Question 1

Juliet Corporation has accumulated the following accounting data for the year: The cost of goods manufactured for the year is:

Accepted Answer

A)  $200. 
B)  $1,000. 
C)  $5,000. 
D)  $6,400. 
E)  $8,200. 
A)  $200. 
B)  $1,000. 
C)  $5,000. 
D)  $6,400. 
E)  $8,200.

Question 2

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 3

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 4

Explain what is meant by the "lean business model" and why many businesses have adopted it.

Accepted Answer

The lean business model is a model whose

Question 5

The three major cost components of a manufactured product are:

Accepted Answer

A)  Marketing, selling, and administrative costs. 
B)  Indirect labor, indirect materials, and miscellaneous factory expenses. 
C)  Direct materials, direct labor, and factory overhead. 
D)  Differential costs, opportunity costs, and sunk costs. 
E)  General, selling, and administrative costs. 
A)  Marketing, selling, and administrative costs. 
B)  Indirect labor, indirect materials, and miscellaneous factory expenses. 
C)  Direct materials, direct labor, and factory overhead. 
D)  Differential costs, opportunity costs, and sunk costs. 
E)  General, selling, and administrative costs.

Question 6

Period costs for a manufacturing company would flow directly to:

Accepted Answer

A)  The current income statement. 
B)  Factory overhead. 
C)  The current balance sheet. 
D)  Job cost sheet. 
E)  The current manufacturing statement. 
A)  The current income statement. 
B)  Factory overhead. 
C)  The current balance sheet. 
D)  Job cost sheet. 
E)  The current manufacturing statement.

Question 7

The cost of partially completed products is included in the balance of the Goods in Process Inventory account.

Accepted Answer

A) True 
 B)False

Question 8

If beginning and ending goods in process inventories are $5,000 and $15,000, respectively, and cost of goods manufactured is $170,000, what is the total manufacturing cost for the period?

Accepted Answer

A)  $180,000. 
B)  $155,000. 
C)  $160,000. 
D)  $175,000. 
E)  $165,000. 
A)  $180,000. 
B)  $155,000. 
C)  $160,000. 
D)  $175,000. 
E)  $165,000.

Question 9

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 10

Prime costs consist of direct labor and factory overhead.

Accepted Answer

A) True 
 B)False

Question 11

The series of activities that add value to a company's products or services is called a value chain.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Raw materials that become part of a product and are identified with specific units or batches of a product are called direct materials.

Accepted Answer

A) True 
 B)False

Question 14

For a manufacturer, the cost of goods sold can be computed by adding the beginning finished goods inventory to ________________________ and then subtracting the ending finished goods inventory.

Accepted Answer

Cost of Go

Question 15

Products that have been completed and are ready to be sold by the manufacturer are called:

Accepted Answer

A)  Finished goods inventory. 
B)  Goods in process inventory. 
C)  Raw materials inventory. 
D)  Cost of goods sold. 
E)  Factory supplies. 
A)  Finished goods inventory. 
B)  Goods in process inventory. 
C)  Raw materials inventory. 
D)  Cost of goods sold. 
E)  Factory supplies.

Question 16

Although direct labor and raw materials costs are treated as manufacturing costs and therefore make up part of the finished goods inventory cost, factory overhead is charged to expense as it is incurred because it is a period cost.

Accepted Answer

A) True 
 B)False

Question 17

Goods a company acquires to use in making products are called:

Accepted Answer

A)  Cost of goods sold. 
B)  Raw materials inventory. 
C)  Finished goods inventory. 
D)  Goods in process inventory. 
E)  Conversion costs. 
A)  Cost of goods sold. 
B)  Raw materials inventory. 
C)  Finished goods inventory. 
D)  Goods in process inventory. 
E)  Conversion costs.

Question 18

The total cost of goods completed during the accounting period for a manufacturer is called:

Accepted Answer

A)  Ending finished goods inventory. 
B)  Total manufacturing costs. 
C)  Ending goods in process inventory. 
D)  Cost of goods manufactured. 
E)  Cost of goods sold. 
A)  Ending finished goods inventory. 
B)  Total manufacturing costs. 
C)  Ending goods in process inventory. 
D)  Cost of goods manufactured. 
E)  Cost of goods sold.

Question 19

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 20

If the cost of the beginning goods in process inventory is $10,000, costs of goods manufactured is $890,000, direct materials cost is $330,000, direct labor cost is $210,000, and overhead cost is $315,000, calculate the ending goods in process inventory:

Accepted Answer

A)  $35,000. 
B)  $25,000. 
C)  $45,000. 
D)  $350,000. 
E)  $355,000. 
A)  $35,000. 
B)  $25,000. 
C)  $45,000. 
D)  $350,000. 
E)  $355,000.

Exam 18: Managerial Accounting Concepts and Principles

Juliet Corporation has accumulated the following accounting data for the year: The cost of goods manufactured for the year is:

A direct cost is a cost that is:

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

Explain what is meant by the "lean business model" and why many businesses have adopted it.

The three major cost components of a manufactured product are:

Period costs for a manufacturing company would flow directly to:

The cost of partially completed products is included in the balance of the Goods in Process Inventory account.

If beginning and ending goods in process inventories are $5,000 and $15,000, respectively, and cost of goods manufactured is $170,000, what is the total manufacturing cost for the period?

Total manufacturing costs incurred during the year do not include:

Prime costs consist of direct labor and factory overhead.

The series of activities that add value to a company's products or services is called a value chain.

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

Raw materials that become part of a product and are identified with specific units or batches of a product are called direct materials.

For a manufacturer, the cost of goods sold can be computed by adding the beginning finished goods inventory to ________________________ and then subtracting the ending finished goods inventory.

Products that have been completed and are ready to be sold by the manufacturer are called:

Although direct labor and raw materials costs are treated as manufacturing costs and therefore make up part of the finished goods inventory cost, factory overhead is charged to expense as it is incurred because it is a period cost.

Goods a company acquires to use in making products are called:

The total cost of goods completed during the accounting period for a manufacturer is called:

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.

If the cost of the beginning goods in process inventory is $10,000, costs of goods manufactured is $890,000, direct materials cost is $330,000, direct labor cost is $210,000, and overhead cost is $315,000, calculate the ending goods in process inventory:

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

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