Question 1

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 2

Since there are few rules to restrict how an organization chooses to arrange its own internal data for decision making, managerial accounting provides ample opportunity for creativity and change.

Accepted Answer

A) True 
 B)False

Question 3

Control is the process of monitoring operating results and comparing actual results with the expected results.

Accepted Answer

A) True 
 B)False

Question 4

Accounting designed to meet the needs of decision-makers inside the business is referred to as:

Accepted Answer

A)  general accounting 
B)  financial accounting 
C)  managerial accounting 
D)  external accounting 
A)  general accounting 
B)  financial accounting 
C)  managerial accounting 
D)  external accounting

Question 5

Laramie Technologies had the following data:
Cost of Materials Used $50,000
Direct Labor costs $56,000
Factory Overhead $28,000
Work in Process, beg. $45,000
Work in Process, end. $32,000
Show your calculations to determine the Cost of Goods Manufactured.

Accepted Answer

$50,000 + $56,000 +

Question 6

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 7

What is the amount of Direct Materials used?

Accepted Answer

A)  $2,000 
B)  $4,000 
C)  $8,000 
D)  $14,000 
A)  $2,000 
B)  $4,000 
C)  $8,000 
D)  $14,000

Question 8

Factory overhead cost is sometimes referred to as factory burden.

Accepted Answer

A) True 
 B)False

Question 9

Work in process inventory on December 31, 2011, is $44,000. Work in process inventory increased by 60% during 2011. Cost of goods manufactured for 2011 amounts to $275,000. What are the total manufacturing costs incurred in 2011?

Accepted Answer

A)  $291,500 
B)  $302,000 
C)  $275,750 
D)  $233,750 
A)  $291,500 
B)  $302,000 
C)  $275,750 
D)  $233,750

Question 10

Period costs can be found in the balance sheet or in the income statement.

Accepted Answer

A) True 
 B)False

Question 11

Conversion cost is the combination of direct materials cost and factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 12

A staff department has no direct authority over a line department.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not a characteristic of useful managerial accounting reports?

Accepted Answer

A)  Accuracy 
B)  GAAP 
C)  historical and estimated data 
D)  reports prepared as needed 
A)  Accuracy 
B)  GAAP 
C)  historical and estimated data 
D)  reports prepared as needed

Question 14

What term is used to describe the process of developing the organization's objectives and translating those into courses of action?

Accepted Answer

A)  Supervising 
B)  Planning 
C)  Improving 
D)  Decision making 
A)  Supervising 
B)  Planning 
C)  Improving 
D)  Decision making

Question 15

Direct labor costs are included in the conversion costs of a product.

Accepted Answer

A) True 
 B)False

Question 16

Williams Company reports production costs for 2015 as follows:   Williams Company's period costs for 2015 amount to:

Accepted Answer

A)  $345,000 
B)  $250,000 
C)  $400,000 
D)  $175,000 
A)  $345,000 
B)  $250,000 
C)  $400,000 
D)  $175,000

Question 17

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

Question 18

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 19

A company used $35,000 of direct materials, incurred $73,000 in direct labor cost, and $114,000 in factory overhead costs during the period. If beginning and ending work in process inventories were $28,000 and $32,000 respectively, the cost of goods manufactured was:

Accepted Answer

A)  $218,000 
B)  $226,000 
C)  $190,000 
D)  $222,000 
A)  $218,000 
B)  $226,000 
C)  $190,000 
D)  $222,000

Question 20

Period costs include direct materials and direct labor.

Accepted Answer

A) True 
 B)False

Exam 18: Managerial Accounting Concepts and Principles

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

Since there are few rules to restrict how an organization chooses to arrange its own internal data for decision making, managerial accounting provides ample opportunity for creativity and change.

Control is the process of monitoring operating results and comparing actual results with the expected results.

Accounting designed to meet the needs of decision-makers inside the business is referred to as:

Laramie Technologies had the following data: Cost of Materials Used $50,000 Direct Labor costs $56,000 Factory Overhead $28,000 Work in Process, beg. $45,000 Work in Process, end. $32,000 Show your calculations to determine the Cost of Goods Manufactured.

Managerial accounting

What is the amount of Direct Materials used?

Factory overhead cost is sometimes referred to as factory burden.

Work in process inventory on December 31, 2011, is $44,000. Work in process inventory increased by 60% during 2011. Cost of goods manufactured for 2011 amounts to $275,000. What are the total manufacturing costs incurred in 2011?

Period costs can be found in the balance sheet or in the income statement.

Conversion cost is the combination of direct materials cost and factory overhead cost.

A staff department has no direct authority over a line department.

Which of the following is not a characteristic of useful managerial accounting reports?

What term is used to describe the process of developing the organization's objectives and translating those into courses of action?

Direct labor costs are included in the conversion costs of a product.

Williams Company reports production costs for 2015 as follows: Williams Company's period costs for 2015 amount to:

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

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

A company used $35,000 of direct materials, incurred $73,000 in direct labor cost, and $114,000 in factory overhead costs during the period. If beginning and ending work in process inventories were $28,000 and $32,000 respectively, the cost of goods manufactured was:

Period costs include direct materials and direct labor.

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