Question 1

The entire sequence of activities that add value to a company's products and services is called ________.

Accepted Answer

A)  the value chain 
B)  the planning process 
C)  TQM production chain 
D)  Enterprise Resource Planning

Question 2

Bloomington,Inc.is a merchandiser of stone ornaments.The company sold 6,000 units during the year.The company has provided the following information: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 566,000 \
\hline \text { Purchases (excluding freight in) } & 300,000 \
\hline \text { Selling and Administrative Expenses } & 69,000 \
\hline \text { Freight In } & 13,000 \
\hline \text { Beginning Merchandise Inventory } & 44,000 \
\hline \text { Ending Merchandise Inventory } & 43,000 \
\hline
\end{array}$$ 
What is the cost of goods sold for the year?

Accepted Answer

A)  $357,000 
B)  $314,000 
C)  $312,000 
D)  $301,000

Question 3

Manufacturing overhead includes all manufacturing costs,such as direct labor and direct materials.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following would be included as indirect manufacturing costs for a manufacturing company?

Accepted Answer

A)  sales commissions 
B)  fuel and maintenance for delivery vehicles 
C)  wages of the assembly line workers 
D)  wages of the factory manager

Question 5

The following format represents the flow of costs for all three manufacturing inventory accounts:
Beginning balance + Additions - Ending balance = Amount used,manufactured,or sold

Accepted Answer

A) True 
 B)False

Question 6

Define direct cost.

Accepted Answer

The answer of Define direct cost....

Question 7

In a manufacturing company,the salary of the sales staff is an example of period cost.

Accepted Answer

A) True 
 B)False

Question 8

The following information was obtained from Fizz,Inc.: $$\begin{array} { | l | r | } 
\hline \text { Advertising Costs } & \$ 10,600 \
\hline \text { Indirect Labor } & 7,000 \
\hline \text { CEO's Salary } & 500,000 \
\hline \text { Direct Labor } & 56,000 \
\hline \text { Indirect Materials Used } & 7,500 \
\hline \text { Direct Materials Used } & 370,000 \
\hline \text { Factory Utilities } & 800 \
\hline \text { Factory Janitorial Costs } & 2,500 \
\hline \text { Manufacturing Equipment Depreciation } & 2,500 \
\hline \text { Delivery Vehicle Depreciation } & 2,600 \
\hline \text { Administrative Wages and Salaries } & 33,900 \
\hline
\end{array}$$ How much were Fizz's period costs?

Accepted Answer

A)  $446,300 
B)  $547,100 
C)  $13,200 
D)  $544,500

Question 9

In a manufacturing company,wages and benefits of assembly line workers are period costs.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following will be included in manufacturing overhead costs?

Accepted Answer

A)  indirect labor and indirect materials used 
B)  salaries of salesmen 
C)  direct materials and direct labor 
D)  delivery costs to ship goods to customers

Question 11

Which of the following is true of service companies?

Accepted Answer

A)  All costs of service companies are product costs. 
B)  Service companies modify and resell products they buy from manufacturers. 
C)  Revenues of service companies are only recorded on cash receipt. 
D)  Service companies carry no inventories of products for sale.

Question 12

Indirect materials costs are included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 13

A company that uses labor,equipment,supplies,and facilities to convert raw materials into finished products is a ________.

Accepted Answer

A)  merchandising company 
B)  manufacturing company 
C)  service company 
D)  trading company

Question 14

Nurix,Inc.is a business consulting firm.During the month of February,Nurix earned $55,600 of revenues by providing services to 46 clients.Operating expenses for February were $9,000 and non-operating expenses were $4,000. What is the unit cost per service? (Round your answer to the nearest cent.)

Accepted Answer

A)  $86.96 
B)  $195.65 
C)  $1,208.70 
D)  $282.61

Question 15

The IMA standards of ethical practice require managerial accountants to maintain their professional competence.

Accepted Answer

A) True 
 B)False

Question 16

Best,Inc.,a merchandiser,sells office supplies.The following information summarizes Best's operating activities during the year:
 $$\begin{array} { | l| r | } 
\hline \text { Utilities Expense } & \$ 6,000 \
\hline \text { Rent for Store Expense } & 8,000 \
\hline \text { Sales Commissions Expense } & 4,500 \
\hline \text { Purchases of Merchandise } & 54,000 \
\hline \text { Merchandise Inventory on January 1 } & 30,000 \
\hline \text { Merchandise Inventory on December 31 } & 20,500 \
\hline \text { Sales Revenue } & 108,000 \
\hline
\end{array}$$
 Required: Prepare an income statement for Best,Inc.for the year ended December 31,using the format below.
 $$\begin{array} { | l | l | l | } 
\hline \text { Sales Revenue } &\quad\quad &\quad\quad \
\hline \text { Cost of Goods Sold: } & & \
\hline \text { Beginning Inventory } & & \
\hline \text { Purchases } & & \
\hline \text { Cost of Goods Available for Sale } & & \
\hline \text { Ending Inventory } & & \
\hline \text { Cost of Goods Sold } & & \
\hline \text { Gross Profit } & & \
\hline \text { Selling Expenses: } & & \
\hline \text { Sales Commissions Expense } & & \
\hline \text { Administrative Expenses: } & & \
\hline \text { Rent Expense } & & \
\hline \text { Utilities Expense } & & \
\hline \text { Total Operating Expenses } & & \
\hline \text { Operating Income } & & \
\hline
\end{array}$$

Accepted Answer

The answer of Best,Inc.,a merchandiser,sells office supplies.The following information summarizes...

Question 17

Managerial accounting reporting by a public firm is required to follow the rules of GAAP and guidelines of the Securities and Exchange Commission.

Accepted Answer

A) True 
 B)False

Question 18

Product costs are expensed ________.

Accepted Answer

A)  when the products are consumed or sold 
B)  when the accounting period they are incurred in comes to an end 
C)  when the products are transferred to the Work-in-Process Inventory account 
D)  when the market value of products goes above the recorded value

Question 19

Which of the following formulas represents cost of goods sold for a merchandising business?

Accepted Answer

A)  Beginning Merchandise Inventory - Ending Merchandise Inventory = Cost of Goods Sold 
B)  Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold 
C)  Ending Merchandise Inventory + Purchases and Freight In - Beginning Merchandise Inventory = Cost of Goods Sold 
D)  Beginning Merchandise Inventory + Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold

Question 20

The salary of a manufacturing plant manager will be included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Exam 18: Introduction to Managerial Accounting

The entire sequence of activities that add value to a company's products and services is called ________.

Manufacturing overhead includes all manufacturing costs,such as direct labor and direct materials.

Which of the following would be included as indirect manufacturing costs for a manufacturing company?

The following format represents the flow of costs for all three manufacturing inventory accounts: Beginning balance + Additions - Ending balance = Amount used,manufactured,or sold

Define direct cost.

In a manufacturing company,the salary of the sales staff is an example of period cost.

In a manufacturing company,wages and benefits of assembly line workers are period costs.

Which of the following will be included in manufacturing overhead costs?

Which of the following is true of service companies?

Indirect materials costs are included in manufacturing overhead.

A company that uses labor,equipment,supplies,and facilities to convert raw materials into finished products is a ________.

Nurix,Inc.is a business consulting firm.During the month of February,Nurix earned $55,600 of revenues by providing services to 46 clients.Operating expenses for February were $9,000 and non-operating expenses were $4,000. What is the unit cost per service? (Round your answer to the nearest cent.)

The IMA standards of ethical practice require managerial accountants to maintain their professional competence.

Managerial accounting reporting by a public firm is required to follow the rules of GAAP and guidelines of the Securities and Exchange Commission.

Product costs are expensed ________.

Which of the following formulas represents cost of goods sold for a merchandising business?

The salary of a manufacturing plant manager will be included in manufacturing overhead.