Question 1

List the four goals of an internal control system.

Accepted Answer

An internal control system is the polici

Question 2

Total manufacturing costs incurred during the year do not include:

Accepted Answer

A)  Direct materials used. 
B)  Factory supplies used. 
C)  Goods in process inventory, beginning balance. 
D)  Direct labor. 
E)  Depreciation of machinery. 
A)  Direct materials used. 
B)  Factory supplies used. 
C)  Goods in process inventory, beginning balance. 
D)  Direct labor. 
E)  Depreciation of machinery.

Question 3

Which of the following accounts would all appear on a manufacturing statement?

Accepted Answer

A)  Raw materials, factory insurance expired, indirect labor. 
B)  Raw materials, goods in process, finished goods. 
C)  Factory buildings, delivery equipment, and depreciation on factory equipment. 
D)  Direct labor, indirect labor, sales salaries. 
E)  Direct labor, factory repairs and maintenance, wages payable. 
A)  Raw materials, factory insurance expired, indirect labor. 
B)  Raw materials, goods in process, finished goods. 
C)  Factory buildings, delivery equipment, and depreciation on factory equipment. 
D)  Direct labor, indirect labor, sales salaries. 
E)  Direct labor, factory repairs and maintenance, wages payable.

Question 4

Continuous improvement:

Accepted Answer

A)  Is a measure of profits. 
B)  Is a measure of costs. 
C)  Rejects the notion of "good enough." 
D)  Is not applicable to most businesses. 
E)  Is possible only in service businesses. 
A)  Is a measure of profits. 
B)  Is a measure of costs. 
C)  Rejects the notion of "good enough." 
D)  Is not applicable to most businesses. 
E)  Is possible only in service businesses.

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

A primary difference between variable costs and fixed costs is:

Accepted Answer

A)  Variable costs per unit change in varying increments while fixed costs per unit change in equal increments over the relevant range of activity. 
B)  Variable costs per unit fluctuate and fixed costs per unit remain constant over the relevant range of activity. 
C)  Variable costs per unit are fixed and fixed costs per unit are variable over the relevant range of activity. 
D)  Variable costs per unit change in equal increments while total fixed costs change in proportion to the level of activity over the company's relevant range. 
E)  Total variable costs are fixed and fixed costs per unit never change over the relevant range of activity. 
A)  Variable costs per unit change in varying increments while fixed costs per unit change in equal increments over the relevant range of activity. 
B)  Variable costs per unit fluctuate and fixed costs per unit remain constant over the relevant range of activity. 
C)  Variable costs per unit are fixed and fixed costs per unit are variable over the relevant range of activity. 
D)  Variable costs per unit change in equal increments while total fixed costs change in proportion to the level of activity over the company's relevant range. 
E)  Total variable costs are fixed and fixed costs per unit never change over the relevant range of activity.

Question 7

The main goal of the lean business model is the elimination of waste while satisfying the customer and providing a positive return to the company.

Accepted Answer

A) True 
 B)False

Question 8

Both financial and managerial accounting report monetary information; managerial accounting also reports considerable nonmonetary information.

Accepted Answer

A) True 
 B)False

Question 9

Choosing to outsource a component of a product or manufacture it internally is an example of a(n):

Accepted Answer

A)  Opportunity cost. 
B)  Sunk cost. 
C)  Out-of-pocket cost. 
D)  Period cost. 
E)  Fixed cost. 
A)  Opportunity cost. 
B)  Sunk cost. 
C)  Out-of-pocket cost. 
D)  Period cost. 
E)  Fixed cost.

Question 10

A manufacturing firm's cost of goods manufactured is equivalent to a merchandising firm's:

Accepted Answer

A)  Cost of goods sold. 
B)  Cost of goods purchased. 
C)  Cost of goods available. 
D)  Beginning merchandise inventory. 
E)  Ending merchandise inventory. 
A)  Cost of goods sold. 
B)  Cost of goods purchased. 
C)  Cost of goods available. 
D)  Beginning merchandise inventory. 
E)  Ending merchandise inventory.

Question 11

Raw materials that physically become part of the product and can be traced to specific units or batches of product are called:

Accepted Answer

A)  Raw materials sold. 
B)  Chargeable materials. 
C)  Goods in process. 
D)  Indirect materials. 
E)  Direct materials. 
A)  Raw materials sold. 
B)  Chargeable materials. 
C)  Goods in process. 
D)  Indirect materials. 
E)  Direct materials.

Question 12

A manufacturing company's finished goods inventory on January 1 was $68,000; cost of goods manufactured was $147,000; and the December 31 finished goods inventory was $77,000. What is the cost of goods sold for that year?

Accepted Answer

The answer of A manufacturing company's finished goods inventory on...

Question 13

Using the information below, compute the cycle efficiency:

Accepted Answer

A)  93.8%. 
B)  81.3%. 
C)  100.0%. 
D)  75.0%. 
E)  88.8%. 
A)  93.8%. 
B)  81.3%. 
C)  100.0%. 
D)  75.0%. 
E)  88.8%.

Question 14

Costs that flow directly to the current income statement are called:

Accepted Answer

A)  Period costs. 
B)  Product costs. 
C)  General costs. 
D)  Balance sheet costs. 
E)  Capitalized costs. 
A)  Period costs. 
B)  Product costs. 
C)  General costs. 
D)  Balance sheet costs. 
E)  Capitalized costs.

Question 15

Which of the following is never included in direct materials costs?

Accepted Answer

A)  Invoice costs of direct materials. 
B)  Outgoing delivery charges. 
C)  Materials storage costs. 
D)  Materials handling costs. 
E)  All of these are direct material costs. 
A)  Invoice costs of direct materials. 
B)  Outgoing delivery charges. 
C)  Materials storage costs. 
D)  Materials handling costs. 
E)  All of these are direct material costs.

Question 16

Which of the following statements is correct concerning the elements of cycle time?

Accepted Answer

A)  Move time is the time spent moving (1) raw materials from storage to production and (2) goods in process from factory location to another factory location. 
B)  Inspection time is the time spent producing the product. 
C)  Process time is considered non-value-added time. 
D)  Wait time is considered value-added time. 
E)  Cycle efficiency is the ratio of non-value-added time to total cycle time. 
A)  Move time is the time spent moving (1) raw materials from storage to production and (2) goods in process from factory location to another factory location. 
B)  Inspection time is the time spent producing the product. 
C)  Process time is considered non-value-added time. 
D)  Wait time is considered value-added time. 
E)  Cycle efficiency is the ratio of non-value-added time to total cycle time.

Question 17

Managerial accounting is different from financial accounting in that

Accepted Answer

A)  Managerial accounting is more focused on the organization as a whole and financial accounting is more focused on subdivisions of the organization. 
B)  Managerial accounting never includes nonmonetary information. 
C)  Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions. 
D)  Managerial accounting is used extensively by investors, whereas financial accounting is used only by creditors. 
E)  Managerial accounting is mainly used to set stock prices. 
A)  Managerial accounting is more focused on the organization as a whole and financial accounting is more focused on subdivisions of the organization. 
B)  Managerial accounting never includes nonmonetary information. 
C)  Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions. 
D)  Managerial accounting is used extensively by investors, whereas financial accounting is used only by creditors. 
E)  Managerial accounting is mainly used to set stock prices.

Question 18

Costs that are first assigned to inventory are called:

Accepted Answer

A)  Period costs. 
B)  Product costs. 
C)  General costs. 
D)  Administrative costs. 
E)  Fixed costs. 
A)  Period costs. 
B)  Product costs. 
C)  General costs. 
D)  Administrative costs. 
E)  Fixed costs.

Question 19

Expenditures incurred in the process of converting raw materials to finished goods, that include direct labor and factory overhead are known as ______________________.

Accepted Answer

The answer of Expenditures incurred in the process of converting...

Question 20

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.

Exam 18: Managerial Accounting Concepts and Principles

List the four goals of an internal control system.

Total manufacturing costs incurred during the year do not include:

Which of the following accounts would all appear on a manufacturing statement?

Continuous improvement:

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

A primary difference between variable costs and fixed costs is:

The main goal of the lean business model is the elimination of waste while satisfying the customer and providing a positive return to the company.

Both financial and managerial accounting report monetary information; managerial accounting also reports considerable nonmonetary information.

Choosing to outsource a component of a product or manufacture it internally is an example of a(n):

A manufacturing firm's cost of goods manufactured is equivalent to a merchandising firm's:

Raw materials that physically become part of the product and can be traced to specific units or batches of product are called:

A manufacturing company's finished goods inventory on January 1 was $68,000; cost of goods manufactured was $147,000; and the December 31 finished goods inventory was $77,000. What is the cost of goods sold for that year?

Using the information below, compute the cycle efficiency:

Costs that flow directly to the current income statement are called:

Which of the following is never included in direct materials costs?

Which of the following statements is correct concerning the elements of cycle time?

Managerial accounting is different from financial accounting in that

Costs that are first assigned to inventory are called:

Expenditures incurred in the process of converting raw materials to finished goods, that include direct labor and factory overhead are known as ______________________.

A direct cost is a cost that is:

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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