Question 1

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 2

Managerial accounting provides financial and nonfinancial information to an organization's managers and other internal decision makers.

Accepted Answer

A) True 
 B)False

Question 3

Last year, Smith Company sold 10,000 units of its only product. If sales increase by 15% in the current year, how will unit variable cost and unit fixed cost be affected?

Accepted Answer

A)  Choice A 
B)  Choice B 
C)  Choice C 
D)  Choice D 
E)  Choice E 
A)  Choice A 
B)  Choice B 
C)  Choice C 
D)  Choice D 
E)  Choice E

Question 4

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 5

A classification of costs that is useful for assigning responsibility to and evaluating managers is:

Accepted Answer

A)  Classification by traceability. 
B)  Classification by behavior. 
C)  Classification by relevance. 
D)  Classification by function. 
E)  Classification by controllability. 
A)  Classification by traceability. 
B)  Classification by behavior. 
C)  Classification by relevance. 
D)  Classification by function. 
E)  Classification by controllability.

Question 6

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 7

A fixed 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)  Changes with changes in the volume of activity within the relevant range. 
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)  Changes with changes in the volume of activity within the relevant range. 
E)  Has already been incurred and cannot be avoided so it is irrelevant for decision making.

Question 8

What are the three types of inventories that are carried by manufacturers? Describe each type of inventory.

Accepted Answer

Manufacturers carry three types of inven

Question 9

Direct materials are not usually easily traced to a product.

Accepted Answer

A) True 
 B)False

Question 10

What are prime costs? What are conversion costs?

Accepted Answer

Prime costs are expenditures directly as

Question 11

Whitman Products and Rockland Industries report the following information at December 31:
Required:
(a) Which company is a manufacturer? Explain.
(b) Prepare the Current Asset Section of the Balance Sheet for the manufacturer.

Accepted Answer

(a) Rockland Industries is the manufactu

Question 12

The Malcolm Baldridge Award was established by

Accepted Answer

A)  The United Nations. 
B)  The U.S. Chamber of Commerce. 
C)  The Malcolm Baldridge Foundation. 
D)  The U.S. Congress. 
E)  The SEC. 
A)  The United Nations. 
B)  The U.S. Chamber of Commerce. 
C)  The Malcolm Baldridge Foundation. 
D)  The U.S. Congress. 
E)  The SEC.

Question 13

A _________________ cost contains a combination of fixed and variable costs.

Accepted Answer

The answer of A _________________ cost contains a combination of...

Question 14

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 15

Newly completed units are combined with beginning finished goods inventory to make up total ending goods in process inventory.

Accepted Answer

A) True 
 B)False

Question 16

Labor costs that are clearly associated with specific units or batches of product because the labor is used to convert raw materials into finished products are called:

Accepted Answer

A)  Sunk labor. 
B)  Direct labor. 
C)  Indirect labor. 
D)  Finished labor. 
E)  All of these. 
A)  Sunk labor. 
B)  Direct labor. 
C)  Indirect labor. 
D)  Finished labor. 
E)  All of these.

Question 17

Costs may be classified by many different cost classifications.

Accepted Answer

A) True 
 B)False

Question 18

What is the cycle time for a manufacturer? What does it reveal about the manufacturing process?

Accepted Answer

Cycle time is defined as process time +

Question 19

A company's prime costs total $3,000,000 and its conversion costs total $7,000,000. If direct materials are $1,000,000 and factory overhead is $5,000,000, then direct labor is:

Accepted Answer

A)  $4,000,000. 
B)  $14,000,000. 
C)  $2,000,000. 
D)  $1,000,000. 
E)  $3,000,000. 
A)  $4,000,000. 
B)  $14,000,000. 
C)  $2,000,000. 
D)  $1,000,000. 
E)  $3,000,000.

Question 20

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.

Exam 18: Managerial Accounting Concepts and Principles

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

Managerial accounting provides financial and nonfinancial information to an organization's managers and other internal decision makers.

Last year, Smith Company sold 10,000 units of its only product. If sales increase by 15% in the current year, how will unit variable cost and unit fixed cost be affected?

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

A classification of costs that is useful for assigning responsibility to and evaluating managers is:

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

A fixed cost:

What are the three types of inventories that are carried by manufacturers? Describe each type of inventory.

Direct materials are not usually easily traced to a product.

What are prime costs? What are conversion costs?

Whitman Products and Rockland Industries report the following information at December 31: Required: (a) Which company is a manufacturer? Explain. (b) Prepare the Current Asset Section of the Balance Sheet for the manufacturer.

The Malcolm Baldridge Award was established by

A _________________ cost contains a combination of fixed and variable costs.

Using the information below, compute the cycle efficiency:

Newly completed units are combined with beginning finished goods inventory to make up total ending goods in process inventory.

Labor costs that are clearly associated with specific units or batches of product because the labor is used to convert raw materials into finished products are called:

Costs may be classified by many different cost classifications.

What is the cycle time for a manufacturer? What does it reveal about the manufacturing process?

A company's prime costs total $3,000,000 and its conversion costs total $7,000,000. If direct materials are $1,000,000 and factory overhead is $5,000,000, then direct labor is:

Costs that are first assigned to inventory are called:

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

Long-Term Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

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

Filters