Question 1

The following cost items relate to the Henning Company. Classify each cost as a variable cost or a fixed cost by placing an X in the appropriate column. Each cost should be evaluated in terms of the volume of units of finished products produced. Also indicate with an X for each item if it is a product cost or a period cost.

Accepted Answer

The answer of The following cost items relate to the...

Question 2

Factory overhead includes selling and administrative expenses because they are indirect costs of a product.

Accepted Answer

A) True 
 B)False

Question 3

The salary paid to the assembly line supervisor would normally be classified as:

Accepted Answer

A)   Direct labor.
B)   Indirect labor.
C)   A period cost.
D)   A general cost.
E)   An assembly cost.F) A) and D)
G) B) and E)

Question 4

Duncan Crafts manufactures specialty key chains for tourist attractions. On January 1, the firm had 300 souvenir attraction disks used in the production of the chains that cost $3 each; and 600 completed key chains that cost $6 each. During the year Duncan Crafts purchased 1,500 souvenir disks costing $3 each and produced 1,100 key chains. Compute the total cost of raw materials inventory at December 31.

Accepted Answer

The answer of Duncan Crafts manufactures specialty key chains for...

Question 5

Last year, Gordon Company sold 20,000 units of its only product. If sales decrease by 20% in the current year, how will unit variable cost and total fixed cost be affected?

Accepted Answer

A)   Choice A
B)   Choice B
C)   Choice C
D)   Choice D
E)   Choice EF) A) and C)
G) A) and B)

Question 6

Marshall Corporation incurred costs for materials and labor needed to manufacture its products. These costs are an example of:

Accepted Answer

A)   Period costs.
B)   Product costs.
C)   General costs.
D)   Balance sheet costs.
E)   Capitalized costs.F) A) and B)
G) A) and C)

Question 7

________ is the process of monitoring planning decisions and evaluating an organization's activities and employees.

Accepted Answer

The answer of ________ is the process of monitoring planning...

Question 8

The main difference between the cost of goods sold of a manufacturer and a merchandiser is that the merchandiser includes cost of goods manufactured rather than cost of goods purchased.

Accepted Answer

A) True 
 B)False

Question 9

A manufacturer's total cost of making and finishing products in the period is called:

Accepted Answer

A)   Ending finished goods inventory.
B)   Total manufacturing costs.
C)   Ending work in process inventory.
D)   Cost of goods manufactured.
E)   Cost of goods sold.F) B) and E)
G) B) and D)

Question 10

A manufacturing company's finished goods inventory on January 1 was $68,000; cost of goods manufactured was $147,000; and the December 31 finished goods inventory was $77,000. What is the cost of goods sold for that year?

Accepted Answer

The answer of A manufacturing company's finished goods inventory on...

Question 11

Cost concepts such as variable, fixed, mixed, direct, and indirect apply only to manufacturers and not to service companies.

Accepted Answer

A) True 
 B)False

Question 12

A classification of costs that determines whether a cost is expensed to the income statement or capitalized to inventory is:

Accepted Answer

A)   Fixed versus variable.
B)   Direct versus indirect.
C)   Financial versus managerial.
D)   Service versus manufacturing.
E)   Product versus period.F) C) and D)
G) A) and B)

Question 13

A direct cost is a cost that is:

Accepted Answer

A)   Identifiable as controllable.
B)   Traceable to the company as a whole.
C)   Does not change with the volume of activity.
D)   Traceable to a single cost object.
E)   Traceable to multiple cost objects.F) B) and C)
G) A) and E)

Question 14

Define fraud and give at least two examples of employee fraud.

Accepted Answer

Fraud involves the use of one's job for ...

Question 15

Which of the following should not be included in direct materials costs?

Accepted Answer

A)   Invoice costs of direct materials.
B)   Delivery charges on shipments to customers.
C)   Materials storage costs.
D)   Materials handling costs.
E)   Incoming freight charges.F) A) and D)
G) B) and E)

Question 16

Flexibility of practice when applied to managerial accounting means that:

Accepted Answer

A)   The information must be presented in electronic format so that it is easily changed.
B)   Managers must be willing to accept the information as the accountants present it to them, rather than in the format they ask for.
C)   The managerial accountants need to be on call twenty-four hours a day.
D)   Managerial accounting system differ across companies depending on the nature of the business and the arrangement of its internal operations.
E)   Managers must be flexible with information provided in varying forms and using inconsistent measures.F) B) and D)
G) C) and D)

Question 17

Which of the following is not part of the sales activity in the flow of manufacturing activities?

Accepted Answer

A)   Beginning Finished Goods Inventory.
B)   Cost of Goods Manufactured.
C)   Total Finished Goods available for sale.
D)   Ending Work in Process Inventory.
E)   Cost of Goods Sold.F) A) and E)
G) B) and C)

Question 18

A manufacturing company has a beginning finished goods inventory of $28,300, cost of goods manufactured of $58,500, and an ending finished goods inventory of $27,600. The cost of goods sold for this company is:

Accepted Answer

A)   $114,400.
B)   $57,800.
C)   $2,600.
D)   $86,100.
E)   $59,200.F) A) and B)
G) A) and E)

Question 19

A company's prime costs total $4,500,000 and its conversion costs total $5,500,000. If direct materials are $2,000,000, calculate the overhead costs:

Accepted Answer

A)   $2,500,000.
B)   $3,500,000.
C)   $2,000,000.
D)   $1,000,000.
E)   $3,000,000.F) A) and C)
G) A) and B)

Question 20

Which of the following represents the correct formula for calculating cost of goods manufactured?

Accepted Answer

A)   Direct materials used + direct labor + factory overhead + beginning work in process + ending work in process.
B)   Direct materials used + direct labor + factory overhead + beginning work in process - ending work in process.
C)   Direct materials used + direct labor + factory overhead - beginning work in process + ending work in process.
D)   Direct materials used + direct labor + factory overhead - beginning work in process - ending work in process.
E)   Direct materials used + direct labor - factory overhead + beginning work in process - ending work in process.F) A) and E)
G) B) and C)

Exam 1: Managerial Accounting Concepts and Principles

Cost concepts such as variable, fixed, mixed, direct, and indirect apply only to manufacturers and not to service companies.

Correct Answer
verified

Which of the following should not be included in direct materials costs?

Correct Answer
verified

A manufacturing company's finished goods inventory on January 1 was $68,000; cost of goods manufactured was $147,000; and the December 31 finished goods inventory was $77,000. What is the cost of goods sold for that year?

Correct Answer
verified

Flexibility of practice when applied to managerial accounting means that:

Correct Answer
verified

The main difference between the cost of goods sold of a manufacturer and a merchandiser is that the merchandiser includes cost of goods manufactured rather than cost of goods purchased.

Correct Answer
verified

Marshall Corporation incurred costs for materials and labor needed to manufacture its products. These costs are an example of:

Correct Answer
verified

Define fraud and give at least two examples of employee fraud.

Correct Answer
verified
Fraud involves the use of one's job for ...
View Answer

Factory overhead includes selling and administrative expenses because they are indirect costs of a product.

Correct Answer
verified

The salary paid to the assembly line supervisor would normally be classified as:

Correct Answer
verified

Last year, Gordon Company sold 20,000 units of its only product. If sales decrease by 20% in the current year, how will unit variable cost and total fixed cost be affected?

Correct Answer
verified

A company's prime costs total $4,500,000 and its conversion costs total $5,500,000. If direct materials are $2,000,000, calculate the overhead costs:

Correct Answer
verified

________ is the process of monitoring planning decisions and evaluating an organization's activities and employees.

Correct Answer
verified

A classification of costs that determines whether a cost is expensed to the income statement or capitalized to inventory is:

Correct Answer
verified

Correct Answer
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A direct cost is a cost that is:

Correct Answer
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Which of the following represents the correct formula for calculating cost of goods manufactured?

Correct Answer
verified

A manufacturer's total cost of making and finishing products in the period is called:

Correct Answer
verified

Correct Answer
verified

Which of the following is not part of the sales activity in the flow of manufacturing activities?

Correct Answer
verified

A manufacturing company has a beginning finished goods inventory of $28,300, cost of goods manufactured of $58,500, and an ending finished goods inventory of $27,600. The cost of goods sold for this company is:

Correct Answer
verified

Exam 1: Managerial Accounting Concepts and Principles

Cost concepts such as variable, fixed, mixed, direct, and indirect apply only to manufacturers and not to service companies.

Correct AnswerverifiedShow Answer

Which of the following should not be included in direct materials costs?

Correct AnswerverifiedShow Answer

A manufacturing company's finished goods inventory on January 1 was $68,000; cost of goods manufactured was $147,000; and the December 31 finished goods inventory was $77,000. What is the cost of goods sold for that year?

Correct AnswerverifiedShow Answer

Flexibility of practice when applied to managerial accounting means that:

Correct AnswerverifiedShow Answer

The main difference between the cost of goods sold of a manufacturer and a merchandiser is that the merchandiser includes cost of goods manufactured rather than cost of goods purchased.

Correct AnswerverifiedShow Answer

Marshall Corporation incurred costs for materials and labor needed to manufacture its products. These costs are an example of:

Correct AnswerverifiedShow Answer

Define fraud and give at least two examples of employee fraud.

Correct AnswerverifiedFraud involves the use of one's job for ...View AnswerShow Answer

Factory overhead includes selling and administrative expenses because they are indirect costs of a product.

Correct AnswerverifiedShow Answer

The salary paid to the assembly line supervisor would normally be classified as:

Correct AnswerverifiedShow Answer

Last year, Gordon Company sold 20,000 units of its only product. If sales decrease by 20% in the current year, how will unit variable cost and total fixed cost be affected?

Correct AnswerverifiedShow Answer

A company's prime costs total $4,500,000 and its conversion costs total $5,500,000. If direct materials are $2,000,000, calculate the overhead costs:

Correct AnswerverifiedShow Answer

________ is the process of monitoring planning decisions and evaluating an organization's activities and employees.

Correct AnswerverifiedShow Answer

A classification of costs that determines whether a cost is expensed to the income statement or capitalized to inventory is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A direct cost is a cost that is:

Correct AnswerverifiedShow Answer

Which of the following represents the correct formula for calculating cost of goods manufactured?

Correct AnswerverifiedShow Answer

A manufacturer's total cost of making and finishing products in the period is called:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not part of the sales activity in the flow of manufacturing activities?

Correct AnswerverifiedShow Answer

A manufacturing company has a beginning finished goods inventory of $28,300, cost of goods manufactured of $58,500, and an ending finished goods inventory of $27,600. The cost of goods sold for this company is:

Correct AnswerverifiedShow Answer

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Fraud involves the use of one's job for ...
View Answer

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