Question 1

Which of the following represents the combined sum of direct labor and manufacturing overhead?

Accepted Answer

A) conversion costs 
B) period costs 
C) prime costs 
D) fixed costs 
A) conversion costs 
B) period costs 
C) prime costs 
D) fixed costs

Question 2

Freight costs paid to ship raw materials to a company warehouse are considered product costs.

Accepted Answer

A) True 
 B)False

Question 3

Royal,Inc.purchases each unit of product X for $100 and can sell it in the market for $135.The price of the product for Royal would be $100.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) $178,000 
B) $1,311,000 
C) $1,293,000 
D) $1,275,000 
A) $178,000 
B) $1,311,000 
C) $1,293,000 
D) $1,275,000

Question 5

The income statement of a service company will most likely include ________.

Accepted Answer

A) salaries expense 
B) factory overhead 
C) cost of goods sold 
D) direct materials 
A) salaries expense 
B) factory overhead 
C) cost of goods sold 
D) direct materials

Question 6

Which of the following would be included as manufacturing overhead for a manufacturing company?

Accepted Answer

A) direct materials cost 
B) indirect materials cost 
C) direct labor 
D) advertising 
A) direct materials cost 
B) indirect materials cost 
C) direct labor 
D) advertising

Question 7

Star Health,Inc.is a fitness center in Oklahoma City.In October,the company earned
$550,000 in revenues and incurred the following operating costs from 340 customers:
   
Required: Prepare Star Health's income statement for the month of October.

Accepted Answer

Revenue
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Question 8

Total manufacturing costs to account for during the year minus the ending Work-in-Process Inventory equals the cost of goods manufactured.

Accepted Answer

A) True 
 B)False

Question 9

For a manufacturing company,which of the following is a period cost?

Accepted Answer

A) direct materials used 
B) office rent 
C) wages expense of factory workers 
D) indirect materials used 
A) direct materials used 
B) office rent 
C) wages expense of factory workers 
D) indirect materials used

Question 10

Which of the following is true of Just-in-Time (JIT)Management?

Accepted Answer

A) It results in more storage and insurance costs. 
B) It is a system in which the company produces products only after receiving an order. 
C) It promotes surplus inventory to prevent production shut-down in case of supply interruptions. 
D) It requires a surplus inventory of finished goods to ensure timely,or just-in-time,delivery to customers. 
A) It results in more storage and insurance costs. 
B) It is a system in which the company produces products only after receiving an order. 
C) It promotes surplus inventory to prevent production shut-down in case of supply interruptions. 
D) It requires a surplus inventory of finished goods to ensure timely,or just-in-time,delivery to customers.

Question 11

Partial income statements of Company A and Company B are provided below:
Company A
 
Company B
 
Which of the following statements is true?

Accepted Answer

A) Company A is a merchandising company. 
B) Company B is a manufacturing company. 
C) Company A is a manufacturing company. 
D) Company A is a service company. 
A) Company A is a merchandising company. 
B) Company B is a manufacturing company. 
C) Company A is a manufacturing company. 
D) Company A is a service company.

Question 12

Comparing actual performance to previously budgeted amounts is part of the ________.

Accepted Answer

A) controlling function of managerial accounting 
B) planning function of managerial accounting 
C) reporting function of managerial accounting 
D) organizing function of managerial accounting 
A) controlling function of managerial accounting 
B) planning function of managerial accounting 
C) reporting function of managerial accounting 
D) organizing function of managerial accounting

Question 13

The income statement of a manufacturing company separates the product costs from the period costs.

Accepted Answer

A) True 
 B)False

Question 14

Repair and maintenance costs of vehicles used to deliver products to customers are product costs.

Accepted Answer

A) True 
 B)False

Question 15

Fuchsia,Inc.provides automobile repair services in the local community.The company provides the following information for the month of March:
 
Fuchsia provided services to 1,400 clients in the month of March and generated $24,000 as revenue.
How much is the cost per service? (Round your answer to the nearest cent. )

Accepted Answer

A) $12.89 
B) $3.64 
C) $9.80 
D) $6.46 
A) $12.89 
B) $3.64 
C) $9.80 
D) $6.46

Question 16

Indirect materials costs are included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following formulas represents cost of goods sold for a merchandising business?

Accepted Answer

A) Beginning Merchandise Inventory - Ending Merchandise Inventory = Cost of Goods Sold 
B) Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold 
C) Ending Merchandise Inventory + Purchases and Freight In - Beginning Merchandise Inventory = Cost of Goods Sold 
D) Beginning Merchandise Inventory + Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold 
A) Beginning Merchandise Inventory - Ending Merchandise Inventory = Cost of Goods Sold 
B) Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold 
C) Ending Merchandise Inventory + Purchases and Freight In - Beginning Merchandise Inventory = Cost of Goods Sold 
D) Beginning Merchandise Inventory + Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold

Question 18

Selling and administrative expenses are subtracted from gross profit to obtain operating income.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following correctly describes the accounting for advertising costs?

Accepted Answer

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

Question 20

How is the management of a company accountable to its employees?

Accepted Answer

A) The management must provide products that are safe and free of defects. 
B) The management must provide a safe workplace. 
C) The management must ensure that it earns a net positive return on its investments. 
D) The management must ensure the business is environmentally responsible to its community. 
A) The management must provide products that are safe and free of defects. 
B) The management must provide a safe workplace. 
C) The management must ensure that it earns a net positive return on its investments. 
D) The management must ensure the business is environmentally responsible to its community.

Exam 18: Introduction to Managerial Accounting

Which of the following represents the combined sum of direct labor and manufacturing overhead?

Freight costs paid to ship raw materials to a company warehouse are considered product costs.

Royal,Inc.purchases each unit of product X for $100 and can sell it in the market for $135.The price of the product for Royal would be $100.

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

The income statement of a service company will most likely include ________.

Which of the following would be included as manufacturing overhead for a manufacturing company?

Star Health,Inc.is a fitness center in Oklahoma City.In October,the company earned $550,000 in revenues and incurred the following operating costs from 340 customers: Required: Prepare Star Health's income statement for the month of October.

Total manufacturing costs to account for during the year minus the ending Work-in-Process Inventory equals the cost of goods manufactured.

For a manufacturing company,which of the following is a period cost?

Which of the following is true of Just-in-Time (JIT)Management?

Partial income statements of Company A and Company B are provided below: Company A Company B Which of the following statements is true?

Comparing actual performance to previously budgeted amounts is part of the ________.

The income statement of a manufacturing company separates the product costs from the period costs.

Repair and maintenance costs of vehicles used to deliver products to customers are product costs.

Indirect materials costs are included in manufacturing overhead.

Which of the following formulas represents cost of goods sold for a merchandising business?

Selling and administrative expenses are subtracted from gross profit to obtain operating income.

Which of the following correctly describes the accounting for advertising costs?

How is the management of a company accountable to its employees?

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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