Question 1

What is the formula to calculate gross margin percent?

Accepted Answer

A) gross margin/cost of goods sold 
B) operating income/sales revenue 
C) gross margin/sales revenue 
D) sales revenue/gross margin

Question 2

Research and development costs would be classified as period costs.

Accepted Answer

A) True 
 B)False

Question 3

Last year Quest Company incurred the following costs:
Quest produced and sold 2,000 units at a sales price of $125 each. Assume that beginning and ending inventories of materials, work in process, and finished goods were 0.
 $$\begin{array} { l r } 
\text { Direct materials } & \$ 40,000 \
\text { Direct labour } & 60,000 \
\text { Overhead } & 90,000 \
\text { Selling expenses } & 24,000 \
\text { Administrative expenses } & 22,000
\end{array}$$
-Refer to the Figure.What was Quest's total period expense?

Accepted Answer

A) $24,000 
B) $46,000 
C) $190,000 
D) $250,000

Question 4

Which of the following job positions is an example of direct labour?

Accepted Answer

A) production line worker 
B) maintenance person 
C) security guard 
D) management accountant

Question 5

Cost of goods sold is the total product cost of the units sold during a period.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is an example of a direct materials cost?

Accepted Answer

A) wood used to make furniture 
B) nails used to construct furniture 
C) glue used to build furniture 
D) screws used to manufacture furniture

Question 7

Information from the records of Becker Corporation for December is as follows:
 
-Refer to the Figure.What are the prime costs?

Accepted Answer

A) $564,000 
B) $650,000 
C) $805,000 
D) $969,000

Question 8

ComPrint Co. had the following beginning and ending inventory balances for the year ended December 31:$$\begin{array} { l c c } 
& \text { January 1 } & \text { December } 31 \
\text { Materials } & \$ 10,000 & \$ 8,000 \
\text { Work in Process } & \$ 18,000 & \$ 17,000 \
\text { Finished Goods } & \$ 21,000 & \$ 16,500
\end{array}$$
In addition, direct labour costs of $30,000 were incurred, overhead equalled $42,000, materials purchased were $27,000, and selling and administrative costs were $22,000. ComPrint Co. sold 25,000 units of product during the year at a sales price of $5.00 per unit.
 
-Refer to the Figure.What was the amount of Cost of Goods Manufactured for the year?

Accepted Answer

A) $100,000 
B) $101,000 
C) $102,000 
D) $124,000

Question 9

Select the appropriate classification for each of the items listed below.
-Cost of nails used by a furniture builder

Accepted Answer

A) Product cost 
B) Period cost

Question 10

Select the appropriate item for each of the definitions listed below.
-Sales − cost of goods sold

Accepted Answer

A) Gross margin 
B) Selling expenses 
C) Sales revenue 
D) Cost of goods sold 
E) Operating income

Question 11

Costs can be assigned to cost objects in a number of ways.

Accepted Answer

A) True 
 B)False

Question 12

Assigning costs tells the accountant who spent the money.

Accepted Answer

A) True 
 B)False

Question 13

Select the appropriate definition for each of the items listed below.
-(direct materials + direct labour + overhead)+/− the change in work-in-process inventory from the beginning to the end of the current period

Accepted Answer

A) Work-in-process inventory 
B) Finished goods inventory 
C) Cost of goods sold 
D) Cost of goods manufactured 
E) Total manufacturing costs

Question 14

Select the appropriate classification of the output generated by each of the following industries.
-iTunes

Accepted Answer

A) Tangible 
B) Intangible

Question 15

Which of the following is an example of an intangible product?

Accepted Answer

A) hamburgers 
B) computers 
C) automobiles 
D) dental care

Question 16

Research and development costs would be classified as nonproduction costs.

Accepted Answer

A) True 
 B)False

Question 17

During the month of May,Blackburn Inc.had cost of goods manufactured of $120,000,direct materials cost of $60,000,direct labour cost of $37,000,and overhead cost of $26,000.The work-in-process balance at May 31 equalled $10,000.What was the work-in-process balance on May 1?

Accepted Answer

A) $7,000 
B) $10,000 
C) $13,000 
D) $115,000

Question 18

In terms of managerial accounting,which of the following is the best definition of cost?

Accepted Answer

A) the cash sacrificed for goods expected to bring future benefit to the organization 
B) a dollar measure of the cash used to achieve a given benefit 
C) the asset incurred to produce future benefits 
D) the equivalent of the cost of goods sold

Question 19

Select the appropriate classification for each of the items listed below.
-Rental cost of executive Lear jet

Accepted Answer

A) Product cost 
B) Period cost

Question 20

Bowring Company took the following data from their income statement at the end of the current year.
 $$\begin{array} { l r } 
\text { Per-unit product cost: } & \$ 30 \
\text { Gross margin percentage: } & 40 \% \
\text { Selling and admini strative expenses } & \$ 30,000 \
\text { Operating income } & \$ 10,000
\end{array}$$
-Refer to the Figure.How many units were sold during the year?

Accepted Answer

A) 1,000 
B) 1,500 
C) 2,000 
D) 3,333

Exam 2: Basic Managerial Accounting Concepts

What is the formula to calculate gross margin percent?

Research and development costs would be classified as period costs.

Which of the following job positions is an example of direct labour?

Cost of goods sold is the total product cost of the units sold during a period.

Which of the following is an example of a direct materials cost?

Information from the records of Becker Corporation for December is as follows: -Refer to the Figure.What are the prime costs?

Select the appropriate classification for each of the items listed below. -Cost of nails used by a furniture builder

Select the appropriate item for each of the definitions listed below. -Sales − cost of goods sold

Costs can be assigned to cost objects in a number of ways.

Assigning costs tells the accountant who spent the money.

Select the appropriate definition for each of the items listed below. -(direct materials + direct labour + overhead) +/− the change in work-in-process inventory from the beginning to the end of the current period

Select the appropriate classification of the output generated by each of the following industries. -iTunes

Which of the following is an example of an intangible product?

Research and development costs would be classified as nonproduction costs.

During the month of May,Blackburn Inc.had cost of goods manufactured of $120,000,direct materials cost of $60,000,direct labour cost of $37,000,and overhead cost of $26,000.The work-in-process balance at May 31 equalled $10,000.What was the work-in-process balance on May 1?

In terms of managerial accounting,which of the following is the best definition of cost?

Select the appropriate classification for each of the items listed below. -Rental cost of executive Lear jet