Question 1

Prime costs consist of factory overhead and direct labor.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following accounts will be found on the income statement?

Accepted Answer

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

Question 3

Beginning work in process is equal to:

Accepted Answer

A)  cost of goods manufactured plus ending work in process minus manufacturing costs incurred during the current period 
B)  cost of goods manufactured minus ending work in process plus manufacturing costs incurred during the current period 
C)  ending work in process plus manufacturing costs incurred during the current period 
D)  manufacturing costs incurred during the current period minus ending work in process 
A)  cost of goods manufactured plus ending work in process minus manufacturing costs incurred during the current period 
B)  cost of goods manufactured minus ending work in process plus manufacturing costs incurred during the current period 
C)  ending work in process plus manufacturing costs incurred during the current period 
D)  manufacturing costs incurred during the current period minus ending work in process

Question 4

Managerial accounting information includes both historical and estimated data.

Accepted Answer

A) True 
 B)False

Question 5

Identify the following costs as a (a) product cost or (b) period cost for a cake factory.
1. _____ Frosting
2. _____ Baker's wages
3. _____ Advertising fees
4. _____ Transportation out

Accepted Answer

The answer of Identify the following costs as a (a)...

Question 6

Cost of oil used to lubricate factory machinery and equipment is an example of a direct materials cost.

Accepted Answer

A) True 
 B)False

Question 7

Classify the following costs as direct, indirect, or neither:

Accepted Answer

a) indirect
b) indirect
c) ind

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

In the income statement of a manufacturing company, what replaces purchases in the cost of goods section of a retail company?

Accepted Answer

A)  Finished goods 
B)  Cost of merchandise available 
C)  Cost of goods manufactured 
D)  Work in process completed 
A)  Finished goods 
B)  Cost of merchandise available 
C)  Cost of goods manufactured 
D)  Work in process completed

Question 10

Direct costs can be specifically traced to a cost object.

Accepted Answer

A) True 
 B)False

Question 11

Accounting is an information system that provides essential data about the economic activities of an entity to various users to aid them in making informed judgments and decisions.

Accepted Answer

A) True 
 B)False

Question 12

Prime costs are the combination of direct labor costs and factory overhead costs.

Accepted Answer

A) True 
 B)False

Question 13

A diagram of the operating structure of an organization is called an organization chart.

Accepted Answer

A) True 
 B)False

Question 14

Cost of goods sold for a manufacturer equals cost of goods manufactured plus:

Accepted Answer

A)  beginning work in process inventory less ending work in process inventory 
B)  ending work in process inventory less beginning work in process inventory 
C)  beginning finished goods inventory less ending finished goods inventory 
D)  ending finished goods inventory less beginning finished goods inventory 
A)  beginning work in process inventory less ending work in process inventory 
B)  ending work in process inventory less beginning work in process inventory 
C)  beginning finished goods inventory less ending finished goods inventory 
D)  ending finished goods inventory less beginning finished goods inventory

Question 15

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 16

Managerial accounting provides useful information to managers on product costs.

Accepted Answer

A) True 
 B)False

Question 17

If the cost of direct materials is a small portion of total production cost, it may be classified as part of:

Accepted Answer

A)  direct labor cost 
B)  selling and administrative costs 
C)  miscellaneous costs 
D)  factory overhead cost 
A)  direct labor cost 
B)  selling and administrative costs 
C)  miscellaneous costs 
D)  factory overhead cost

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Product costs include direct labor and advertising expense.

Accepted Answer

A) True 
 B)False

Question 20

Rosalba Manufacturing Company had the following account balance for 2012:
   Collections on account were $625,000 in 2012.
Cost of goods sold was 68% of sales.
Direct materials purchased amounted to $90,000.
Factory overhead was 300% of the cost of direct labor.
Compute:
a) sales revenue (all sales were on account)
b) cost of goods sold
c) cost of goods manufactured
d) direct labor incurred
e) direct materials used
f) factory overhead incurred

Accepted Answer

a) $33,000 + $625,000 - $27,000 = $631,0

Exam 18: Managerial Accounting Concepts and Principles

Prime costs consist of factory overhead and direct labor.

Which of the following accounts will be found on the income statement?

Beginning work in process is equal to:

Managerial accounting information includes both historical and estimated data.

Identify the following costs as a (a) product cost or (b) period cost for a cake factory. 1. _____ Frosting 2. _____ Baker's wages 3. _____ Advertising fees 4. _____ Transportation out

Cost of oil used to lubricate factory machinery and equipment is an example of a direct materials cost.

Classify the following costs as direct, indirect, or neither:

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

In the income statement of a manufacturing company, what replaces purchases in the cost of goods section of a retail company?

Direct costs can be specifically traced to a cost object.

Accounting is an information system that provides essential data about the economic activities of an entity to various users to aid them in making informed judgments and decisions.

Prime costs are the combination of direct labor costs and factory overhead costs.

A diagram of the operating structure of an organization is called an organization chart.

Cost of goods sold for a manufacturer equals cost of goods manufactured plus:

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

Managerial accounting provides useful information to managers on product costs.

If the cost of direct materials is a small portion of total production cost, it may be classified as part of:

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

Product costs include direct labor and advertising expense.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

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

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Filters

Identify the following costs as a (a) product cost or (b) period cost for a cake factory. 1. ___ Frosting 2. _ Baker's wages 3. _ Advertising fees 4. ___ Transportation out