Question 1

Conversion costs are:

Accepted Answer

A)  direct material, direct labor, and manufacturing overhead. 
B)  direct material and direct labor. 
C)  direct labor and manufacturing overhead. 
D)  prime costs. 
E)  period costs. 
A)  direct material, direct labor, and manufacturing overhead. 
B)  direct material and direct labor. 
C)  direct labor and manufacturing overhead. 
D)  prime costs. 
E)  period costs.

Question 2

Which of the following is not an example of a variable cost?

Accepted Answer

A)  Straight-line depreciation on a machine that has a five-year service life. 
B)  Wages of manufacturing workers whose pay is based on hours worked. 
C)  Tires used in the production of tractors. 
D)  Aluminum used to make patio furniture. 
E)  Commissions paid to sales personnel. 
A)  Straight-line depreciation on a machine that has a five-year service life. 
B)  Wages of manufacturing workers whose pay is based on hours worked. 
C)  Tires used in the production of tractors. 
D)  Aluminum used to make patio furniture. 
E)  Commissions paid to sales personnel.

Question 3

The tuition that will be paid next semester by a college student who pursues a degree is a(n):

Accepted Answer

A)  sunk cost. 
B)  out-of-pocket cost. 
C)  indirect cost. 
D)  average cost. 
E)  marginal cost. 
A)  sunk cost. 
B)  out-of-pocket cost. 
C)  indirect cost. 
D)  average cost. 
E)  marginal cost.

Question 4

Work-in-process inventory is composed of:

Accepted Answer

A)  direct material and direct labor. 
B)  direct labor and manufacturing overhead. 
C)  direct material and manufacturing overhead. 
D)  direct material, direct labor, and manufacturing overhead. 
E)  direct material only. 
A)  direct material and direct labor. 
B)  direct labor and manufacturing overhead. 
C)  direct material and manufacturing overhead. 
D)  direct material, direct labor, and manufacturing overhead. 
E)  direct material only.

Question 5

The accounting records of Bronco Company revealed the following information: $$\begin{array} { l r } 
\text { Raw materials used } & \$ 60,000 \
\text { Direct labor } & 125,000 \
\text { Manufacturing overhead } & 360,000 \
\text { Work-in-process inventory, 1/1 } & 50,000 \
\text { Finished-goods inventory, 1/1 } & 189,000 \
\text { Work-in-process inventory, 12/31 } & 76,000 \
\text { Finished-goods inventory, } 12 / 31 & 140,000
\end{array}$$ Bronco's cost of goods manufactured is:

Accepted Answer

A)  $519,000. 
B)  $522,000. 
C)  $568,000. 
D)  $571,000. 
E)  None of the other answers are correct. 
A)  $519,000. 
B)  $522,000. 
C)  $568,000. 
D)  $571,000. 
E)  None of the other answers are correct.

Question 6

Which of the following would not be classified as a product cost?

Accepted Answer

A)  Direct materials. 
B)  Direct labor. 
C)  Indirect materials. 
D)  Insurance on a manufacturing plant. 
E)  Sales commissions. 
A)  Direct materials. 
B)  Direct labor. 
C)  Indirect materials. 
D)  Insurance on a manufacturing plant. 
E)  Sales commissions.

Question 7

Baxter Company, which pays a 10% commission to its salespeople, reported sales revenues of $210,000 for the period just ended. If fixed and variable sales expenses totaled $56,000, what would these expenses total at sales of $168,000?

Accepted Answer

A)  $16,800. 
B)  $35,000. 
C)  $44,800. 
D)  $51,800. 
E)  None of the other answers are correct. 
A)  $16,800. 
B)  $35,000. 
C)  $44,800. 
D)  $51,800. 
E)  None of the other answers are correct.

Question 8

Which of the following would not be characterized as a cost object?

Accepted Answer

A)  An automobile manufactured by General Motors. 
B)  The New York Fire Department. 
C)  A Burger King restaurant located in Cleveland, Ohio. 
D)  A Delta Airlines flight from Atlanta to Miami. 
E)  All of these are examples of cost objects. 
A)  An automobile manufactured by General Motors. 
B)  The New York Fire Department. 
C)  A Burger King restaurant located in Cleveland, Ohio. 
D)  A Delta Airlines flight from Atlanta to Miami. 
E)  All of these are examples of cost objects.

Question 9

Carolina Plating Company reported a cost of goods manufactured of $520,000, with the firm's year-end balance sheet revealing work in process and finished goods of $70,000 and $134,000, respectively. If supplemental information disclosed raw materials used in production of $80,000, direct labor of $140,000, and manufacturing overhead of $240,000, the company's beginning work in process must have been:

Accepted Answer

A)  $130,000. 
B)  $10,000. 
C)  $66,000. 
D)  $390,000. 
E)  None of the other answers are correct. 
A)  $130,000. 
B)  $10,000. 
C)  $66,000. 
D)  $390,000. 
E)  None of the other answers are correct.

Question 10

Which of the following would likely be a suitable cost driver for the amount of direct materials used?

Accepted Answer

A)  The number of units sold. 
B)  The number of direct labor hours worked. 
C)  The number of machine hours worked. 
D)  The number of units produced. 
E)  The number of employees working in the factory. 
A)  The number of units sold. 
B)  The number of direct labor hours worked. 
C)  The number of machine hours worked. 
D)  The number of units produced. 
E)  The number of employees working in the factory.

Question 11

Holden Industries began July with a finished-goods inventory of $48,000. The finished-goods inventory at the end of July was $56,000 and the cost of goods sold during the month was $125,000. The cost of goods manufactured during July was:

Accepted Answer

A)  $104,000. 
B)  $125,000. 
C)  $117,000. 
D)  $133,000. 
E)  None of the other answers are correct. 
A)  $104,000. 
B)  $125,000. 
C)  $117,000. 
D)  $133,000. 
E)  None of the other answers are correct.

Question 12

Which of the following employees of a commercial printer/publisher would be classified as direct labor?

Accepted Answer

A)  Book binder. 
B)  Plant security guard. 
C)  Sales representative. 
D)  Plant supervisor. 
E)  Payroll supervisor. 
A)  Book binder. 
B)  Plant security guard. 
C)  Sales representative. 
D)  Plant supervisor. 
E)  Payroll supervisor.

Question 13

Which of the following employees would not be classified as indirect labor?

Accepted Answer

A)  Plant Custodian. 
B)  Salesperson. 
C)  Assembler of wooden furniture. 
D)  Plant security guard. 
E)  Salesperson and assembler of wooden furniture. 
A)  Plant Custodian. 
B)  Salesperson. 
C)  Assembler of wooden furniture. 
D)  Plant security guard. 
E)  Salesperson and assembler of wooden furniture.

Question 14

The Perez Company recorded the following transactions for February 20x1:   
Sales were $560,000, with sales prices determined by adding a 40% markup to the firm's manufacturing cost. The total cost of direct materials used, direct labor, and manufacturing overhead during the month was $285,000.
Note: The materials account includes both direct materials and indirect materials.
Required:
Calculate the missing values.

Accepted Answer

The answer of The Perez Company recorded the following transactions...

Question 15

Consider the following cost items:
1. Sales commissions earned by a company's sales force.
2. Raw materials purchased during the period.
3. Current year's depreciation on a firm's manufacturing facilities.
4. Year-end completed production of a carpet manufacturer.
5. The cost of products sold to customers of an apparel store.
6. Wages earned by machine operators in a manufacturing plant.
7. Income taxes incurred by an airline.
8. Marketing costs of an electronics manufacturer.
9. Indirect labor costs incurred by a manufacturer of office equipment.
Required:
A. Evaluate the costs just cited and determine whether the associated dollar amounts would appear on the firm's balance sheet, income statement, or schedule of cost of goods manufactured.
B. What major asset will normally be insignificant for service enterprises and relatively substantial for retailers, wholesalers, and manufacturers? Briefly discuss.
C. Briefly explain the similarity and difference between the merchandise inventory of a retailer and the finished-goods inventory of a manufacturer.

Accepted Answer

A.
1. Income statement
2. Schedule of co

Question 16

In a manufacturing company, the cost of goods completed during the period would include which of the following elements?

Accepted Answer

A)  Raw materials used. 
B)  Beginning finished goods inventory. 
C)  Marketing costs. 
D)  Depreciation of delivery trucks. 
E)  All of the other answers are correct. 
A)  Raw materials used. 
B)  Beginning finished goods inventory. 
C)  Marketing costs. 
D)  Depreciation of delivery trucks. 
E)  All of the other answers are correct.

Question 17

Indirect costs:

Accepted Answer

A)  can be traced to a cost object. 
B)  cannot be traced to a particular cost object. 
C)  are not important. 
D)  are always variable costs. 
E)  may be indirect with respect to Disney World but direct with respect to one of its major components, Epcot Center. 
A)  can be traced to a cost object. 
B)  cannot be traced to a particular cost object. 
C)  are not important. 
D)  are always variable costs. 
E)  may be indirect with respect to Disney World but direct with respect to one of its major components, Epcot Center.

Question 18

Yang Corporation recently computed total product costs of $567,000 and total period costs of $420,000, excluding $35,000 of sales commissions that were overlooked by the company's administrative assistant. On the basis of this information, Yang's income statement should reveal operating expenses of:

Accepted Answer

A)  $35,000. 
B)  $420,000. 
C)  $455,000. 
D)  $567,000. 
E)  $602,000. 
A)  $35,000. 
B)  $420,000. 
C)  $455,000. 
D)  $567,000. 
E)  $602,000.

Question 19

Glass Industries reported the following data for the year just ended: sales revenue, $1,750,000; cost of goods sold, $980,000; cost of goods manufactured, $560,000; and selling and administrative expenses, $170,000. Glass' gross margin would be:

Accepted Answer

A)  $940,000. 
B)  $1,190,000. 
C)  $1,020,000. 
D)  $380,000. 
E)  $770,000. 
A)  $940,000. 
B)  $1,190,000. 
C)  $1,020,000. 
D)  $380,000. 
E)  $770,000.

Question 20

Which of the following inventories would a discount retailer such as Wal-Mart report as an asset?

Accepted Answer

A)  Raw materials. 
B)  Work in process. 
C)  Finished goods. 
D)  Merchandise inventory. 
E)  All of the other answers are correct. 
A)  Raw materials. 
B)  Work in process. 
C)  Finished goods. 
D)  Merchandise inventory. 
E)  All of the other answers are correct.

Conversion costs are:

Which of the following is not an example of a variable cost?

The tuition that will be paid next semester by a college student who pursues a degree is a(n):

Work-in-process inventory is composed of:

Which of the following would not be classified as a product cost?

Baxter Company, which pays a 10% commission to its salespeople, reported sales revenues of $210,000 for the period just ended. If fixed and variable sales expenses totaled $56,000, what would these expenses total at sales of $168,000?

Which of the following would not be characterized as a cost object?

Which of the following would likely be a suitable cost driver for the amount of direct materials used?

Holden Industries began July with a finished-goods inventory of $48,000. The finished-goods inventory at the end of July was $56,000 and the cost of goods sold during the month was $125,000. The cost of goods manufactured during July was:

Which of the following employees of a commercial printer/publisher would be classified as direct labor?

Which of the following employees would not be classified as indirect labor?

In a manufacturing company, the cost of goods completed during the period would include which of the following elements?

Indirect costs:

Yang Corporation recently computed total product costs of $567,000 and total period costs of $420,000, excluding $35,000 of sales commissions that were overlooked by the company's administrative assistant. On the basis of this information, Yang's income statement should reveal operating expenses of:

Glass Industries reported the following data for the year just ended: sales revenue, $1,750,000; cost of goods sold, $980,000; cost of goods manufactured, $560,000; and selling and administrative expenses, $170,000. Glass' gross margin would be:

Which of the following inventories would a discount retailer such as Wal-Mart report as an asset?

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis, Cost Behavior, and Cost Estimation

Cost-Volume-Profit Analysis

Variable Costing and the Costs of Quality and Sustainability

Financial Planning and Analysis: the Master Budget

Standard Costing and Analysis of Direct Costs

Flexible Budgeting and Analysis of Overhead Costs

Responsibility Accounting, Operational Performance Measures, and the Balanced Scorecard

Investment Centers and Transfer Pricing

Decision Making: Relevant Costs and Benefits

Target Costing and Cost Analysis for Pricing Decisions

Capital Expenditure Decisions

Allocation of Support Activity Costs and Joint Costs

The Sarbanes-Oxley Act, Internal Controls, and Management Accounting

Compound Interest and the Concept of Present Value

Inventory Management

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Exam 2: Basic Cost Management Concepts

Conversion costs are:

Which of the following is not an example of a variable cost?

The tuition that will be paid next semester by a college student who pursues a degree is a(n):

Work-in-process inventory is composed of:

Which of the following would not be classified as a product cost?

Baxter Company, which pays a 10% commission to its salespeople, reported sales revenues of $210,000 for the period just ended. If fixed and variable sales expenses totaled $56,000, what would these expenses total at sales of $168,000?

Which of the following would not be characterized as a cost object?

Which of the following would likely be a suitable cost driver for the amount of direct materials used?

Holden Industries began July with a finished-goods inventory of $48,000. The finished-goods inventory at the end of July was $56,000 and the cost of goods sold during the month was $125,000. The cost of goods manufactured during July was:

Which of the following employees of a commercial printer/publisher would be classified as direct labor?

Which of the following employees would not be classified as indirect labor?

In a manufacturing company, the cost of goods completed during the period would include which of the following elements?

Indirect costs:

Glass Industries reported the following data for the year just ended: sales revenue, $1,750,000; cost of goods sold, $980,000; cost of goods manufactured, $560,000; and selling and administrative expenses, $170,000. Glass' gross margin would be:

Which of the following inventories would a discount retailer such as Wal-Mart report as an asset?

The Changing Role of Managerial Accounting in a Dynamic Business Environment

Product Costing and Cost Accumulation in a Batch Production Environment

Process Costing and Hybrid Product-Costing Systems

Activity-Based Costing and Management

Activity Analysis, Cost Behavior, and Cost Estimation

Cost-Volume-Profit Analysis

Variable Costing and the Costs of Quality and Sustainability

Financial Planning and Analysis: the Master Budget

Standard Costing and Analysis of Direct Costs

Flexible Budgeting and Analysis of Overhead Costs

Responsibility Accounting, Operational Performance Measures, and the Balanced Scorecard

Investment Centers and Transfer Pricing

Decision Making: Relevant Costs and Benefits

Target Costing and Cost Analysis for Pricing Decisions

Capital Expenditure Decisions

Allocation of Support Activity Costs and Joint Costs

The Sarbanes-Oxley Act, Internal Controls, and Management Accounting

Compound Interest and the Concept of Present Value

Inventory Management

Filters