Question 1

The plant manager's salary in a manufacturing business would be considered an indirect cost.

Accepted Answer

A) True 
 B)False

Question 2

The costs of materials and labor that do not enter directly into the finished product are classified as factory overhead.

Accepted Answer

A) True 
 B)False

Question 3

Planning is the process of developing the company's objectives or goals and translating these objectives into courses of action.

Accepted Answer

A) True 
 B)False

Question 4

The primary goal of managerial accounting is to provide information to:

Accepted Answer

A)  investors 
B)  creditors 
C)  management 
D)  external auditors 
A)  investors 
B)  creditors 
C)  management 
D)  external auditors

Question 5

The cost of goods sold for Heedy manufacturing in 2011 was $233,000. The January 1, 2011, finished goods inventory balance was $31,600, and the December 31, 2011, finished goods inventory balance was $24,200. Cost of goods manufactured during the period was:

Accepted Answer

A)  $233,000 
B)  $225,600 
C)  $288,800 
D)  $240,400 
A)  $233,000 
B)  $225,600 
C)  $288,800 
D)  $240,400

Question 6

Factory overhead cost is sometimes referred to as factory burden.

Accepted Answer

A) True 
 B)False

Question 7

The cost of wages paid to employees directly involved in the manufacturing process in converting materials into finished product is classified as:

Accepted Answer

A)  factory overhead cost 
B)  direct labor cost 
C)  miscellaneous costs 
D)  direct materials cost 
A)  factory overhead cost 
B)  direct labor cost 
C)  miscellaneous costs 
D)  direct materials cost

Question 8

Period costs include:

Accepted Answer

A)  current assets on the balance sheet 
B)  current liabilities on the balance sheet 
C)  operating costs that are shown on the income statement when products are sold 
D)  operating costs that are shown on the income statement in the period in which they are incurred 
A)  current assets on the balance sheet 
B)  current liabilities on the balance sheet 
C)  operating costs that are shown on the income statement when products are sold 
D)  operating costs that are shown on the income statement in the period in which they are incurred

Question 9

Rent expense on a factory building would be treated as a(n):

Accepted Answer

A)  period cost 
B)  product cost 
C)  direct cost 
D)  both A and C are correct 
A)  period cost 
B)  product cost 
C)  direct cost 
D)  both A and C are correct

Question 10

Only the value of the inventory that is sold will appear in the income statement.

Accepted Answer

A) True 
 B)False

Question 11

Work in process inventory increased by $20,000 during 2011. Cost of goods manufactured was $180,000. Total manufacturing costs incurred in 2011 are:

Accepted Answer

A)  $198,000 
B)  $160,000 
C)  $189,000 
D)  $200,000 
A)  $198,000 
B)  $160,000 
C)  $189,000 
D)  $200,000

Question 12

The controller's staff consists of management accountants responsible for systems and procedures, general accounting, budgets, taxes, and cost accounting.

Accepted Answer

A) True 
 B)False

Question 13

Indirect labor and indirect materials would be part of factory overhead.

Accepted Answer

A) True 
 B)False

Question 14

Which one of the following will not be found on the balance sheet of a manufacturing company?

Accepted Answer

A)  cost of goods sold 
B)  materials 
C)  work in process 
D)  finished goods 
A)  cost of goods sold 
B)  materials 
C)  work in process 
D)  finished goods

Question 15

Period costs can be found in the balance sheet.

Accepted Answer

A) True 
 B)False

Question 16

Managerial accounting

Accepted Answer

A)  is prepared according to GAAP. 
B)  is prepared according to management needs. 
C)  is prepared periodically only. 
D)  is related to the entire business entity only. 
A)  is prepared according to GAAP. 
B)  is prepared according to management needs. 
C)  is prepared periodically only. 
D)  is related to the entire business entity only.

Question 17

What term is used to describe the process of monitoring operating results and comparing actual results with the expected results?

Accepted Answer

A)  Improving 
B)  Controlling 
C)  Directing 
D)  Planning 
A)  Improving 
B)  Controlling 
C)  Directing 
D)  Planning

Question 18

The cost of a manufactured product generally consists of direct materials cost, direct labor cost, and factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 19

Direct labor and direct materials are classified as:

Accepted Answer

A)  product costs and expensed when the goods are sold 
B)  product costs and expensed when incurred 
C)  period costs and expensed when incurred 
D)  period costs and expensed when the goods are sold 
A)  product costs and expensed when the goods are sold 
B)  product costs and expensed when incurred 
C)  period costs and expensed when incurred 
D)  period costs and expensed when the goods are sold

Question 20

Which of the following manufacturing costs is an indirect cost of producing a product?

Accepted Answer

A)  Oil lubricants used for factory machinery 
B)  Commissions for sales personnel 
C)  Hourly wages of an assembly worker 
D)  Memory chips for a microcomputer manufacturer 
A)  Oil lubricants used for factory machinery 
B)  Commissions for sales personnel 
C)  Hourly wages of an assembly worker 
D)  Memory chips for a microcomputer manufacturer

Exam 16: Managerial Accounting Concepts and Principles

The plant manager's salary in a manufacturing business would be considered an indirect cost.

The costs of materials and labor that do not enter directly into the finished product are classified as factory overhead.

Planning is the process of developing the company's objectives or goals and translating these objectives into courses of action.

The primary goal of managerial accounting is to provide information to:

The cost of goods sold for Heedy manufacturing in 2011 was $233,000. The January 1, 2011, finished goods inventory balance was $31,600, and the December 31, 2011, finished goods inventory balance was $24,200. Cost of goods manufactured during the period was:

Factory overhead cost is sometimes referred to as factory burden.

The cost of wages paid to employees directly involved in the manufacturing process in converting materials into finished product is classified as:

Period costs include:

Rent expense on a factory building would be treated as a(n):

Only the value of the inventory that is sold will appear in the income statement.

Work in process inventory increased by $20,000 during 2011. Cost of goods manufactured was $180,000. Total manufacturing costs incurred in 2011 are:

The controller's staff consists of management accountants responsible for systems and procedures, general accounting, budgets, taxes, and cost accounting.

Indirect labor and indirect materials would be part of factory overhead.

Which one of the following will not be found on the balance sheet of a manufacturing company?

Period costs can be found in the balance sheet.

Managerial accounting

What term is used to describe the process of monitoring operating results and comparing actual results with the expected results?

The cost of a manufactured product generally consists of direct materials cost, direct labor cost, and factory overhead cost.

Direct labor and direct materials are classified as:

Which of the following manufacturing costs is an indirect cost of producing a product?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

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