
C)  Retailer 
D)  Wholesaler

Question 10

Getting to school for your 8 A.M. class doesn't leave much time for breakfast, and you are quite hungry by the time class ends. It is a long walk to the cafeteria, the lines are long once you get there, and you find yourself having to decide between having breakfast and getting to your next class on time. Many of your friends have expressed the same problem. The administration has agreed to let you set up a table just outside the building where you will sell various snacks for $1 each. You have agreed to pay the administration $500 per month and salaries to your friends to run the business will be another $500 per month. It will cost you 50 cents each to buy the pre- packaged snacks. You believe you can sell 2,000 snack packs per month.
a. What are the total fixed costs per month?
b. What are the total variable costs per month?
c. What is the fixed cost per snack pack?
d. What is the variable cost per snack pack?
e. What is the average cost per snack pack?
f. What is the average profit margin per snack pack?
g. Based on your analysis, should you start the snack pack business?

Accepted Answer

a. $1,000 ($500 + $500)
b. $1,000 (50 ce

Question 11

Describe a company that has some elements of all three types of companies. It is part service company, part manufacturer, and part merchandiser.

Accepted Answer

Many restaurants fall into this category

Question 12

Cost tracing is

Accepted Answer

A)  the assignment of direct costs to the chosen cost object. 
B)  a function of cost allocation. 
C)  the process of determining the actual cost of the cost object. 
D)  the assignment of both direct and indirect costs associated with a cost object. 
A)  the assignment of direct costs to the chosen cost object. 
B)  a function of cost allocation. 
C)  the process of determining the actual cost of the cost object. 
D)  the assignment of both direct and indirect costs associated with a cost object.

Question 13

Use the information below to answer the following question(s).
Country Furniture Company manufactures furniture at its Halifax, Nova Scotia, factory. Some of its costs from the past year include:
  
-Direct material costs for Country Furniture Company totaled

Accepted Answer

A)  $82,000. 
B)  $10,000. 
C)  $95,000. 
D)  $92,000. 
A)  $82,000. 
B)  $10,000. 
C)  $95,000. 
D)  $92,000.

Question 14

Use the information below to answer the following question(s).
Rustic Living Furniture Company manufactures furniture at its Saskatoon Saskatchewan factory. Some of its costs from the past year include:
  
-Prime costs for Rustic Living Furniture Company totaled

Accepted Answer

A)  $126,000. 
B)  $23,000. 
C)  $123,000. 
D)  $168,500. 
A)  $126,000. 
B)  $23,000. 
C)  $123,000. 
D)  $168,500.

Question 15

Use the information below to answer the following question(s).
Montreal Industries Inc. had the following activities during the year:
  
-What is Montreal's cost of goods manufactured during the year?

Accepted Answer

A)  $268,000 
B)  $248,000 
C)  $240,000 
D)  $238,000 
A)  $268,000 
B)  $248,000 
C)  $240,000 
D)  $238,000

Question 16

All of the components of manufacturing from research and development through customer service after the sale are part of a firm's value chain.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is an example of a fixed cost for a manufacturer?

Accepted Answer

A)  Salary of plant manager 
B)  Sales commissions 
C)  Direct materials 
D)  Delivery costs 
A)  Salary of plant manager 
B)  Sales commissions 
C)  Direct materials 
D)  Delivery costs

Question 18

The owner of Fat Man's Sausage Cart is concerned because the stand has been averaging only 5,500 sausage sales per month, the stand and staff can make 7,000 sausages on a bun per month. The variable cost of each sausage (buns, meat etc.) is $3.50. Monthly fixed costs are (taxes, licenses, space rent and salaries) are $10,000. The owner (Big Bob) believes he could sell 7,000 sausages per month if he cuts the sales price from $7.50 to $7.00 per sausage. How much extra profit (above the current level) would he generate if he decreased the sales price?

Accepted Answer

New profit = (7,000 × $7.00) -

Question 19

Explain the difference between raw materials inventory, work in process inventory, and finished goods inventory.

Accepted Answer

Raw materials inventory includes all mat

Question 20

Match the following:
A) Service company
B) Manufacturing company
C) Merchandising company
1) Generally has no inventory
2) Has three types of inventory
3) Inventory consists of freight-in and the purchase cost of the finished product
4) Has the highest percentage of labour costs
5) Walmart is this type of company

Accepted Answer

Answers: 1

Which of the following are classified as manufacturing overhead?

Use the information below to answer the following question(s). Olde Tyme Beverage Company's operating activities for the year are listed below. -What is the cost of goods available for sale at the Olde Tyme Beverage Company?

Differentiate between: A. Direct materials versus indirect materials B. Direct labour versus indirect labour

Which of the following describes full costs for a product for profitability analysis?

Advertising expenses would be considered which part of the value chain?

Use the information below to answer the following question(s). Back Yards Inc. sells lawn furniture. The following information summarizes the company's operating expenses for the year: -What was operating income for the year at Back Yards Inc.?

Among other things, General Mills makes breakfast cereal. Which type of company is General Mills?

Describe a company that has some elements of all three types of companies. It is part service company, part manufacturer, and part merchandiser.

Cost tracing is

Use the information below to answer the following question(s). Country Furniture Company manufactures furniture at its Halifax, Nova Scotia, factory. Some of its costs from the past year include: -Direct material costs for Country Furniture Company totaled

Use the information below to answer the following question(s). Rustic Living Furniture Company manufactures furniture at its Saskatoon Saskatchewan factory. Some of its costs from the past year include: -Prime costs for Rustic Living Furniture Company totaled

Use the information below to answer the following question(s). Montreal Industries Inc. had the following activities during the year: -What is Montreal's cost of goods manufactured during the year?

All of the components of manufacturing from research and development through customer service after the sale are part of a firm's value chain.

Which of the following is an example of a fixed cost for a manufacturer?

Explain the difference between raw materials inventory, work in process inventory, and finished goods inventory.

Introduction to Managerial Accounting

Cost Behaviour

Cost-Volume-Profit Analysis

Job Costing

Process Costing

Activity Based Costing

Short-Term Business Decisions

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Capital Investment Decisions and the Time Value of Money

Filters

Exam 2: Building Blocks of Managerial Accounting

Which of the following are classified as manufacturing overhead?

Use the information below to answer the following question(s). Olde Tyme Beverage Company's operating activities for the year are listed below. -What is the cost of goods available for sale at the Olde Tyme Beverage Company?

Differentiate between: A. Direct materials versus indirect materials B. Direct labour versus indirect labour

Which of the following describes full costs for a product for profitability analysis?

Advertising expenses would be considered which part of the value chain?

Use the information below to answer the following question(s). Back Yards Inc. sells lawn furniture. The following information summarizes the company's operating expenses for the year: -What was operating income for the year at Back Yards Inc.?

Among other things, General Mills makes breakfast cereal. Which type of company is General Mills?

Describe a company that has some elements of all three types of companies. It is part service company, part manufacturer, and part merchandiser.

Cost tracing is

Use the information below to answer the following question(s). Country Furniture Company manufactures furniture at its Halifax, Nova Scotia, factory. Some of its costs from the past year include: -Direct material costs for Country Furniture Company totaled

Use the information below to answer the following question(s). Rustic Living Furniture Company manufactures furniture at its Saskatoon Saskatchewan factory. Some of its costs from the past year include: -Prime costs for Rustic Living Furniture Company totaled

Use the information below to answer the following question(s). Montreal Industries Inc. had the following activities during the year: -What is Montreal's cost of goods manufactured during the year?

All of the components of manufacturing from research and development through customer service after the sale are part of a firm's value chain.

Which of the following is an example of a fixed cost for a manufacturer?

Explain the difference between raw materials inventory, work in process inventory, and finished goods inventory.

Introduction to Managerial Accounting

Cost Behaviour

Cost-Volume-Profit Analysis

Job Costing

Process Costing

Activity Based Costing

Short-Term Business Decisions

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Capital Investment Decisions and the Time Value of Money

Filters