Question 1

Financial reporting is typically much more detailed than managerial accounting.

Accepted Answer

A) True 
 B)False

Question 2

Crystal Inc. is a merchandiser of stone ornaments. The company sold 15,000 units in 2015. The company has provided the following information:   What is the operating income for 2015?

Accepted Answer

A) $183,700 
B) $304,300 
C) $252,700 
D) $257,000 
A) $183,700 
B) $304,300 
C) $252,700 
D) $257,000

Question 3

Crystal Inc. is a merchandiser of stone ornaments. The company sold 15,000 units in 2015. The company has provided the following information:   What is the cost per unit sold?

Accepted Answer

A) $20.29 
B) $15.00 
C) $23.88 
D) $12.25 
A) $20.29 
B) $15.00 
C) $23.88 
D) $12.25

Question 4

Factory rent, taxes, and insurance are included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 5

In a manufacturing firm, advertising and marketing costs are included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

In a manufacturing firm, administrative costs are included in period costs.

Accepted Answer

A) True 
 B)False

Question 8

Period costs are the:

Accepted Answer

A) current assets and liabilities reported on the balance sheet. 
B) costs that are incurred and expensed during the same accounting period. 
C) costs related to production of products the company purchases and sells. 
D) same as manufacturing overhead costs. 
A) current assets and liabilities reported on the balance sheet. 
B) costs that are incurred and expensed during the same accounting period. 
C) costs related to production of products the company purchases and sells. 
D) same as manufacturing overhead costs.

Question 9

Which of the following is true of service companies?

Accepted Answer

A) All of service companies' costs 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. 
A) All of service companies' costs 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 10

Samson Inc. reported the following information for the year 2015:   How much was the unit cost per service?

Accepted Answer

A) $1.56 
B) $3.20 
C) $2.25 
D) $3.81 
A) $1.56 
B) $3.20 
C) $2.25 
D) $3.81

Question 11

Product costs, such as factory overhead, should be treated as an asset until the product is sold.

Accepted Answer

A) True 
 B)False

Question 12

The cost of direct materials cannot easily be traced to the manufactured product, and therefore it is a component of manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 13

Wages of factory janitors is considered non-manufacturing overhead, as these are not directly related to the manufacturing process.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following correctly describes the accounting for indirect labor costs?

Accepted Answer

A) Indirect labor costs are product costs and are expensed as incurred. 
B) Indirect labor costs are period costs and are expensed as incurred. 
C) Indirect labor costs are product costs and are expensed when the manufactured product is sold. 
D) Indirect labor costs are period costs and are expensed when the manufactured product is sold. 
A) Indirect labor costs are product costs and are expensed as incurred. 
B) Indirect labor costs are period costs and are expensed as incurred. 
C) Indirect labor costs are product costs and are expensed when the manufactured product is sold. 
D) Indirect labor costs are period costs and are expensed when the manufactured product is sold.

Question 15

Which of the following is the primary objective of managerial accounting?

Accepted Answer

A) providing information that managers need to make operational decisions 
B) providing historical data to investors and creditors 
C) providing summarized results of operations 
D) providing information to comply with laws and regulations of government bodies 
A) providing information that managers need to make operational decisions 
B) providing historical data to investors and creditors 
C) providing summarized results of operations 
D) providing information to comply with laws and regulations of government bodies

Question 16

Excellent Company sells accounting textbooks. The following information summarizes Excellent's operating activities for 2015:   Required: Prepare Excellent Company's income statement for the year ended December 31, 2015.

Accepted Answer

The answer of Excellent Company sells accounting textbooks. The following...

Question 17

Kyanite Corporation, a manufacturer reports costs for 2015 as follows:   How much is the total period costs of Kyanite?

Accepted Answer

A) $30,000 
B) $80,000 
C) $39,000 
D) $14,000 
A) $30,000 
B) $80,000 
C) $39,000 
D) $14,000

Question 18

Barricades Corporation provided the following information for the year 2015:   What was the amount of manufacturing overhead costs?

Accepted Answer

A) $360,000 
B) $313,000 
C) $90,000 
D) $336,000 
A) $360,000 
B) $313,000 
C) $90,000 
D) $336,000

Question 19

Viva Inc. has provided the following information for the year 2015:   How much is the cost of goods sold?

Accepted Answer

A) $183,000 
B) $1,249,000 
C) $1,234,000 
D) $1,219,000 
A) $183,000 
B) $1,249,000 
C) $1,234,000 
D) $1,219,000

Question 20

Kentucky purchases and sells widgets. The following information summarizes Kentucky's operating activities for 2015:   If Kentucky sold 7,500 units of widgets during 2015, how much is the cost for one widget?

Accepted Answer

A) $50.00 
B) $15.50 
C) $26.36 
D) $16.10 
A) $50.00 
B) $15.50 
C) $26.36 
D) $16.10

Exam 18: Introduction to Managerial Accounting

Financial reporting is typically much more detailed than managerial accounting.

Crystal Inc. is a merchandiser of stone ornaments. The company sold 15,000 units in 2015. The company has provided the following information: What is the operating income for 2015?

Crystal Inc. is a merchandiser of stone ornaments. The company sold 15,000 units in 2015. The company has provided the following information: What is the cost per unit sold?

Factory rent, taxes, and insurance are included in manufacturing overhead.

In a manufacturing firm, advertising and marketing costs are included in manufacturing overhead.

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

In a manufacturing firm, administrative costs are included in period costs.

Period costs are the:

Which of the following is true of service companies?

Samson Inc. reported the following information for the year 2015: How much was the unit cost per service?

Product costs, such as factory overhead, should be treated as an asset until the product is sold.

The cost of direct materials cannot easily be traced to the manufactured product, and therefore it is a component of manufacturing overhead.

Wages of factory janitors is considered non-manufacturing overhead, as these are not directly related to the manufacturing process.

Which of the following correctly describes the accounting for indirect labor costs?

Which of the following is the primary objective of managerial accounting?

Excellent Company sells accounting textbooks. The following information summarizes Excellent's operating activities for 2015: Required: Prepare Excellent Company's income statement for the year ended December 31, 2015.

Kyanite Corporation, a manufacturer reports costs for 2015 as follows: How much is the total period costs of Kyanite?

Barricades Corporation provided the following information for the year 2015: What was the amount of manufacturing overhead costs?

Viva Inc. has provided the following information for the year 2015: How much is the cost of goods sold?

Kentucky purchases and sells widgets. The following information summarizes Kentucky's operating activities for 2015: If Kentucky sold 7,500 units of widgets during 2015, how much is the cost for one widget?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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