Question 1

How does fraud affect managerial accounting?

Accepted Answer

Fraud increases a business' co

Question 2

Costs classified by controllability are useful for:

Accepted Answer

A)  The balance sheet. 
B)  The income statement. 
C)  The budgeting process. 
D)  Evaluation reports. 
E)  Determining product cost. 
A)  The balance sheet. 
B)  The income statement. 
C)  The budgeting process. 
D)  Evaluation reports. 
E)  Determining product cost.

Question 3

Product costs can be classified as one of three types: direct materials, direct labor, or overhead.

Accepted Answer

A) True 
 B)False

Question 4

Direct costs are incurred for the benefit of more than one cost object.

Accepted Answer

A) True 
 B)False

Question 5

________________________ is an activity that provides financial and nonfinancial information to an organization's managers and other internal decision makers.

Accepted Answer

Managerial

Question 6

Raw materials inventory includes only direct materials.

Accepted Answer

A) True 
 B)False

Question 7

One difference between financial and managerial accounting is that the external users that use financial information must plan a company's future, but the internal users of managerial accounting information generally must decide whether to invest in or lend to a company.

Accepted Answer

A) True 
 B)False

Question 8

_____________________ inventory consists of goods a company acquires to use in making products.

Accepted Answer

The answer of _____________________ inventory consists of goods a company...

Question 9

A company produces work boots. The company received and produced an order for 3,000 pairs of boots. The following information is available regarding this order. 
$$\begin{array} { l l } 
\text { Process time } & 3.3 \text { days } \
\text { Inspection time. } & 4.9 \text { days } \
\text { Move time } & 4.7 \text { days } \
\text { Wait time } & 9.1 \text { days }
\end{array}$$
What is this company's manufacturing cycle efficiency?

Accepted Answer

A)  22 days. 
B)  5.5 days 
C)  22.27% 
D)  15% 
E)  21.4% 
A)  22 days. 
B)  5.5 days 
C)  22.27% 
D)  15% 
E)  21.4%

Question 10

Classifying costs by behavior involves:

Accepted Answer

A)  Identifying fixed cost and variable cost. 
B)  Identifying cost of goods sold and operating costs. 
C)  Identifying all costs. 
D)  Identifying costs in a physical manner. 
E)  Identifying both quantitative and qualitative cost factors. 
A)  Identifying fixed cost and variable cost. 
B)  Identifying cost of goods sold and operating costs. 
C)  Identifying all costs. 
D)  Identifying costs in a physical manner. 
E)  Identifying both quantitative and qualitative cost factors.

Question 11

An _____________________ cost requires the future outlay of cash and is relevant for decision making.

Accepted Answer

The answer of An _____________________ cost requires the future outlay...

Question 12

A manufacturing statement is also known as a schedule or listing of the:

Accepted Answer

A)  Raw materials processed. 
B)  Factory supplies used. 
C)  Cost of goods manufactured. 
D)  Total finished goods. 
E)  Cost of goods sold. 
A)  Raw materials processed. 
B)  Factory supplies used. 
C)  Cost of goods manufactured. 
D)  Total finished goods. 
E)  Cost of goods sold.

Question 13

Use the following information for Hayes, Inc., as of December 31 to answer the next questions:
$\begin{array}{lr}
\text { Administrative salaries } & \$ 32,000 \
\text { Depreciation of factory equipment } & 25,000 \
\text { Depreciation of delivery vehicles } & 8,000 \
\text { Direct labor } & 68,000 \
\text { Factory supplies used } & 12,000 \
\text { Finished goods inventory, January 1 } & 57,000 \
\text { Finished goods inventory, December 31 } & 68,000 \
\text { Factory insurance } & 15,500\\text { Interest expense } & 12,000 \
\text { Factory utilities } & 14,000 \
\text { Factory maintenance } & 7,500 \
\text { Raw materials inventory, January 1 } & 8,000 \
\text { Raw materials inventory, December 31 } & 4,000 \
\text { Raw material purchases } & 125,000 \
\text { Rent on factory building } & 25,000 \
\text { Repairs of factory equipment } & 11,500 \
\text { Sales commissions } & 37,500 \
\text { Goods in process inventory, January 1 } & 3,500 \
\text { Goods in process inventory, December 31 } & 2,000
\end{array}$
-What is the correct amount of Cost of Goods Manufactured based on the Hayes, Inc. information?

Accepted Answer

A)  $398,500. 
B)  $386,000. 
C)  $309,000. 
D)  $306,000. 
E)  $296,500. 
A)  $398,500. 
B)  $386,000. 
C)  $309,000. 
D)  $306,000. 
E)  $296,500.

Question 14

The following information is available for Talking Toys, Inc. for the current year:
$$\begin{array} { l r } 
\text { Direct materials used } & \$ 12,500 \
\text { Goods in process, January 1 } & 50,000 \
\text { Goods in process, December 31 } & 37,000 \
\text { Total Factory overhead } & 5,500 \
\text { Direct labor used } & 26,500
\end{array}$$
-The total cost of goods manufactured for the year was:

Accepted Answer

A)  $13,000 
B)  $44,500 
C)  $57,500 
D)  $94,500. 
E)  $52,000 
A)  $13,000 
B)  $44,500 
C)  $57,500 
D)  $94,500. 
E)  $52,000

Question 15

Use the following information for Hayes, Inc., as of December 31 to answer the next questions:
$\begin{array}{lr}
\text { Administrative salaries } & \$ 32,000 \
\text { Depreciation of factory equipment } & 25,000 \
\text { Depreciation of delivery vehicles } & 8,000 \
\text { Direct labor } & 68,000 \
\text { Factory supplies used } & 12,000 \
\text { Finished goods inventory, January 1 } & 57,000 \
\text { Finished goods inventory, December 31 } & 68,000 \
\text { Factory insurance } & 15,500\\text { Interest expense } & 12,000 \
\text { Factory utilities } & 14,000 \
\text { Factory maintenance } & 7,500 \
\text { Raw materials inventory, January 1 } & 8,000 \
\text { Raw materials inventory, December 31 } & 4,000 \
\text { Raw material purchases } & 125,000 \
\text { Rent on factory building } & 25,000 \
\text { Repairs of factory equipment } & 11,500 \
\text { Sales commissions } & 37,500 \
\text { Goods in process inventory, January 1 } & 3,500 \
\text { Goods in process inventory, December 31 } & 2,000
\end{array}$
-What is the correct amount of overhead based on the Hayes Inc. information?

Accepted Answer

A)  $192,000. 
B)  $110,500. 
C)  $200,000. 
D)  $150,000. 
E)  $77,500. 
A)  $192,000. 
B)  $110,500. 
C)  $200,000. 
D)  $150,000. 
E)  $77,500.

Question 16

A direct cost is a cost that is:

Accepted Answer

A)  Identifiable as controllable. 
B)  Variable with respect to the volume of activity. 
C)  Fixed with respect to the volume of activity. 
D)  Traceable to a cost object. 
E)  Sunk with respect to a cost object. 
A)  Identifiable as controllable. 
B)  Variable with respect to the volume of activity. 
C)  Fixed with respect to the volume of activity. 
D)  Traceable to a cost object. 
E)  Sunk with respect to a cost object.

Question 17

Which of the following statements regarding fraud is (are) true?

Accepted Answer

A)  Fraud is a deliberate act. 
B)  Fraud can be deliberate or unintentional; the outcome of the act determines if fraud exists. 
C)  A company with a strong code of ethics can eliminate fraud. 
D)  A company with strong internal controls can eliminate fraud. 
E)  The most common type of fraud is financial statement fraud. 
A)  Fraud is a deliberate act. 
B)  Fraud can be deliberate or unintentional; the outcome of the act determines if fraud exists. 
C)  A company with a strong code of ethics can eliminate fraud. 
D)  A company with strong internal controls can eliminate fraud. 
E)  The most common type of fraud is financial statement fraud.

Question 18

Which of the following is not a characteristic of all fraud?

Accepted Answer

A)  It is done to provide direct or indirect benefit to the employee. 
B)  It violates the employee's duties to his employer. 
C)  It costs the employer money. 
D)  It is secret. 
E)  Can be intentional or unintentional. 
A)  It is done to provide direct or indirect benefit to the employee. 
B)  It violates the employee's duties to his employer. 
C)  It costs the employer money. 
D)  It is secret. 
E)  Can be intentional or unintentional.

Question 19

Product costs:

Accepted Answer

A)  Are expenditures necessary and integral to finished products. 
B)  Are expenditures identified more with a time period rather than with finished products. 
C)  Include selling and administrative expenses. 
D)  Are costs that vary with the volume of activity. 
E)  Are costs that do not vary with the volume of activity. 
A)  Are expenditures necessary and integral to finished products. 
B)  Are expenditures identified more with a time period rather than with finished products. 
C)  Include selling and administrative expenses. 
D)  Are costs that vary with the volume of activity. 
E)  Are costs that do not vary with the volume of activity.

Question 20

Use the following information to compute the total manufacturing costs incurred during the period:
$$\begin{array} { l r } 
\text { Beginning raw materials } & \$ 5,500 \
\text { Ending raw materials } & 4,000 \
\text { Direct labor } & 12,250 \
\text { Raw material purchases } & 7,400 \
\text { Depreciation on factory equipment } & 6,500 \
\text { Factory repairs and maintenance } & 3,300 \
\text { Beginning finished goods inventory } & 10,200 \
\text { Ending finished goods inventory } & 8,900 \
\text { Beginning goods in process inventory } & 5,700 \
\text { Ending goods in process inventory } & 6,300
\end{array}$$

Accepted Answer

A)  $36,650 
B)  $30,950 
C)  $30,650 
D)  $30,350 
E)  $31,650 
A)  $36,650 
B)  $30,950 
C)  $30,650 
D)  $30,350 
E)  $31,650

Exam 14: Managerial Accounting Concepts and Principles

How does fraud affect managerial accounting?

Costs classified by controllability are useful for:

Product costs can be classified as one of three types: direct materials, direct labor, or overhead.

Direct costs are incurred for the benefit of more than one cost object.

________________________ is an activity that provides financial and nonfinancial information to an organization's managers and other internal decision makers.

Raw materials inventory includes only direct materials.

One difference between financial and managerial accounting is that the external users that use financial information must plan a company's future, but the internal users of managerial accounting information generally must decide whether to invest in or lend to a company.

_____________________ inventory consists of goods a company acquires to use in making products.

Classifying costs by behavior involves:

An _____________________ cost requires the future outlay of cash and is relevant for decision making.

A manufacturing statement is also known as a schedule or listing of the:

The following information is available for Talking Toys, Inc. for the current year: Direct materials used \ 12,500 Goods in process, January 1 50,000 Goods in process, December 31 37,000 Total Factory overhead 5,500 Direct labor used 26,500 -The total cost of goods manufactured for the year was:

A direct cost is a cost that is:

Which of the following statements regarding fraud is (are) true?

Which of the following is not a characteristic of all fraud?

Product costs:

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash and Internal Controls

Accounts and Notes Receivable

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Corporate Reporting and Analysis

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costing

Decentralization and Performance Evaluation

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Investments and International Operations

Accounting for Partnerships

Appendix : Accounting With Special Journals

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