Question 1

Manufacturing costs that cannot be classified as direct materials or direct labor are classified as manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 2

A manufacturing company reports cost of goods manufactured as a(n)

Accepted Answer

A) current asset on the balance sheet. 
B) administrative expense on the income statement. 
C) component in the calculation of cost of goods sold on the income statement. 
D) component of the raw materials inventory on the balance sheet. 
A) current asset on the balance sheet. 
B) administrative expense on the income statement. 
C) component in the calculation of cost of goods sold on the income statement. 
D) component of the raw materials inventory on the balance sheet.

Question 3

Product costs consist of

Accepted Answer

A) direct materials and direct labor only. 
B) direct materials, direct labor, and manufacturing overhead. 
C) selling and administrative expenses. 
D) period costs. 
A) direct materials and direct labor only. 
B) direct materials, direct labor, and manufacturing overhead. 
C) selling and administrative expenses. 
D) period costs.

Question 4

Which one of the following does not appear on the balance sheet of a manufacturing company?

Accepted Answer

A) Finished goods inventory 
B) Work in process inventory 
C) Cost of goods manufactured 
D) Raw materials inventory 
A) Finished goods inventory 
B) Work in process inventory 
C) Cost of goods manufactured 
D) Raw materials inventory

Question 5

When the physical association of raw materials with the finished product is too small to trace in terms of cost, they are usually classified as indirect materials.

Accepted Answer

A) True 
 B)False

Question 6

Internal reports are generally

Accepted Answer

A) aggregated. 
B) detailed. 
C) regulated. 
D) unreliable. 
A) aggregated. 
B) detailed. 
C) regulated. 
D) unreliable.

Question 7

How have many companies significantly lowered inventory levels and costs?

Accepted Answer

A) They use activity-based costing. 
B) They utilize a balanced scorecard system. 
C) They have a just-in-time method. 
D) They focus on total quality management. 
A) They use activity-based costing. 
B) They utilize a balanced scorecard system. 
C) They have a just-in-time method. 
D) They focus on total quality management.

Question 8

For a manufacturing company, which of the following is an example of a period cost rather than a product cost?

Accepted Answer

A) Depreciation on factory equipment 
B) Wages of salespersons 
C) Wages of machine operators 
D) Insurance on factory equipment 
A) Depreciation on factory equipment 
B) Wages of salespersons 
C) Wages of machine operators 
D) Insurance on factory equipment

Question 9

Ogleby Inc.'s accounting records reflect the following inventories: $$\begin{array} { l c c } 
& \text { Dec. 31,2016 } & \text { Dec. 31, 2017 } \
\text { Raw materials inventory } & \$ 120,000 & \$ 96,000 \
\text { Work in process inventory } & 156,000 & 174,000 \
\text { Finished goods inventory } & 150,000 & 138,000
\end{array}$$ During 2017, Ogleby purchased $980,000 of raw materials, incurred direct labor costs of $175,000, and incurred manufacturing overhead totaling $224,000. How much would Ogleby Manufacturing report as cost of goods manufactured for 2017?

Accepted Answer

A) $1,229,000 
B) $1,397,000 
C) $1,391,000 
D) $1,385,000 
A) $1,229,000 
B) $1,397,000 
C) $1,391,000 
D) $1,385,000

Question 10

Financial and managerial accounting are similar in that both

Accepted Answer

A) have the same primary users. 
B) produce general-purpose reports. 
C) have reports that are prepared quarterly and annually. 
D) deal with the economic events of an enterprise. 
A) have the same primary users. 
B) produce general-purpose reports. 
C) have reports that are prepared quarterly and annually. 
D) deal with the economic events of an enterprise.

Question 11

Many companies now focus on reducing defects in finished products with the goal of zero defects.This is called

Accepted Answer

A) Activity-based costing. 
B) Balanced scorecard. 
C) Value chain. 
D) Total quality management. 
A) Activity-based costing. 
B) Balanced scorecard. 
C) Value chain. 
D) Total quality management.

Question 12

Edmiston Company reported the following year-end information: beginning work in process inventory, $80,000; cost of goods manufactured, $750,000; beginning finished goods inventory, $50,000; ending work in process inventory, $70,000; and ending finished goods inventory, $40,000.How much is Edmiston's cost of goods sold for the year?

Accepted Answer

A) $750,000 
B) $760,000 
C) $740,000 
D) $770,000 
A) $750,000 
B) $760,000 
C) $740,000 
D) $770,000

Question 13

The product cost that is most difficult to associate with a product is

Accepted Answer

A) direct materials. 
B) direct labor. 
C) manufacturing overhead. 
D) advertising. 
A) direct materials. 
B) direct labor. 
C) manufacturing overhead. 
D) advertising.

Question 14

Direct materials and direct labor of a company total $8,000,000.If manufacturing overhead is $4,000,000, what is direct labor cost?

Accepted Answer

A) $4,000,000 
B) $8,000,000 
C) $0 
D) Cannot be determined from the information provided 
A) $4,000,000 
B) $8,000,000 
C) $0 
D) Cannot be determined from the information provided

Question 15

Using the following information, compute the cost of direct materials used. $\begin{array}{lll}
\text { Raw materials inventory, January 1 } & 30,000 \
\text { Raw materials inventory, December } 31 & 60,000 \
\text { Work in process, January 1 } & 27,000 \
\text { Work in process, December 31 } & 18,000 \
\text { Finished goods, January 1 } & 60,000 \
\text { Finished goods, December 31 } & 48,000\
\text { Raw materials purchases } & 1,800,000 \
\text { Direct labor } & 890,000 \
\text { Factory utilities } & 225,000 \
\text { Indirect labor } & 75,000 \
\text { Factory depreciation } & 500,000 \
\text { Operating expenses } & 630,000
\end{array}$

Accepted Answer

A) $1,740,000. 
B) $1,830,000. 
C) $1,800,000. 
D) $1,770,000. 
A) $1,740,000. 
B) $1,830,000. 
C) $1,800,000. 
D) $1,770,000.

Question 16

Which one of the following represents a period cost?

Accepted Answer

A) The VP of Sales' salary and benefits 
B) Overhead allocated to the manufacturing operations 
C) Labor costs associated with quality control 
D) Fringe benefits associated with factory workers 
A) The VP of Sales' salary and benefits 
B) Overhead allocated to the manufacturing operations 
C) Labor costs associated with quality control 
D) Fringe benefits associated with factory workers

Question 17

Kushman Combines, Inc.has $20,000 of ending finished goods inventory as of December 31, 2013.If beginning finished goods inventory was $10,000 and cost of goods sold was $50,000, how much would Kushman report for cost of goods manufactured?

Accepted Answer

A) $70,000 
B) $10,000 
C) $60,000 
D) $40,000 
A) $70,000 
B) $10,000 
C) $60,000 
D) $40,000

Question 18

The management function of organizing and directing is mainly concerned with setting goals and objectives for the entity.

Accepted Answer

A) True 
 B)False

Question 19

Raw materials are equal to direct materials minus indirect materials.

Accepted Answer

A) True 
 B)False

Question 20

Assuming the cost of direct materials used is $1,800,000, compute the total manufacturing costs using the information below. $\begin{array}{lll}
\text { Raw materials inventory, January 1 } & 30,000 \
\text { Raw materials inventory, December } 31 & 60,000 \
\text { Work in process, January 1 } & 27,000 \
\text { Work in process, December 31 } & 18,000 \
\text { Finished goods, January 1 } & 60,000 \
\text { Finished goods, December 31 } & 48,000\
\text { Raw materials purchases } & 1,800,000 \
\text { Direct labor } & 890,000 \
\text { Factory utilities } & 225,000 \
\text { Indirect labor } & 75,000 \
\text { Factory depreciation } & 500,000 \
\text { Operating expenses } & 630,000
\end{array}$

Accepted Answer

A) $3,490,000. 
B) $3,499,000. 
C) $3,190,000. 
D) $4,120,000. 
A) $3,490,000. 
B) $3,499,000. 
C) $3,190,000. 
D) $4,120,000.

Manufacturing costs that cannot be classified as direct materials or direct labor are classified as manufacturing overhead.

A manufacturing company reports cost of goods manufactured as a(n)

Product costs consist of

Which one of the following does not appear on the balance sheet of a manufacturing company?

When the physical association of raw materials with the finished product is too small to trace in terms of cost, they are usually classified as indirect materials.

Internal reports are generally

How have many companies significantly lowered inventory levels and costs?

For a manufacturing company, which of the following is an example of a period cost rather than a product cost?

Financial and managerial accounting are similar in that both

Many companies now focus on reducing defects in finished products with the goal of zero defects.This is called

The product cost that is most difficult to associate with a product is

Direct materials and direct labor of a company total $8,000,000.If manufacturing overhead is $4,000,000, what is direct labor cost?

Which one of the following represents a period cost?

Kushman Combines, Inc.has $20,000 of ending finished goods inventory as of December 31, 2013.If beginning finished goods inventory was $10,000 and cost of goods sold was $50,000, how much would Kushman report for cost of goods manufactured?

The management function of organizing and directing is mainly concerned with setting goals and objectives for the entity.

Raw materials are equal to direct materials minus indirect materials.

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Time Value of Money

Filters

Exam 1: Introduction to Financial Statements

Manufacturing costs that cannot be classified as direct materials or direct labor are classified as manufacturing overhead.

A manufacturing company reports cost of goods manufactured as a(n)

Product costs consist of

Which one of the following does not appear on the balance sheet of a manufacturing company?

When the physical association of raw materials with the finished product is too small to trace in terms of cost, they are usually classified as indirect materials.

Internal reports are generally

How have many companies significantly lowered inventory levels and costs?

For a manufacturing company, which of the following is an example of a period cost rather than a product cost?

Financial and managerial accounting are similar in that both

Many companies now focus on reducing defects in finished products with the goal of zero defects.This is called

The product cost that is most difficult to associate with a product is

Direct materials and direct labor of a company total $8,000,000.If manufacturing overhead is $4,000,000, what is direct labor cost?

Which one of the following represents a period cost?

Kushman Combines, Inc.has $20,000 of ending finished goods inventory as of December 31, 2013.If beginning finished goods inventory was $10,000 and cost of goods sold was $50,000, how much would Kushman report for cost of goods manufactured?

The management function of organizing and directing is mainly concerned with setting goals and objectives for the entity.

Raw materials are equal to direct materials minus indirect materials.

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Time Value of Money

Filters