Question 1

Which of the following correctly describes the accounting for factory depreciation?

Accepted Answer

A) Factory depreciation is a product cost and is expensed as incurred. 
B) Factory depreciation is a period cost and is expensed as incurred. 
C) Factory depreciation is a product cost and is expensed when the manufactured product is sold. 
D) Factory depreciation is a period cost and is expensed when the manufactured product is sold. 
A) Factory depreciation is a product cost and is expensed as incurred. 
B) Factory depreciation is a period cost and is expensed as incurred. 
C) Factory depreciation is a product cost and is expensed when the manufactured product is sold. 
D) Factory depreciation is a period cost and is expensed when the manufactured product is sold.

Question 2

Financial statements prepared for investors and creditors often include forward-looking information because they make decisions based on a company's future prospects.

Accepted Answer

A) True 
 B)False

Question 3

Planet Manufacturing provided the following information for the month ended March 31:
   
Prepare the income statement.

Accepted Answer

The answer of Planet Manufacturing provided the following information for...

Question 4

If a merchandising company determines that the unit cost to purchase a product is less than the unit cost to manufacture the product,the company should make a decision to begin manufacturing the product

Accepted Answer

A) True 
 B)False

Question 5

Best,Inc. ,a merchandiser,sells office supplies.The following information summarizes Best's operating activities during the year:
   
Required: Prepare an income statement for Best,Inc.for the year ended December 31,using the format below.

Accepted Answer

The answer of Best,Inc. ,a merchandiser,sells office supplies.The following information...

Question 6

Direct materials and direct labor are prime costs.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following would appear as a line item on the income statements of both a merchandiser and a manufacturer?

Accepted Answer

A) Direct Labor 
B) Cost of Goods Manufactured 
C) Direct Materials 
D) Cost of Goods Sold 
A) Direct Labor 
B) Cost of Goods Manufactured 
C) Direct Materials 
D) Cost of Goods Sold

Question 8

Which of the following statements is true of financial accounting?

Accepted Answer

A) It provides information to investors needed for their investment decisions. 
B) It provides forward-looking information needed for managing and delegating operations. 
C) It focuses on detailed reports for parts of the company rather than the whole company. 
D) It focuses on planning and controlling day-to-day operations. 
A) It provides information to investors needed for their investment decisions. 
B) It provides forward-looking information needed for managing and delegating operations. 
C) It focuses on detailed reports for parts of the company rather than the whole company. 
D) It focuses on planning and controlling day-to-day operations.

Question 9

Which of the following would be classified as a prime cost?

Accepted Answer

A) cost of direct materials used 
B) depreciation on factory equipment 
C) salary of sales personnel 
D) depreciation on office furniture 
A) cost of direct materials used 
B) depreciation on factory equipment 
C) salary of sales personnel 
D) depreciation on office furniture

Question 10

Houston Corporation reports the following cost information for March:
 
What is the amount of direct materials used by the company in March?

Accepted Answer

A) $7,100 
B) $8,400 
C) $17,500 
D) $15,500 
A) $7,100 
B) $8,400 
C) $17,500 
D) $15,500

Question 11

The IMA Standards of Ethical Practice include confidentiality,competence,credibility,and integrity.

Accepted Answer

A) True 
 B)False

Question 12

Goods that are produced by a manufacturing company and are ready to sell are recorded in the _______ account.

Accepted Answer

A) Raw Materials Inventory 
B) Work-in-Process Inventory 
C) Manufacturing Overhead 
D) Finished Goods Inventory 
A) Raw Materials Inventory 
B) Work-in-Process Inventory 
C) Manufacturing Overhead 
D) Finished Goods Inventory

Question 13

A company that uses labor,equipment,supplies,and facilities to convert raw materials into finished products is a ________.

Accepted Answer

A) merchandising company 
B) manufacturing company 
C) service company 
D) trading company 
A) merchandising company 
B) manufacturing company 
C) service company 
D) trading company

Question 14

In a manufacturing company,wages and benefits of assembly line workers are included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 15

Anything for which managers want a separate measurement of cost is called a ________.

Accepted Answer

A) responsibility center 
B) cost object 
C) profit object 
D) conversion cost 
A) responsibility center 
B) cost object 
C) profit object 
D) conversion cost

Question 16

The three categories of period costs are direct materials,direct labor,and manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 17

A merchandiser does not need to calculate cost per unit because it resells goods that are already manufactured.

Accepted Answer

A) True 
 B)False

Question 18

In a manufacturing company,accounting,legal,and administrative costs are typical examples of product costs.

Accepted Answer

A) True 
 B)False

Question 19

Simons,Inc.sells plasticware.The following information summarizes Simons' operating activities for the year:
   
Prepare an income statement for Simons,Inc. ,a merchandiser,for the year ended December 31 using the format below:

Accepted Answer

The answer of Simons,Inc.sells plasticware.The following information summarizes Simons' operating...

Question 20

Period costs are the ________.

Accepted Answer

A) product costs that must be paid in the accounting period in which they are incurred 
B) costs that are incurred and expensed during the same accounting period 
C) costs related to production of products the company purchases and sells 
D) same as manufacturing overhead costs 
A) product costs that must be paid in the accounting period in which they are incurred 
B) costs that are incurred and expensed during the same accounting period 
C) costs related to production of products the company purchases and sells 
D) same as manufacturing overhead costs

Exam 18: Introduction to Managerial Accounting

Which of the following correctly describes the accounting for factory depreciation?

Financial statements prepared for investors and creditors often include forward-looking information because they make decisions based on a company's future prospects.

Planet Manufacturing provided the following information for the month ended March 31: Prepare the income statement.

If a merchandising company determines that the unit cost to purchase a product is less than the unit cost to manufacture the product,the company should make a decision to begin manufacturing the product

Best,Inc. ,a merchandiser,sells office supplies.The following information summarizes Best's operating activities during the year: Required: Prepare an income statement for Best,Inc.for the year ended December 31,using the format below.

Direct materials and direct labor are prime costs.

Which of the following would appear as a line item on the income statements of both a merchandiser and a manufacturer?

Which of the following statements is true of financial accounting?

Which of the following would be classified as a prime cost?

Houston Corporation reports the following cost information for March: What is the amount of direct materials used by the company in March?

The IMA Standards of Ethical Practice include confidentiality,competence,credibility,and integrity.

Goods that are produced by a manufacturing company and are ready to sell are recorded in the _______ account.

A company that uses labor,equipment,supplies,and facilities to convert raw materials into finished products is a ________.

In a manufacturing company,wages and benefits of assembly line workers are included in manufacturing overhead.

Anything for which managers want a separate measurement of cost is called a ________.

The three categories of period costs are direct materials,direct labor,and manufacturing overhead.

A merchandiser does not need to calculate cost per unit because it resells goods that are already manufactured.

In a manufacturing company,accounting,legal,and administrative costs are typical examples of product costs.

Simons,Inc.sells plasticware.The following information summarizes Simons' operating activities for the year: Prepare an income statement for Simons,Inc. ,a merchandiser,for the year ended December 31 using the format below:

Period costs are the ________.

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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