Question 1

The cost of labor that is not clearly associated with specific units or batches of product is called:

Accepted Answer

A)  Unspecified labor. 
B)  Direct labor. 
C)  Indirect labor. 
D)  Basic labor. 
E)  Joint labor. 
A)  Unspecified labor. 
B)  Direct labor. 
C)  Indirect labor. 
D)  Basic labor. 
E)  Joint labor.

Question 2

Calculate the cost of goods sold using the following information:

Accepted Answer

A)  $680,500. 
B)  $701,900. 
C)  $687,100. 
D)  $674,600. 
E)  $772,600. 
A)  $680,500. 
B)  $701,900. 
C)  $687,100. 
D)  $674,600. 
E)  $772,600.

Question 3

A mixed cost:

Accepted Answer

A)  Requires the future outlay of cash and is relevant for future decision making. 
B)  Does not change with changes in the volume of activity within the relevant range. 
C)  Is directly traceable to a cost object. 
D)  Contains a combination of fixed costs and variable costs. 
E)  Has already been incurred and cannot be avoided so it is irrelevant for decision making. 
A)  Requires the future outlay of cash and is relevant for future decision making. 
B)  Does not change with changes in the volume of activity within the relevant range. 
C)  Is directly traceable to a cost object. 
D)  Contains a combination of fixed costs and variable costs. 
E)  Has already been incurred and cannot be avoided so it is irrelevant for decision making.

Question 4

_____________________ rejects the notions of "good enough" or "acceptable" and challenges employees and managers to continuously experiment with new and improved business practices.

Accepted Answer

Continuous

Question 5

The following information is available for the year ended December 31:   The amount of raw materials used in production for the year is:

Accepted Answer

A)  $4,100. 
B)  $5,100. 
C)  $3,500. 
D)  $6,500. 
E)  $4,000. 
A)  $4,100. 
B)  $5,100. 
C)  $3,500. 
D)  $6,500. 
E)  $4,000.

Question 6

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 7

For each item shown below, classify it as a product cost or a period cost, by placing an X in the appropriate column. For each item that is a product cost, also indicate whether it is a direct cost or an indirect cost with respect to a unit of finished product.

Accepted Answer

The answer of For each item shown below, classify it...

Question 8

Managerial accounting assists in analysis, planning, and control of costs.

Accepted Answer

A) True 
 B)False

Question 9

Information for the Ace Manufacturing Company follows. Compute the cost of goods manufactured for this company.

Accepted Answer

The answer of Information for the Ace Manufacturing Company follows....

Question 10

A sunk cost has already been incurred and cannot be avoided or changed, so it is irrelevant to decision making.

Accepted Answer

A) True 
 B)False

Question 11

Current information for the Austin Company follows:   All raw materials used were traceable to specific batches of product. Austin Company's cost of goods manufactured for the year is:

Accepted Answer

A)  $125,800. 
B)  $128,600. 
C)  $131,400. 
D)  $137,000. 
E)  $139,000. 
A)  $125,800. 
B)  $128,600. 
C)  $131,400. 
D)  $137,000. 
E)  $139,000.

Question 12

___________________ is the process of setting goals and making plans to achieve them.

Accepted Answer

The answer of ___________________ is the process of setting goals...

Question 13

The main difference between the income statement of a manufacturer and a merchandiser is that the merchandiser includes cost of goods manufactured rather than cost of goods purchased.

Accepted Answer

A) True 
 B)False

Question 14

The focus of financial accounting is on an organization's projects, processes, and subdivisions, and the focus of managerial accounting is on the whole organization.

Accepted Answer

A) True 
 B)False

Question 15

A company manufactures coats in a large facility. One area in the production facility is an underused storage space. The company has twice turned down offers to lease out this facility. This situation is an example of what costing concept? How should the company handle the costing for this situation?

Accepted Answer

The situation raises an opportunity cost

Question 16

Using the information below for Talking Toys, Inc., determine the manufacturing costs incurred during the year:

Accepted Answer

A)  $13,000. 
B)  $44,500. 
C)  $57,500. 
D)  $94,500. 
E)  $89,000. 
A)  $13,000. 
B)  $44,500. 
C)  $57,500. 
D)  $94,500. 
E)  $89,000.

Question 17

The balanced scorecard aids in continuous improvement by augmenting financial measures with information on drivers or indicators of future financial performance.

Accepted Answer

A) True 
 B)False

Question 18

Using the information below for Hardy Company; determine the cost of goods manufactured during the current year:

Accepted Answer

A)  $12,000. 
B)  $16,100. 
C)  $17,100. 
D)  $18,100. 
E)  $13,600. 
A)  $12,000. 
B)  $16,100. 
C)  $17,100. 
D)  $18,100. 
E)  $13,600.

Question 19

Which of the following items appears only in a manufacturing company's financial statements?

Accepted Answer

A)  Cost of goods sold. 
B)  Cost of goods manufactured. 
C)  Goods available for sale. 
D)  Gross profit. 
E)  Net income. 
A)  Cost of goods sold. 
B)  Cost of goods manufactured. 
C)  Goods available for sale. 
D)  Gross profit. 
E)  Net income.

Question 20

Just-in-time manufacturing is a system where companies manufacture products only after the orders have been received from customers.

Accepted Answer

A) True 
 B)False

Exam 18: Managerial Accounting Concepts and Principles

The cost of labor that is not clearly associated with specific units or batches of product is called:

Calculate the cost of goods sold using the following information:

A mixed cost:

_____________________ rejects the notions of "good enough" or "acceptable" and challenges employees and managers to continuously experiment with new and improved business practices.

The following information is available for the year ended December 31: The amount of raw materials used in production for the year is:

Classifying costs by behavior involves:

For each item shown below, classify it as a product cost or a period cost, by placing an X in the appropriate column. For each item that is a product cost, also indicate whether it is a direct cost or an indirect cost with respect to a unit of finished product.

Managerial accounting assists in analysis, planning, and control of costs.

Information for the Ace Manufacturing Company follows. Compute the cost of goods manufactured for this company.

A sunk cost has already been incurred and cannot be avoided or changed, so it is irrelevant to decision making.

Current information for the Austin Company follows: All raw materials used were traceable to specific batches of product. Austin Company's cost of goods manufactured for the year is:

___________________ is the process of setting goals and making plans to achieve them.

The main difference between the income statement of a manufacturer and a merchandiser is that the merchandiser includes cost of goods manufactured rather than cost of goods purchased.

The focus of financial accounting is on an organization's projects, processes, and subdivisions, and the focus of managerial accounting is on the whole organization.

Using the information below for Talking Toys, Inc., determine the manufacturing costs incurred during the year:

The balanced scorecard aids in continuous improvement by augmenting financial measures with information on drivers or indicators of future financial performance.

Using the information below for Hardy Company; determine the cost of goods manufactured during the current year:

Which of the following items appears only in a manufacturing company's financial statements?

Just-in-time manufacturing is a system where companies manufacture products only after the orders have been received from customers.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Time Value of Money

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