Question 1

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 2

Indirect costs incurred in a manufacturing environment that cannot be traced directly to a product are treated as:

Accepted Answer

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

Question 3

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 4

A company sells goods for $150,000 that cost $60,000 to manufacture. Which statement(s) are true?

Accepted Answer

A)  The company will recognize sales on the balance sheet of $150,000. 
B)  The company will recognize $90,000 gross profit on the balance sheet. 
C)  The company will decrease finished goods by $60,000. 
D)  All of these are true. 
A)  The company will recognize sales on the balance sheet of $150,000. 
B)  The company will recognize $90,000 gross profit on the balance sheet. 
C)  The company will decrease finished goods by $60,000. 
D)  All of these are true.

Question 5

All of the following are examples of indirect labor except:

Accepted Answer

A)  maintenance personnel 
B)  janitorial personnel 
C)  machine operators 
D)  plant managers 
A)  maintenance personnel 
B)  janitorial personnel 
C)  machine operators 
D)  plant managers

Question 6

An example of a period cost is:

Accepted Answer

A)  advertising expense 
B)  indirect materials 
C)  depreciation on factory equipment 
D)  property taxes on plant facilities 
A)  advertising expense 
B)  indirect materials 
C)  depreciation on factory equipment 
D)  property taxes on plant facilities

Question 7

Which of the following is the principle reason for preparing managerial accounting reports?

Accepted Answer

A)  Usefulness to management 
B)  Cost of preparation 
C)  Clarity 
D)  GAAP 
A)  Usefulness to management 
B)  Cost of preparation 
C)  Clarity 
D)  GAAP

Question 8

The statement of cost of goods manufactured is an extension of the income statement for a manufacturing company.

Accepted Answer

A) True 
 B)False

Question 9

Goods that are partially completed by a manufacturer are referred to as:

Accepted Answer

A)  merchandise inventory 
B)  work in process inventory 
C)  finished goods inventory 
D)  materials inventory 
A)  merchandise inventory 
B)  work in process inventory 
C)  finished goods inventory 
D)  materials inventory

Question 10

Product costs are also referred to as inventoriable costs.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is an example of direct labor cost for an airplane manufacturer?

Accepted Answer

A)  Cost of oil lubricants for factory machinery 
B)  Cost of wages of assembly worker 
C)  Salary of plant supervisor 
D)  Cost of jet engines 
A)  Cost of oil lubricants for factory machinery 
B)  Cost of wages of assembly worker 
C)  Salary of plant supervisor 
D)  Cost of jet engines

Question 12

Which of the following items would not be classified as part of factory overhead?

Accepted Answer

A)  Direct labor used 
B)  Amortization of manufacturing patents 
C)  Production supervisors' salaries 
D)  Factory supplies used 
A)  Direct labor used 
B)  Amortization of manufacturing patents 
C)  Production supervisors' salaries 
D)  Factory supplies used

Question 13

Managers use managerial information to evaluate performance of a company's operation.

Accepted Answer

A) True 
 B)False

Question 14

The aspects of the management process are listed below. Match each phase to the appropriate description.
_____ Planning
_____ Directing
_____ Controlling
_____ Improving
_____ Decision making
a) Used by managers for continuous improvement
b) Managers must decide how to respond to unfavorable performances
c) Used by management to develop the organization's objectives and goals
d) Monitoring the operating results of implemented plans and comparing actual results
e) Managers run their day to day activities

Accepted Answer

The answer of The aspects of the management process are...

Question 15

Labor costs that are directly traceable to the product are part of factory overhead.

Accepted Answer

A) True 
 B)False

Question 16

Managerial accounting reports must be useful to the user of the information.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is an example of a factory overhead cost?

Accepted Answer

A)  Repair and maintenance cost on the administrative building 
B)  Factory heating and lighting cost 
C)  Insurance premiums on salespersons' automobiles 
D)  President's salary 
A)  Repair and maintenance cost on the administrative building 
B)  Factory heating and lighting cost 
C)  Insurance premiums on salespersons' automobiles 
D)  President's salary

Question 18

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

Accepted Answer

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

Question 19

What is the primary criterion for the preparation of managerial accounting reports?

Accepted Answer

A)  Relevance of the reports 
B)  Meet the manager needs 
C)  Timing of the reports 
D)  Cost of the reports 
A)  Relevance of the reports 
B)  Meet the manager needs 
C)  Timing of the reports 
D)  Cost of the reports

Question 20

The following are all product costs except:

Accepted Answer

A)  Direct materials 
B)  Sales and administrative expenses 
C)  Direct labor 
D)  Factory overhead 
A)  Direct materials 
B)  Sales and administrative expenses 
C)  Direct labor 
D)  Factory overhead

Exam 18: Managerial Accounting Concepts and Principles

Period costs include:

Indirect costs incurred in a manufacturing environment that cannot be traced directly to a product are treated as:

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

A company sells goods for $150,000 that cost $60,000 to manufacture. Which statement(s) are true?

All of the following are examples of indirect labor except:

An example of a period cost is:

Which of the following is the principle reason for preparing managerial accounting reports?

The statement of cost of goods manufactured is an extension of the income statement for a manufacturing company.

Goods that are partially completed by a manufacturer are referred to as:

Product costs are also referred to as inventoriable costs.

Which of the following is an example of direct labor cost for an airplane manufacturer?

Which of the following items would not be classified as part of factory overhead?

Managers use managerial information to evaluate performance of a company's operation.

Labor costs that are directly traceable to the product are part of factory overhead.

Managerial accounting reports must be useful to the user of the information.

Which of the following is an example of a factory overhead cost?

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

What is the primary criterion for the preparation of managerial accounting reports?

The following are all product costs except:

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