Question 1

What would be found on the balance sheet of a manufacturer and NOT on the balance sheet of a service business?

Accepted Answer

A)  cash 
B)  gross profit 
C)  work-in-process 
D)  cost of goods manufactured 
A)  cash 
B)  gross profit 
C)  work-in-process 
D)  cost of goods manufactured

Question 2

What is the formula to calculate operating income?

Accepted Answer

A)  sales revenue - selling and administrative expenses 
B)  gross margin - selling expenses + selling and administrative expenses 
C)  sales revenue - cost of goods sold + selling and administrative expenses 
D)  sales revenue - cost of goods sold - selling and administrative expenses 
A)  sales revenue - selling and administrative expenses 
B)  gross margin - selling expenses + selling and administrative expenses 
C)  sales revenue - cost of goods sold + selling and administrative expenses 
D)  sales revenue - cost of goods sold - selling and administrative expenses

Question 3

A manufacturing business generally reports three types of inventory on its balance sheet.

Accepted Answer

A) True 
 B)False

Question 4

Refer to ComPrint Co. What were the total manufacturing costs for the year?

Accepted Answer

A)  $101,000 
B)  $102,000 
C)  $106,500 
D)  $123,000 
A)  $101,000 
B)  $102,000 
C)  $106,500 
D)  $123,000

Question 5

Econo Company
In July, Econo Company purchased materials costing $21,000 and incurred direct labour cost of $18,000. Manufacturing overhead totalled $32,000 for the month. Information on inventories was as follows: $\begin{array}{lrr}&\text { July } 1& \text { July } 31\
\text { Materials } & \$ 6,200 & \$ 7,100 \
\text { Work-in-process } & \$ 700 & \$ 1,200 \
\text { Finished goods } & \$ 3,300 & \$ 2,700
\end{array}$
-Refer to Econo Company. Suppose the company sold 10,000 units during July and gross margin totalled $29,800. What would be the sales price per unit?

Accepted Answer

A)  $9.94 
B)  $10.00 
C)  $10.09 
D)  $10.11 
A)  $9.94 
B)  $10.00 
C)  $10.09 
D)  $10.11

Question 6

Which statement best describes a main purpose of assigning costs to cost objects?

Accepted Answer

A)  It provides information on why money was spent. 
B)  It records the historical events of the organization. 
C)  It allows management to incorporate products in marketing. 
D)  It facilitates service businesses in following financial regulations. 
A)  It provides information on why money was spent. 
B)  It records the historical events of the organization. 
C)  It allows management to incorporate products in marketing. 
D)  It facilitates service businesses in following financial regulations.

Question 7

What type of cost is direct labour?

Accepted Answer

A)  period cost 
B)  inventoriable cost 
C)  nonproduction cost 
D)  nonmanufacturing cost 
A)  period cost 
B)  inventoriable cost 
C)  nonproduction cost 
D)  nonmanufacturing cost

Question 8

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Cost of engines in the manufacture of airplanes

Accepted Answer

A) Product Cost, Direct Material 
B) Product Cost, Direct Labour 
C) Product Cost, Manufacturing Overhead 
D) Product Cost, Selling Expense 
E) Product Cost, Administrative Expense
F)Period Cost, Direct Material
G)Period Cost, Direct Labour
H)Period Cost, Manufacturing Overhead
I)Period Cost, Selling Expense
J)Period Cost, Administrative Expense 
A) Product Cost, Direct Material 
B) Product Cost, Direct Labour 
C) Product Cost, Manufacturing Overhead 
D) Product Cost, Selling Expense 
E) Product Cost, Administrative Expense
F)Period Cost, Direct Material
G)Period Cost, Direct Labour
H)Period Cost, Manufacturing Overhead
I)Period Cost, Selling Expense
J)Period Cost, Administrative Expense

Question 9

Match each following terms with their correct description from the items listed below.
-A cost that increases in total as output increases

Accepted Answer

A) Period Cost 
B) Direct Cost 
C) Opportunity Cost 
D) Variable Cost 
E) Indirect Cost
F)Fixed Cost
G)Product Cost 
A) Period Cost 
B) Direct Cost 
C) Opportunity Cost 
D) Variable Cost 
E) Indirect Cost
F)Fixed Cost
G)Product Cost

Question 10

Thompson Company, a manufacturing firm, has supplied the following information from its accounting records for the month of November:
Factory supplies used $18,000
Depreciation on factory building 17,000
Salary of company controller 6,000
Factory janitorial costs 5,000
Marketing and promotion 4,500
Direct labour cost 22,000
Purchases of raw materials 10,000
Finished goods inventory, Nov. 1 2,250
Finished goods inventory, Nov. 30 3,750
Work-in-process inventory, Nov. 1 4,200
Work-in-process inventory, Nov. 30 2,750
Materials inventory, Nov. 1 3,500
Materials inventory, Nov. 30 5,100
Required:
A. Prepare a statement of cost of goods manufactured.
B. Prepare a statement of cost of goods sold.

Accepted Answer

Thompson Company
Statement of Cost of Go

Question 11

Refer to Owen Sound Company. Calculate the per-unit prime cost.

Accepted Answer

$516,000 (DM) + $430

Question 12

Match each following terms with their correct description from the items listed below.
-A cost that stays the same in total regardless of changes in output

Accepted Answer

A) Period Cost 
B) Direct Cost 
C) Opportunity Cost 
D) Variable Cost 
E) Indirect Cost
F)Fixed Cost
G)Product Cost 
A) Period Cost 
B) Direct Cost 
C) Opportunity Cost 
D) Variable Cost 
E) Indirect Cost
F)Fixed Cost
G)Product Cost

Question 13

Econo Company
In July, Econo Company purchased materials costing $21,000 and incurred direct labour cost of $18,000. Manufacturing overhead totalled $32,000 for the month. Information on inventories was as follows: $\begin{array}{lrr}&\text { July } 1& \text { July } 31\
\text { Materials } & \$ 6,200 & \$ 7,100 \
\text { Work-in-process } & \$ 700 & \$ 1,200 \
\text { Finished goods } & \$ 3,300 & \$ 2,700
\end{array}$
-Refer to Econo Company. What was the cost of direct materials used in July?

Accepted Answer

A)  $20,100 
B)  $20,500 
C)  $21,000 
D)  $21,900 
A)  $20,100 
B)  $20,500 
C)  $21,000 
D)  $21,900

Question 14

Match each of the following terms with their correct description from the items listed below.
-Cost of partially completed goods

Accepted Answer

A) Income Statement 
B) Cost of Goods Manufactured 
C) Work-in-Process Inventory 
D) Gross Margin 
E) Operating Income 
A) Income Statement 
B) Cost of Goods Manufactured 
C) Work-in-Process Inventory 
D) Gross Margin 
E) Operating Income

Question 15

Which term is used for the cost of the partially completed goods at the end of the period?

Accepted Answer

A)  the cost of goods manufactured 
B)  the ending finished goods inventory 
C)  the ending work-in-process inventory 
D)  the beginning work-in-process inventory 
A)  the cost of goods manufactured 
B)  the ending finished goods inventory 
C)  the ending work-in-process inventory 
D)  the beginning work-in-process inventory

Question 16

Information from the records of Island Timberlands Inc. for November is as follows: Sales $820,000
Selling and administrative expenses 140,000
Direct materials purchases 176,000
Direct labour 200,000
Manufacturing overhead 270,000
Direct materials, November 1 24,000
Work-in-process, November 1 50,000
Finished goods, November 1 46,000
Direct materials, November 30 28,000
Work-in-process, November 30 56,000
Finished goods, November 30 38,000
What is the net income for the month of November?

Accepted Answer

A)  $36,000 
B)  $180,000 
C)  $636,000 
D)  $644,000 
A)  $36,000 
B)  $180,000 
C)  $636,000 
D)  $644,000

Question 17

Match each following terms with their correct formula from the items listed below.
-(direct materials + direct labour)/units produced

Accepted Answer

A) Per-unit prime cost 
B) Per-unit conversion cost 
C) Per-unit cost of goods manufactured 
A) Per-unit prime cost 
B) Per-unit conversion cost 
C) Per-unit cost of goods manufactured

Question 18

Into which two major functional categories are costs subdivided?

Accepted Answer

A)  prime and conversion 
B)  opportunity and direct 
C)  selling and administration 
D)  production and nonproduction 
A)  prime and conversion 
B)  opportunity and direct 
C)  selling and administration 
D)  production and nonproduction

Question 19

Which of the following is included in nonmanufacturing costs?

Accepted Answer

A)  marketing 
B)  direct materials 
C)  indirect materials 
D)  manufacturing overhead 
A)  marketing 
B)  direct materials 
C)  indirect materials 
D)  manufacturing overhead

Question 20

Match each following terms with their correct formula from the items listed below.
-(total manufacturing costs + work-in-process beginning - work-in-process ending)/units produced

Accepted Answer

A) Per-unit prime cost 
B) Per-unit conversion cost 
C) Per-unit cost of goods manufactured 
A) Per-unit prime cost 
B) Per-unit conversion cost 
C) Per-unit cost of goods manufactured

What would be found on the balance sheet of a manufacturer and NOT on the balance sheet of a service business?

What is the formula to calculate operating income?

A manufacturing business generally reports three types of inventory on its balance sheet.

Refer to ComPrint Co. What were the total manufacturing costs for the year?

Which statement best describes a main purpose of assigning costs to cost objects?

What type of cost is direct labour?

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Cost of engines in the manufacture of airplanes

Match each following terms with their correct description from the items listed below. -A cost that increases in total as output increases

Refer to Owen Sound Company. Calculate the per-unit prime cost.

Match each following terms with their correct description from the items listed below. -A cost that stays the same in total regardless of changes in output

Match each of the following terms with their correct description from the items listed below. -Cost of partially completed goods

Which term is used for the cost of the partially completed goods at the end of the period?

Match each following terms with their correct formula from the items listed below. -(direct materials + direct labour)/units produced

Into which two major functional categories are costs subdivided?

Which of the following is included in nonmanufacturing costs?

Match each following terms with their correct formula from the items listed below. -(total manufacturing costs + work-in-process beginning - work-in-process ending)/units produced

Introduction to Managerial Accounting

Cost Behaviour

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Budgeting, Production, Cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

Exam 2: Basic Managerial Accounting Concepts

What would be found on the balance sheet of a manufacturer and NOT on the balance sheet of a service business?

What is the formula to calculate operating income?

A manufacturing business generally reports three types of inventory on its balance sheet.

Refer to ComPrint Co. What were the total manufacturing costs for the year?

Which statement best describes a main purpose of assigning costs to cost objects?

What type of cost is direct labour?

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Cost of engines in the manufacture of airplanes

Match each following terms with their correct description from the items listed below. -A cost that increases in total as output increases

Refer to Owen Sound Company. Calculate the per-unit prime cost.

Match each following terms with their correct description from the items listed below. -A cost that stays the same in total regardless of changes in output

Match each of the following terms with their correct description from the items listed below. -Cost of partially completed goods

Which term is used for the cost of the partially completed goods at the end of the period?

Match each following terms with their correct formula from the items listed below. -(direct materials + direct labour)/units produced

Into which two major functional categories are costs subdivided?

Which of the following is included in nonmanufacturing costs?

Match each following terms with their correct formula from the items listed below. -(total manufacturing costs + work-in-process beginning - work-in-process ending)/units produced

Introduction to Managerial Accounting

Cost Behaviour

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Budgeting, Production, Cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters