Question 1

Which of the following is not a period cost?

Accepted Answer

A) Depreciation on factory equipment 
B) Depreciation on the retail store building 
C) Salesperson salaries 
D) Office supplies used 
A) Depreciation on factory equipment 
B) Depreciation on the retail store building 
C) Salesperson salaries 
D) Office supplies used

Question 2

Which of the following is not a product cost?

Accepted Answer

A) Property tax on the factory building 
B) Advertising 
C) Factory workers' salaries 
D) Indirect materials used in production 
A) Property tax on the factory building 
B) Advertising 
C) Factory workers' salaries 
D) Indirect materials used in production

Question 3

Which of the following is not a characteristic of managerial accounting?

Accepted Answer

A) Reports are used primarily by insiders rather than by persons outside of the business entity. 
B) Its purpose is to assist managers in planning and controlling business operations. 
C) Information must be developed in conformity with generally accepted accounting principles or with income tax regulations. 
D) Information may be tailored to assist in specific managerial decisions. 
A) Reports are used primarily by insiders rather than by persons outside of the business entity. 
B) Its purpose is to assist managers in planning and controlling business operations. 
C) Information must be developed in conformity with generally accepted accounting principles or with income tax regulations. 
D) Information may be tailored to assist in specific managerial decisions.

Question 4

Management accounting reports may provide sufficient means of monitoring,evaluating and rewarding performance.

Accepted Answer

A) True 
 B)False

Question 5

Goods that are still in the production process would be in which account?

Accepted Answer

A) Raw Materials Inventory 
B) Work in Process Inventory 
C) Finished Goods Inventory 
D) Cost of Goods Sold 
A) Raw Materials Inventory 
B) Work in Process Inventory 
C) Finished Goods Inventory 
D) Cost of Goods Sold

Question 6

Costs to repair equipment are considered a direct cost.

Accepted Answer

A) True 
 B)False

Question 7

[The following information applies to the questions displayed below.]
The following information has been taken from the perpetual inventory system of Imperial Mfg.Co.for the month ended September 30:
    
-The total amount of inventory to be included in Imperial 's September 30th balance sheet amounts to:

Accepted Answer

A) $255,000. 
B) $123,000. 
C) $185,000. 
D) Some other amount. 
A) $255,000. 
B) $123,000. 
C) $185,000. 
D) Some other amount.

Question 8

The placing of direct materials into the production process is recorded by an entry crediting:

Accepted Answer

A) Materials Expense. 
B) Raw Materials Inventory. 
C) Work in Process Inventory. 
D) Finished Goods Inventory. 
A) Materials Expense. 
B) Raw Materials Inventory. 
C) Work in Process Inventory. 
D) Finished Goods Inventory.

Question 9

The principal difference between managerial accounting and financial accounting is that managerial accounting information is:

Accepted Answer

A) Prepared by managers. 
B) Intended primarily for use by decision makers inside the business organization. 
C) Prepared in accordance with a set of accounting principles developed by the Institute of Certified Managerial Accountants. 
D) Oriented toward measuring solvency rather than profitability. 
A) Prepared by managers. 
B) Intended primarily for use by decision makers inside the business organization. 
C) Prepared in accordance with a set of accounting principles developed by the Institute of Certified Managerial Accountants. 
D) Oriented toward measuring solvency rather than profitability.

Question 10

The James Company has incurred the following costs of production:
Direct Materials $350,000;
Direct Labor $475,000;
Manufacturing Overhead $722,000;and
Selling and Administrative Costs $256,000.
The James Company prime costs are $606,000.

Accepted Answer

A) True 
 B)False

Question 11

[The following information applies to the questions displayed below.]
The following information has been taken from the perpetual inventory system of Imperial Mfg.Co.for the month ended September 30:
    
-Alton Company produces metal belts.During the current month,the company incurred the following product costs: Raw materials $100,000;
Direct labor $75,000;
Electricity used in the Factory $25,000;
Factory foreperson salary $3,750;and
Maintenance of factory machinery $2,000.
Alton Company's indirect product costs totaled:

Accepted Answer

A) $175,000. 
B) $30,750. 
C) $75,000. 
D) $28,750. 
A) $175,000. 
B) $30,750. 
C) $75,000. 
D) $28,750.

Question 12

All of the following are true regarding benchmark studies except:

Accepted Answer

A) The studies are shared with customers and suppliers. 
B) The studies are shared with competitors. 
C) The studies are prepared by collecting information from companies in the same industry. 
D) The studies show an organization how its costs and processes compare with other companies. 
A) The studies are shared with customers and suppliers. 
B) The studies are shared with competitors. 
C) The studies are prepared by collecting information from companies in the same industry. 
D) The studies show an organization how its costs and processes compare with other companies.

Question 13

In comparison with a financial statement prepared in conformity with generally accepted accounting principles,a managerial accounting report is more likely to:

Accepted Answer

A) Be used by decision makers outside of the business organization. 
B) Focus upon the operating results of the most recently completed accounting period. 
C) View the entire organization as the reporting entity. 
D) Be tailored to the specific needs of an individual decision maker. 
A) Be used by decision makers outside of the business organization. 
B) Focus upon the operating results of the most recently completed accounting period. 
C) View the entire organization as the reporting entity. 
D) Be tailored to the specific needs of an individual decision maker.

Question 14

The ending inventory of a merchandising company corresponds most closely to which of the following amounts of a manufacturer?

Accepted Answer

A) Ending inventory of finished goods 
B) Cost of finished goods manufactured 
C) Ending inventory of work in process 
D) Total manufacturing costs incurred during the period 
A) Ending inventory of finished goods 
B) Cost of finished goods manufactured 
C) Ending inventory of work in process 
D) Total manufacturing costs incurred during the period

Question 15

Until the related goods are sold,product costs are viewed as:

Accepted Answer

A) Assets. 
B) Liabilities. 
C) Operating expenses. 
D) Manufacturing overhead. 
A) Assets. 
B) Liabilities. 
C) Operating expenses. 
D) Manufacturing overhead.

Question 16

The accountant for Eric's Plumbing Equipment Company recently made a journal entry consisting of a debit to Work in Process and a credit to Raw Materials Inventory.This entry recorded:

Accepted Answer

A) The use of raw materials in the production process. 
B) Payment for raw materials. 
C) The return of unused materials to inventory. 
D) The receipt of raw materials from the company's supplier. 
A) The use of raw materials in the production process. 
B) Payment for raw materials. 
C) The return of unused materials to inventory. 
D) The receipt of raw materials from the company's supplier.

Question 17

Depreciation on a manufacturing facility is considered a period cost whereas depreciation on a warehouse used to store finished goods is considered a product cost.

Accepted Answer

A) True 
 B)False

Question 18

Grand Co.'s ending inventory of work in process is twice as large as at the beginning of the period.Therefore:

Accepted Answer

A) The ending inventory of finished goods must be larger than the beginning inventory of finished goods. 
B) Total manufacturing costs for the period must exceed the cost of finished goods manufactured. 
C) Total manufacturing costs for the period must exceed the cost of goods sold. 
D) The cost of finished goods manufactured must be smaller than the cost of goods sold. 
A) The ending inventory of finished goods must be larger than the beginning inventory of finished goods. 
B) Total manufacturing costs for the period must exceed the cost of finished goods manufactured. 
C) Total manufacturing costs for the period must exceed the cost of goods sold. 
D) The cost of finished goods manufactured must be smaller than the cost of goods sold.

Question 19

Amounts credited to the Work in Process inventory account may best be described as:

Accepted Answer

A) The cost of finished goods manufactured. 
B) Total manufacturing costs charged to production. 
C) The cost of goods sold. 
D) Direct materials purchased,direct labor costs paid,and payments for items classified as manufacturing overhead. 
A) The cost of finished goods manufactured. 
B) Total manufacturing costs charged to production. 
C) The cost of goods sold. 
D) Direct materials purchased,direct labor costs paid,and payments for items classified as manufacturing overhead.

Question 20

The completion of a computer by First Wireless,Inc.would require a debit to which of the following accounts?

Accepted Answer

A) Cost of Goods Sold 
B) Work in Process Inventory 
C) Finished Goods Inventory 
D) Materials Inventory 
A) Cost of Goods Sold 
B) Work in Process Inventory 
C) Finished Goods Inventory 
D) Materials Inventory

Exam 16: Management Accounting

Which of the following is not a period cost?

Which of the following is not a product cost?

Which of the following is not a characteristic of managerial accounting?

Management accounting reports may provide sufficient means of monitoring,evaluating and rewarding performance.

Goods that are still in the production process would be in which account?

Costs to repair equipment are considered a direct cost.

The placing of direct materials into the production process is recorded by an entry crediting:

The principal difference between managerial accounting and financial accounting is that managerial accounting information is:

The James Company has incurred the following costs of production: Direct Materials $350,000; Direct Labor $475,000; Manufacturing Overhead $722,000;and Selling and Administrative Costs $256,000. The James Company prime costs are $606,000.

All of the following are true regarding benchmark studies except:

In comparison with a financial statement prepared in conformity with generally accepted accounting principles,a managerial accounting report is more likely to:

The ending inventory of a merchandising company corresponds most closely to which of the following amounts of a manufacturer?

Until the related goods are sold,product costs are viewed as:

The accountant for Eric's Plumbing Equipment Company recently made a journal entry consisting of a debit to Work in Process and a credit to Raw Materials Inventory.This entry recorded:

Depreciation on a manufacturing facility is considered a period cost whereas depreciation on a warehouse used to store finished goods is considered a product cost.

Grand Co.'s ending inventory of work in process is twice as large as at the beginning of the period.Therefore:

Amounts credited to the Work in Process inventory account may best be described as:

The completion of a computer by First Wireless,Inc.would require a debit to which of the following accounts?

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

the Time Value of Money: Future Amounts and Present Values

Forms of Business Organization

Filters