Question 1

Noble,Inc.purchases each unit of product X for $100 and can sell it in the market for $135.The price of the product for Noble would be $100.

Accepted Answer

A) True 
 B)False

Question 2

The cost of goods manufactured includes selling expenses,administrative expenses,and manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 3

Managerial accounting includes the planning function.Which of the following items would be part of the planning function of a business's managerial accounting?

Accepted Answer

A)  comparing actual to expected results 
B)  choosing goals and deciding how to achieve them 
C)  monitoring operations to keep the company on track 
D)  monitoring and evaluating the results of operations

Question 4

How does a service company calculate unit cost per service? Why do managers need to know the unit cost per service?

Accepted Answer

The answer of How does a service company calculate unit...

Question 5

A merchandiser does not need to calculate cost per unit because it resells goods that are already manufactured.

Accepted Answer

A) True 
 B)False

Question 6

Accuracy Accounting,Inc.sells accounting textbooks.The following information summarizes Accuracy Accounting's operating activities for the year:
 $$\begin{array} { | l | r | } 
\hline \text { Merchandise Inventory, January 1 } & \$ 10,000 \
\hline \text { Merchandise Inventory, December 31 } & 7,000 \
\hline \text { Purchases } & 95,000 \
\hline \text { Selling and Administrative Expenses } & 65,000 \
\hline \text { Sales Revenue } & 180,000 \
\hline
\end{array}$$ Required: Prepare Accuracy Accounting,Inc.'s income statement for the year ended December 31.

Accepted Answer

The answer of Accuracy Accounting,Inc.sells accounting textbooks.The following information summarizes...

Question 7

Identify each cost as a period cost or a product cost.
-Production supervisor's salary

Accepted Answer

A) Product cost 
B) Period cost

Question 8

Manufacturing companies have inventory accounts,but merchandising companies do not.

Accepted Answer

A) True 
 B)False

Question 9

Comparing actual results to expected results is part of the ________.

Accepted Answer

A)  controlling function of managerial accounting 
B)  planning function of managerial accounting 
C)  reporting function of managerial accounting 
D)  organizing function of managerial accounting

Question 10

Which of the following is a focus of managerial accounting?

Accepted Answer

A)  to generate a company's financial statements for tax reporting 
B)  to provide information to business managers to assist them in controlling their businesses 
C)  to provide information to shareholders to assist them with their investment decisions 
D)  to ensure that the reports produced for internal and external business purposes are GAAP compliant

Question 11

Which of the following statements is TRUE of financial accounting?

Accepted Answer

A)  It provides information to investors needed for their investment decisions. 
B)  It provides future focused information needed for managing and delegating operations. 
C)  It focuses on detailed reports for parts of the company rather than the whole company. 
D)  It focuses on planning, directing and controlling day-to-day operations.

Question 12

Which of the following would be classified as a prime cost?

Accepted Answer

A)  cost of direct materials used 
B)  depreciation on factory equipment 
C)  salary of sales personnel 
D)  depreciation on office furniture

Question 13

Five Seasons is a merchandiser of packed foods.The company provides the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 145,000 \
\hline \text { Cost of Goods Sold } & 64,000 \
\hline \text { Operating Expenses } & 67,000 \
\hline \text { Net Income } & 14,000 \
\hline \text { Number of Units Sold } & 29,000 \
\hline
\end{array}$$ How much was the unit cost per item of product sold? (Round your answer to the nearest cent.)

Accepted Answer

A)  $4.52 
B)  $5.00 
C)  $2.21 
D)  $100.48

Question 14

Which of the following would be considered a direct labor cost for a manufacturing company?

Accepted Answer

A)  wages of the assembly line staff 
B)  wages of the factory janitors 
C)  wages of the factory manager 
D)  salaries of the internal auditors

Question 15

Citrine Manufacturing provided the following information for the month ended March 31:
 $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 22,000 \
\hline \text { Beginning Finished Goods Inventory } & 7,000 \
\hline \text { Ending Finished Goods Inventory } & 6,500 \
\hline \text { Cost of Goods Manufactured } & 10,600 \
\hline \text { Selling and Administrative Expenses } & 5,125 \
\hline
\end{array}$$ Prepare the income statement.

Accepted Answer

The answer of Citrine Manufacturing provided the following information for...

Question 16

Define indirect labor and give two examples of indirect labor for a manufacturing company.

Accepted Answer

The answer of Define indirect labor and give two examples...

Question 17

Viva,Inc.has provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Cost of Goods Manufactured } & \$ 1,261,000 \
\hline \text { Beginning Balance - Finished Goods Inventory } & 99,000 \
\hline \text { Ending Balance - Finished Goods Inventory } & 85,000 \
\hline
\end{array}$$ What is the cost of goods sold?

Accepted Answer

A)  $184,000 
B)  $1,275,000 
C)  $1,261,000 
D)  $1,247,000

Question 18

Strategic planning focuses on short term actions while operational planning involves developing long-term strategies.

Accepted Answer

A) True 
 B)False

Question 19

Financial accounting prepares reports for internal purposes,whereas managerial accounting provides information to external stakeholders.

Accepted Answer

A) True 
 B)False

Question 20

Fuchsia,Inc.provides automobile repair services in the local community.The company provides the following information for the month of March: $$\begin{array} { | l | r | } 
\hline \text { Building Rent Expense } & \$ 5200 \
\hline \text { Depreciation Expense-Equipment } & 1600 \
\hline \text { Supplies Expense } & 8000 \
\hline \text { Utilities Expense } & 2350 \
\hline
\end{array}$$ Fuchsia provided services to 1600 clients in the month of March and generated $23,500 as revenue.
How much is the cost per service? (Round your answer to the nearest cent.)

Accepted Answer

A)  $10.72 
B)  $3.25 
C)  $10.00 
D)  $5.72

Exam 18: Introduction to Managerial Accounting

Noble,Inc.purchases each unit of product X for $100 and can sell it in the market for $135.The price of the product for Noble would be $100.

The cost of goods manufactured includes selling expenses,administrative expenses,and manufacturing overhead.

Managerial accounting includes the planning function.Which of the following items would be part of the planning function of a business's managerial accounting?

How does a service company calculate unit cost per service? Why do managers need to know the unit cost per service?

A merchandiser does not need to calculate cost per unit because it resells goods that are already manufactured.

Identify each cost as a period cost or a product cost. -Production supervisor's salary

Manufacturing companies have inventory accounts,but merchandising companies do not.

Comparing actual results to expected results is part of the ________.

Which of the following is a focus of managerial accounting?

Which of the following statements is TRUE of financial accounting?

Which of the following would be classified as a prime cost?

Which of the following would be considered a direct labor cost for a manufacturing company?

Define indirect labor and give two examples of indirect labor for a manufacturing company.

Strategic planning focuses on short term actions while operational planning involves developing long-term strategies.

Financial accounting prepares reports for internal purposes,whereas managerial accounting provides information to external stakeholders.