Question 1

H & R Block, an income tax preparation service, is what type of company?

Accepted Answer

A)  Manufacturer 
B)  Service company 
C)  Retailer 
D)  Wholesaler

Question 2

Use the information below to answer the following question(s).
Paris Plastics has monthly fixed costs of $90,000, while its variable costs are $4.00 per unit. The sales price per unit is $16.00 and Paris Plastics sold 12,000 units.
-Paris Plastics' total sales revenue will be

Accepted Answer

A)  $192,000. 
B)  $144,000. 
C)  $90,000. 
D)  $54,000.

Question 3

Which of the following is characteristic of a service company?

Accepted Answer

A)  Service companies generally have no tangible products to sell. 
B)  Service companies have a single category of inventory. 
C)  Service companies make a product. 
D)  Service companies transform raw materials into finished goods.

Question 4

A company is deciding whether to purchase production equipment which can produce units more quickly than the current equipment. Which of the following costs would be relevant to its decision?

Accepted Answer

A)  The cost of the new equipment 
B)  The salary of the factory manager 
C)  The cost of raw materials 
D)  The original purchase price of the current machinery

Question 5

The owner of Spicy's Gourmet Popcorn is concerned because the stand has been averaging sales of only 7,500 cartons per month, the stand and staff can make 15,000 cartons of popcorn per month. The variable cost of each carton is $1.50. Monthly fixed costs are (taxes, licenses, space rent and salaries) are $10,000. The owner believes he could sell 15,000 cartons per month if he cuts the sales price from $5.50 to $5.00 per carton. How much extra profit (above the current level) would he generate if he decreased the sales price?

Accepted Answer

The answer of The owner of Spicy's Gourmet Popcorn is...

Question 6

Differential cost is the difference in cost between two alternatives.

Accepted Answer

A) True 
 B)False

Question 7

Before these materials are used to manufacture its cars, Honda classifies steel, glass, and plastic as

Accepted Answer

A)  finished goods inventory. 
B)  raw materials inventory. 
C)  work in process inventory. 
D)  merchandise inventory.

Question 8

Eschliman Manufacturing Company had the following account balances for the quarter ending September 30, unless otherwise noted:
 
 Required:
a. Prepare a cost of goods manufactured schedule for the quarter.
b. Prepare a cost of goods sold schedule for the quarter.

Accepted Answer

The answer of Eschliman Manufacturing Company had the following account...

Question 9

Use the information below to answer the following question(s).
Frazer Inc. had the following activities in the year:
 
-What is Frazer's cost of goods manufactured?

Accepted Answer

A)  $536,000 
B)  $496,000 
C)  $480,000 
D)  $476,000

Question 10

Use the information below to answer the following question(s).
Lucas Family Orange Groves processes a variety of fresh juices. The company has the following expenses for July:

-What is the total cost for the customer service category of the value chain at Lucas Family Orange Groves?

Accepted Answer

A)  $14,000 
B)  $18,000 
C)  $45,000 
D)  $4,000

Question 11

Which of the following is an inventoriable cost?

Accepted Answer

A)  Direct labour expenses 
B)  Distribution expenses 
C)  Marketing expenses 
D)  Research and development expenses

Question 12

Use the information below to answer the following question(s).
Lucas Family Orange Groves processes a variety of fresh juices. The company has the following expenses for July:

-What is the total cost for the design category of the value chain at Lucas Family Groves?

Accepted Answer

A)  $4,000 
B)  $106,000 
C)  $216,000 
D)  $102,000

Question 13

Use the information below to answer the following question(s).
Lucas Family Orange Groves processes a variety of fresh juices. The company has the following expenses for July:

-What is the total cost for the production category of the value chain at Lucas Family Orange Groves?

Accepted Answer

A)  $132,000 
B)  $137,000 
C)  $108,000 
D)  $141,000

Question 14

A merchandiser's purchases are equivalent to a manufacturer's

Accepted Answer

A)  cost of goods manufactured. 
B)  cost of goods sold. 
C)  raw materials inventory. 
D)  work in process inventory.

Question 15

Use the information below to answer the following question(s).
Sunnybrook Orange Groves processes a variety of fresh juices. The company has the following expenses for July:

-What is the total cost for the research and development category of the value chain at Sunnybrook Orange Groves?

Accepted Answer

A)  $93,000 
B)  $102,000 
C)  $89,000 
D)  $191,000

Question 16

What is the meaning of the term "cost object"? Give an example of a cost object that would be used in a manufacturing company, a merchandising company, and a service sector company.

Accepted Answer

The answer of What is the meaning of the term...

Question 17

Differentiate between relevant and irrelevant costs and give an example using both.

Accepted Answer

The answer of Differentiate between relevant and irrelevant costs and...

Question 18

A lawn mowing business would be classified as a

Accepted Answer

A)  manufacturing company. 
B)  merchandising company. 
C)  service company. 
D)  wholesale company.

Question 19

A restaurant is facing a decision about whether it should bake its own dinner rolls or whether it should continue to purchase the dinner rolls from a local bakery. Which of the following costs would be relevant to its decision?

Accepted Answer

A)  The salary of the restaurant manager 
B)  The purchase price of the dinner rolls purchased from the local bakery 
C)  The price the restaurant sells the dinner rolls for 
D)  The original purchase price of the current machinery

Question 20

Delivery expenses are charged to which of the following areas?

Accepted Answer

A)  Customer service 
B)  Distribution 
C)  Production or purchases 
D)  Marketing

Exam 2: Building Blocks of Managerial Accounting

H & R Block, an income tax preparation service, is what type of company?

Use the information below to answer the following question(s) . Paris Plastics has monthly fixed costs of $90,000, while its variable costs are $4.00 per unit. The sales price per unit is $16.00 and Paris Plastics sold 12,000 units. -Paris Plastics' total sales revenue will be

Which of the following is characteristic of a service company?

A company is deciding whether to purchase production equipment which can produce units more quickly than the current equipment. Which of the following costs would be relevant to its decision?

Differential cost is the difference in cost between two alternatives.

Before these materials are used to manufacture its cars, Honda classifies steel, glass, and plastic as

Eschliman Manufacturing Company had the following account balances for the quarter ending September 30, unless otherwise noted: Required: a. Prepare a cost of goods manufactured schedule for the quarter. b. Prepare a cost of goods sold schedule for the quarter.

Use the information below to answer the following question(s) . Frazer Inc. had the following activities in the year: -What is Frazer's cost of goods manufactured?

Use the information below to answer the following question(s) . Lucas Family Orange Groves processes a variety of fresh juices. The company has the following expenses for July: -What is the total cost for the customer service category of the value chain at Lucas Family Orange Groves?

Which of the following is an inventoriable cost?

Use the information below to answer the following question(s) . Lucas Family Orange Groves processes a variety of fresh juices. The company has the following expenses for July: -What is the total cost for the design category of the value chain at Lucas Family Groves?

Use the information below to answer the following question(s) . Lucas Family Orange Groves processes a variety of fresh juices. The company has the following expenses for July: -What is the total cost for the production category of the value chain at Lucas Family Orange Groves?

A merchandiser's purchases are equivalent to a manufacturer's

Use the information below to answer the following question(s) . Sunnybrook Orange Groves processes a variety of fresh juices. The company has the following expenses for July: -What is the total cost for the research and development category of the value chain at Sunnybrook Orange Groves?

What is the meaning of the term "cost object"? Give an example of a cost object that would be used in a manufacturing company, a merchandising company, and a service sector company.

Differentiate between relevant and irrelevant costs and give an example using both.

A lawn mowing business would be classified as a

A restaurant is facing a decision about whether it should bake its own dinner rolls or whether it should continue to purchase the dinner rolls from a local bakery. Which of the following costs would be relevant to its decision?

Delivery expenses are charged to which of the following areas?