Question 1

Which of the following are the fixed costs relative to the number of units produced and sold?

Accepted Answer

Store rent Managers Salary  Straight line depreciation

Question 2

Behavior

Accepted Answer

Classification of costs as variable or fixed

Question 3

Costs which are tangible components of the finished product are called

Accepted Answer

Direct Materials

Question 4

Inventory which is completed but not yet sold by a manufacturer is known as

Accepted Answer

Finished goods inventory

Question 5

The following items would be included in the overhead section of the schedule of cost of goods manufactured

Accepted Answer

Factory supplies used Factory utilities Factory insurance

Question 6

Match the following characteristics to the type of accounting:  -Used by investors when making stock purchase decisions -Information reviewed by external auditors -Used by creditors when making loan approval decisions -Focuses on company as a whole

Accepted Answer

Financial

Question 7

Match the following characteristics to the type of accounting:  -Regularly uses predictions -Information reviewed by internal auditors -Includes nonfinancial items such as on-time deliveries and product quality

Accepted Answer

Managerial

Question 8

Raw materials inventory includes all of the following

Accepted Answer

-Direct materials -Indirect materials

Question 9

A _____ company does not have any inventory held for sale, while a merchandising company does have merchandise for sale

Accepted Answer

Service

Question 10

A manufacturing company reports the following items:  Finished goods inventory, beginning balance: $1,000 Finished goods inventory, ending balance: $1,200 Cost of goods manufactured, $5,000  The cost of goods sold is:

Accepted Answer

$4,800  Cost of goods sold = Beginning finished goods inventory + Cost of goods manufacturing - Ending finished goods inventory

Question 11

Consider a company that manufactures automobiles. Which of the following costs would be considered direct labor?  A. Salary of the accounting manager B. Salary of production supervisor C. Wages of factory maintenance worker D. Wages of assembly line workers

Accepted Answer

D. Wages of assembly line workers

Question 12

Each of the following are examples of factory overhead:

Accepted Answer

Indirect labor Indirect materials

Question 13

The efforts of employees who work directly to convert direct materials into finished product are referred to as

Accepted Answer

Direct labor

Question 14

Inventory which is partially complete is known as

Accepted Answer

work in process

Question 15

Financial accounting provides information for (internal/external) _____________ decision makers, while managerial accounting provides information for (internal/external)____________ decision makers.

Accepted Answer

Financial - external Managerial - internal

Question 16

Which of the following are inventory accounts commonly found in manufacturing companies?  Raw materials inventory Work in process inventory Merchandise inventory Goods for sale inventory Finished goods inventory

Accepted Answer

Raw materials inventory Work in process inventory Finished goods inventory

Question 17

Which of the following are the fixed costs relative to the number of units produced and sold?  (check all that apply)  Manager\'s salary Commissions based on sales Store rent Straight-line depreciation

Accepted Answer

Manager\'s Salary Store rent Straight-line depreciation

Question 18

Match the following activity to the appropriate accounting trend:  Survey customers to better align operating practices with their expectations

Accepted Answer

Customer orientation

Question 19

Match the following activity to the appropriate accounting trend:  Updating the company\'s website to promote online sales transactions

Accepted Answer

E-commerce

Question 20

Match the following activity to the appropriate accounting trend:  Establishing better relationships with vendors to ensure on-time delivery of quality raw materials

Accepted Answer

JIT manufacturing

Question 21

Match the following activity to the appropriate accounting trend:  Evaluating business activities with a focus on improving quality

Accepted Answer

TQM

Question 22

A company reported Cost of goods manufactured of $55,000 on the manufacturing statement. If the beginning balance in Work in process inventory was $5,000 and the Total manufacturing costs were $60,000, then the ending balance in Work in process inventory was $_______ ?

Accepted Answer

$10,000  Manufacturing costs (60,000) + beginning Work in process inventory (5,000) - ending Work in process inventory = Cost of goods manufactured (55,000)

Question 23

Direct and indirect materials are known as

Accepted Answer

Raw materials

Question 24

Which of the following characteristics describe managerial accounting?  Many projections and estimates External users Used to make planning and control decisions Emphasis on whole organization Controlled by GAAP

Accepted Answer

Many projections and estimates Used to make planning and control decisions

Question 25

Inventory account used by manufacturing companies to record cost of completed products ready for sale is called:

Accepted Answer

finished goods inventory

Question 26

Which of the following are the variable costs relative to number of units produced and sold?  Materials used in production Commissions based on sales Property tax Insurance premiums

Accepted Answer

Materials used in production Commissions based on sales

Question 27

Activities such as selling and storing finished products are considered _____ activities

Accepted Answer

sales

Question 28

Conversion costs consist of:  -factory overhead and direct labor -direct labor and direct materials -factory overhead and direct materials

Accepted Answer

factory overhead and direct labor

Question 29

Activities such as purchasing and storing raw materials are considered _____ activities

Accepted Answer

materials

Question 30

Managerial accounting has which of the following characteristics?   -Focus on historical information -Monetary and nonmonetary information -Emphasis on projects, processes, and subdivisions -Information available only after audit complete -Internal users

Accepted Answer

-Monetary and nonmonetary information -Emphasis on projects, processes, and subdivisions -Internal users

Question 31

Consider the production department of a manufacturer of laptop computers. Classify the cost of the processor chips. (Check all that apply)  -Product -Direct -Period -Variable -Fixed -Indirect

Accepted Answer

-Product -Direct -Variable

Question 32

What types of information does managerial accounting provide?  -Non-financial -Information for external decision makers -Information for internal decision makers -Financial

Accepted Answer

-Non-financial -Information for internal decision makers -Financial

Question 33

The primary difference between the income statement for a merchandising company and a manufacturing statement is the _____ section.

Accepted Answer

cost of goods sold

Question 34

The main difference between a manufacturer\'s and merchandiser\'s balance sheet is in the _____

Accepted Answer

inventory account

Question 35

A company reported Cost of goods manufactured of $50,000 on the statement of cost of goods manufactured. If the beginning balance in Work in process inventory was $20,000 and the ending balance was $25,000, then the total manufacturing costs were:

Accepted Answer

Manufacturing costs + beginning Work in process inventory - ending Work in process inventory = Cost of goods manufactured  X + 20,000 - 25,000 = 50,000  - 20,000 +25,000 + 50,000 = 55,000

Question 36

Managerial accounting systems are  a. flexible b. rigid c. standardized

Accepted Answer

a. flexible

Question 37

Which of the following are period costs for a manufacturer  -Wages for administrative staff -Sales commissions -Rent on the office building -Utilities for the manufacturing plant -Wages for factory labor

Accepted Answer

-Wages for administrative staff -Sales commissions -Rent on the office building  (Period costs are non-production costs and are usually more associated with activities linked to a time period than with completed products.

Question 38

Major Manufacturing Company has direct materials used of $50,000, beginning raw materials inventory of $10,000 and ending raw materials inventory of $8,000. Compute the raw materials inventory turnover.

Accepted Answer

5.55  Raw materials inventory turnover = Raw materials used/Average raw materials inventory   Average raw materials inventory (10000 + 8000 / 2 = 9000)  50,000/9,000 = 5.55

Question 39

Which of the following are indirect costs for the finishing department of a furniture manufacturing plant?  -Finishing department manager\'s salary -Rent on the manufacturing facility -Plant manager\'s salary -Electricity cost for the plant

Accepted Answer

-Rent on the manufacturing facility -Plant manager\'s salary -Electricity cost for the plant

Question 40

A manufacturing company reports the following items:  Work in process inventory, beginning balance: $500; Work in process inventory, ending balance: $200; Direct materials: $700; Direct labor: $600; Factory overhead: $100  The cost of goods manufactured is?

Accepted Answer

$1700  Direct materials+ Direct labor + Factory overhead +  Beginning balance Work in process inventory - Ending balance work in process inventory  (700 + 600 + 100 + 500 - 200 = 1700)

Question 41

List the following documents in the order in which they are used when recording indirect labor costs in job order costing, with the first document on top.

Accepted Answer

1. time tickets 2. factory overhead ledger 3. allocated to specific jobs through factory overhead

Question 42

The journal entry to record indirect materials in production is to:

Accepted Answer

Debit Factory Overhead and credit Raw Materials inventory

Question 43

A company has a predetermined overhead rate of 50% of direct labor costs. Job 62 incurs $560 in labor costs. Overhead allocated to Job 62 will be...

Accepted Answer

$280  (50% x $560 = $280)

Question 44

Job cost sheets can be used to:

Accepted Answer

Monitor costs incurred to date and to predict and control costs for each job  Provide a subsidiary ledger for the Finished Goods Inventory account  Provide a permanent record for the Cost of Goods Sold account

Question 45

Match the following overhead activity to the correct time period:  Calculate the predetermined overhead rate

Accepted Answer

At the start of the accounting period

Question 46

Match the following overhead activity to the correct time period:  Allocate overhead to jobs

Accepted Answer

During the accounting period

Question 47

Match the following overhead activity to the correct time period:  Adjust overhead account for over-or underapplied overhead

Accepted Answer

At the end of the accounting period

Question 48

The characteristics of cost accounting systems include which of the following?  a. They are used to record costs of selling activities  b. They are used with periodic inventory systems.  c. They generate timely and accurate inventory information.

Accepted Answer

c. They generate timely and accurate inventory information.

Question 49

Journal entries for materials used in production are posted to:

Accepted Answer

-general ledger accounts -subsidiary records

Question 50

List the following documents in the order which they are used when recording direct materials costs in job order cost accounting, with the first document on top

Accepted Answer

1. Receiving reports 2. Materials ledger cards 3. Materials requisitions 4. Job cost sheets

Question 51

Match the activity to its affect on the general ledger accounts:  Allocate overhead costs to jobs

Accepted Answer

Credit Factory Overhead

Question 52

Match the activity to its affect on the general ledger accounts:  Pay factory utilities

Accepted Answer

Debit Factory Overhead

Question 53

Match the activity to its affect on the general ledger accounts:  Purchase indirect materials

Accepted Answer

Debit Raw Materials Inventory

Question 54

Match the activity to its affect on the general ledger accounts:  Use indirect materials

Accepted Answer

Credit Raw Materials Inventory

Question 55

Match the activity to its affect on the general ledger accounts:  Direct labor used

Accepted Answer

Debit Work in Process Inventory

Question 56

Job order production is most likely used by companies that produce:  a. chocolate chip cookies b. cake pans c. customized wedding cakes d. cookie sheets

Accepted Answer

c. customized wedding cakes

Question 57

A company uses direct labor hours as its allocation base. Management estimates the company will have 10,000 hours of direct labor during the year and total overhead costs of $120,000. The predetermined overhead rate will be :

Accepted Answer

$12 per hour  This rate equals the estimated overhead costs divided by the estimated activity base

Question 58

The journal entry to record the purchase of materials is to:

Accepted Answer

debit Raw Materials Inventory and credit Accounts Payable

Question 59

The cost accounting system which is used when producing customized products is called ____ order production

Accepted Answer

job

Question 60

If the factory overhead is overapplied, then:

Accepted Answer

applied overhead costs>actual overhead costs  the Factory Overhead account has a credit balance

Question 61

Match the following activity to its affect on the general ledger account  Allocate indirect labor

Accepted Answer

Credit Factory Wages Payable

Question 62

Match the following activity to its affect on the general ledger account  Pay factory property tax

Accepted Answer

Debit Factory Overhead

Question 63

Match the following overhead activity to the correct time period:  Allocate overhead to jobs

Accepted Answer

During the accounting period

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