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Question 1 1 pts Managerial accounting: <br>
Managerial accounting:
has its primary emphasis on the future.
is required by regulatory bodies such as the SEC.
focuses on the organization as a whole, rather than on the organization’s segments.
Responses a, b, and c are all correct.
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Question 2 1 pts Skip to question text.
Which of the following statements are true regarding financial and managerial accounting?
I. Both are mandatory.
II. Both rely on the same underlying financial data.
III. Both emphasize the segments of an organization, rather than just looking at the organization as a whole.
IV. Both are geared to the future, rather than to the past.
I, II, III, and IV
Only II, III and IV
Only II and III
Only II
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Question 3 1 pts Managerial accounting places considerable weight on: <br>
Managerial accounting places considerable weight on:
generally accepted accounting principles.
the financial history of the entity.
ensuring that all transactions are properly recorded.
detailed segment reports about departments, products, and customers.
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Question 4 1 pts The benefits of a successful Just-In-Time system include all of the following except: <br>
The benefits of a successful Just-In-Time system include all of the following except:
funds tied up in inventories are released for use elsewhere.
inventory buffers are increased.
throughput time is reduced.
defect rates are decreased.
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Question 5 1 pts A key concept of the JIT inventory system is: <br>
A key concept of the JIT inventory system is:
the raw materials, work in process, and finished goods inventories of manufacturing companies act as buffers so that operations can proceed smoothly even if suppliers are late with deliveries or a department is unable to operate for a brief period due to breakdowns or other reasons.
the use of many suppliers so as to ensure rapid delivery of materials for production.
the maintenance of a stock of raw materials so that defective materials can be replaced quickly so as to maintain a high rate of productivity.
inventories are costly to carry and can be kept to minimum levels or eliminated completely with careful planning.
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Question 6 1 pts The just in time (JIT) concept applies to which of the following:<br><br> I. The acquisition of raw materials.<br> II. The assembly of manufactured parts in products.<br> III. The shipment of finished products to customers. <br>
The just in time (JIT) concept applies to which of the following:
I. The acquisition of raw materials.
II. The assembly of manufactured parts in products.
III. The shipment of finished products to customers.
I.
I, III.
I, II, III.
II, III.
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Question 7 1 pts The flow of goods through a JIT system is based on: <br>
The flow of goods through a JIT system is based on:
a workstation efficiently completing its processing of a batch of units so that the units can proceed forward to the next workstation before the next workstation is ready to receive them.
processing goods in large batch sizes rather than less economical small batches.
maintaining a stockpile of raw materials in anticipation of materials shortages.
producing to meet customer demand with no buildup of inventory at any point in the production process.
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Question 8 1 pts A successful JIT system is based upon which of the following concepts? <br>
A successful JIT system is based upon which of the following concepts?
The company must rely upon a large number of suppliers to ensure frequent deliveries of small lots.
The company should always choose those suppliers offering the lowest prices.
The company should avoid long-term contracts with suppliers so as to exert pressure on suppliers to make prompt and frequent deliveries.
A small number of suppliers make frequent deliveries of specific quantities thus avoiding the buildup of large inventories of materials on hand.
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Question 9 1 pts A danger in Process Reengineering is that: <br>
A danger in Process Reengineering is that:
non-value-added activities may be eliminated.
some resources may no longer be required.
employee morale may suffer.
all of the above.
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Question 10 1 pts The <i>Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management</i> contains a policy regarding confidentiality that requires that management accountants: <br>
The Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management contains a policy regarding confidentiality that requires that management accountants:
refrain from disclosing confidential information acquired in the course of their work except when authorized by management.
refrain from disclosing confidential information acquired in the course of their work in all situations.
refrain from disclosing confidential information acquired in the course of their work except when authorized by management, unless legally obligated to do so.
refrain from disclosing confidential information acquired in the course of their work in all cases since the law requires them to do so.
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Question 11 1 pts Skip to question text.
The Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management states that significant ethical issues should be discussed first with an immediate superior unless the superior is involved. If satisfactory resolution cannot be achieved when the problem is initially presented, then the issues should be:
submitted to the next higher managerial level.
submitted to the chief executive officer of the firm.
submitted to the audit committee, executive committee, board of directors, or owners.
submitted to outside legal counsel.
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Question 12 1 pts The corporate controller’s salary would be considered a(n): <br>
The corporate controller’s salary would be considered a(n):
manufacturing cost.
product cost.
administrative cost.
selling expense.
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Question 13 1 pts The cost of fire insurance for a manufacturing plant is generally considered to be a: <br>
The cost of fire insurance for a manufacturing plant is generally considered to be a:
product cost.
period cost.
variable cost.
all of the above.
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Question 14 1 pts Each of the following would be a period cost except: <br>
Each of the following would be a period cost except:
the salary of the company president’s secretary.
the cost of a general accounting office.
depreciation of a machine used in manufacturing.
sales commissions.
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Question 15 1 pts For a manufacturing company, which of the following is an example of a period rather than a product cost? <br>
For a manufacturing company, which of the following is an example of a period rather than a product cost?
Depreciation of factory equipment.
Wages of salespersons.
Wages of machine operators.
Insurance on factory equipment.
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Question 16 1 pts Which of the following would be considered a product cost for external financial reporting purposes? <br>
Which of the following would be considered a product cost for external financial reporting purposes?
Cost of a warehouse used to store finished goods.
Cost of guided public tours through the company’s facilities.
Cost of travel necessary to sell the manufactured product.
Cost of sand spread on the factory floor to absorb oil from manufacturing machines.
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Question 17 1 pts Which of the following would NOT be treated as a product cost for external financial reporting purposes? <br>
Which of the following would NOT be treated as a product cost for external financial reporting purposes?
Depreciation on a factory building.
Salaries of factory workers.
Indirect labor in the factory.
Advertising expenses.
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Question 18 1 pts Transportation costs incurred by a manufacturing company to ship its product to its customers would be classified as which of the following? <br>
Transportation costs incurred by a manufacturing company to ship its product to its customers would be classified as which of the following?
Product cost
Manufacturing overhead
Period cost
Administrative cost
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Question 19 1 pts Micro Computer Company has set up a toll-free telephone line for customer inquiries regarding computer hardware produced by the company. The cost of this toll-free line would be classified as which of the following? <br>
Micro Computer Company has set up a toll-free telephone line for customer inquiries regarding computer hardware produced by the company. The cost of this toll-free line would be classified as which of the following?
Product cost
Manufacturing overhead
Direct labor
Period cost
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Question 20 1 pts wages of factory maintenance personnel would usually be considered to be:<br><br><u>Indirect labor</u>; <u>Manufacturing overhead</u> <br>
wages of factory maintenance personnel would usually be considered to be:
Indirect labor; Manufacturing overhead
No; Yes
Yes; No
Yes; Yes
No; No
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Question 21 1 pts Direct materials are a part of:<br><br><u>Conversion cost</u>; <u>Manufacturing cost</u>; <u>Prime cost</u> <br>
Direct materials are a part of:
Conversion cost; Manufacturing cost; Prime cost
Yes; Yes; No
Yes; Yes; Yes
No; Yes; Yes
No; No; No
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Question 22 1 pts Manufacturing overhead consists of: <br>
Manufacturing overhead consists of:
all manufacturing costs.
all manufacturing costs, except direct materials and direct labor.
indirect materials but not indirect labor.
indirect labor but not indirect materials.
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Question 23 1 pts Which of the following should NOT be included as part of manufacturing overhead at a company that makes office furniture? <br>
Which of the following should NOT be included as part of manufacturing overhead at a company that makes office furniture?
sheet steel in a file cabinet made by the company.
manufacturing equipment depreciation.
idle time for direct labor.
taxes on a factory building.
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Question 24 1 pts Rossiter Company failed to record a credit sale at the end of the year, although the reduction in finished goods inventories was correctly recorded when the goods were shipped to the customer. Which one of the following statements is correct? <br>
Rossiter Company failed to record a credit sale at the end of the year, although the reduction in finished goods inventories was correctly recorded when the goods were shipped to the customer. Which one of the following statements is correct?
Accounts receivable was not affected, inventory was not affected, sales were understated, and cost of goods sold was understated.
Accounts receivable was understated, inventory was overstated, sales were understated, and cost of goods sold was overstated.
Accounts receivable was not affected, inventory was understated, sales were understated, and cost of goods sold was understated.
Accounts receivable was understated, inventory was not affected, sales were understated, and cost of goods sold was not affected.
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Question 25 1 pts If the cost of goods sold is greater than the cost of goods manufactured, then: <br>
If the cost of goods sold is greater than the cost of goods manufactured, then:
work in process inventory has decreased during the period.
finished goods inventory has increased during the period.
total manufacturing costs must be greater than cost of goods manufactured.
finished goods inventory has decreased during the period.
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Question 26 1 pts Skip to question text.
Last month, when 10,000 units of a product were manufactured, the cost per unit was $60. At this level of activity, variable costs are 50% of total unit costs. If 10,500 units are manufactured next month and cost behavior patterns remain unchanged the:
total variable cost will remain unchanged.
fixed costs will increase in total.
variable cost per unit will increase.
total cost per unit will decrease.
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Question 27 1 pts Variable cost: <br>
Variable cost:
increases on a per unit basis as the number of units produced increases.
remains constant on a per unit basis as the number of units produced increases.
remains the same in total as production increases.
decreases on a per unit basis as the number of units produced increases.
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Question 28 1 pts Within the relevant range, the difference between variable costs and fixed costs is: <br>
Within the relevant range, the difference between variable costs and fixed costs is:
variable costs per unit fluctuate and fixed costs per unit remain constant.
variable costs per unit are constant and fixed costs per unit fluctuate.
both total variable costs and total fixed costs are constant.
both total variable costs and total fixed costs fluctuate.
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Question 29 1 pts Which of the following statements regarding fixed costs is incorrect? <br>
Which of the following statements regarding fixed costs is incorrect?
Expressing fixed costs on a per unit basis usually is the best approach for decision making.
Fixed costs expressed on a per unit basis will react inversely with changes in activity.
Assumptions by accountants regarding the behavior of fixed costs rest heavily on the concept of the relevant range.
Fixed costs frequently represent long-term investments in property, plant, and equipment.
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Question 30 1 pts An opportunity cost is: <br>
An opportunity cost is:
the difference in total costs which results from selecting one alternative instead of another.
the benefit forgone by selecting one alternative instead of another.
a cost which may be saved by not adopting an alternative.
a cost which may be shifted to the future with little or no effect on current operations.
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Question 31 1 pts Which of the following costs is often important in decision making, but is omitted from conventional accounting records? <br>
Which of the following costs is often important in decision making, but is omitted from conventional accounting records?
Fixed cost.
Sunk cost.
Opportunity cost.
Indirect cost.
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Question 32 1 pts When a decision is made among a number of alternatives, the benefit that is lost by choosing one alternative over another is the: <br>
When a decision is made among a number of alternatives, the benefit that is lost by choosing one alternative over another is the:
realized cost.
opportunity cost.
conversion cost.
accrued cost.
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Question 33 1 pts Conversion cost consists of which of the following? <br>
Conversion cost consists of which of the following?
Manufacturing overhead cost.
Direct materials and direct labor cost.
Direct labor cost.
Direct labor and manufacturing overhead cost.
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Question 34 1 pts Which one of the following costs should NOT be considered an indirect cost of serving a particular customer at a Dairy Queen fast food outlet? <br>
Which one of the following costs should NOT be considered an indirect cost of serving a particular customer at a Dairy Queen fast food outlet?
the cost of the hamburger patty in the burger they ordered.
the wages of the employee who takes the customer’s order.
the cost of heating and lighting the kitchen.
the salary of the outlet’s manager.
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Question 35 1 pts Skip to question text.
Green Company’s costs for the month of August were as follows: direct materials, $27,000; direct labor, $34,000; sales salaries, $14,000; indirect labor, $10,000; indirect materials, $15,000; general corporate administrative cost, $12,000; taxes on manufacturing facility, $2,000; and rent on factory, $17,000. The beginning work in process inventory was $16,000 and the ending work in process inventory was $9,000. What was the cost of goods manufactured for the month?
$105,000
$132,000
$138,000
$112,000
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Question 36 1 pts Skip to question text.
A manufacturing company prepays its insurance coverage for a three-year period. The premium for the three years is $2,700 and is paid at the beginning of the first year. Eighty percent of the premium applies to manufacturing operations and 20% applies to selling and administrative activities. What amounts should be considered product and period costs respectively for the first year of coverage?
Product; Period
$2,700; $0
$2,160; $ 540
$1,440; $360
$720; $180
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Question 37 1 pts Skip to question text.
Using the following data, calculate the beginning work in process inventory.
Cost of goods sold: $70
Direct labor: $20
Direct materials: $15
Cost of goods manufactured: $80
Work in process ending: $10
Finished goods ending: $15
Manufacturing overhead: $30
The beginning work in process inventory is:
$20.
$15.
$55.
$25.
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Question 38 1 pts Skip to question text.
During the month of May, Bennett Manufacturing Company purchased $43,000 of raw materials. The manufacturing overhead totaled $27,000 and the total manufacturing costs were $106,000. Assuming a beginning inventory of raw materials of $8,000 and an ending inventory of raw materials of $6,000, direct labor must have totaled:
$34,000.
$38,000.
$36,000.
$45,000.
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Question 39 1 pts Skip to question text.
Using the following data for January, calculate the cost of goods manufactured:
Direct materials: $38,000
Direct labor: $24,000
Manufacturing overhead: $17,000
Beginning work in process inventory: $10,000
Ending work in process inventory: $11,000
The cost of goods manufactured was:
$89,000.
$78,000.
$79,000.
$80,000.
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Question 40 1 pts Skip to question text.
During the month of June, Reardon Company incurred $17,000 of direct labor, $8,500 of manufacturing overhead and purchased $15,000 of raw materials. Between the beginning and the end of the month, the raw materials inventory increased by $2,000, the finished goods inventory increased by $1,500, and the work in process inventory decreased by $3,000. The cost of goods manufactured would be:
$38,500.
$40,500.
$41,500.
$43,500.
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Question 41 1 pts Williams Company’s direct labor cost is 25% of its conversion cost. If the Manufacturing overhead cost for the last period was $45,000 and the direct materials cost was $25,000, the direct labor cost was: <br>
Williams Company’s direct labor cost is 25% of its conversion cost. If the Manufacturing overhead cost for the last period was $45,000 and the direct materials cost was $25,000, the direct labor cost was:
$15,000.
$60,000.
$33,333.
$20,000.
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Question 42 1 pts The Lyons Company’s cost of goods manufactured was $120,000 when its sales were $360,000 and its gross margin was $220,000. If the ending inventory of finished goods was $30,000, the beginning inventory of finished goods must have been: <br>
The Lyons Company’s cost of goods manufactured was $120,000 when its sales were $360,000 and its gross margin was $220,000. If the ending inventory of finished goods was $30,000, the beginning inventory of finished goods must have been:
$20,000.
$50,000.
$110,000.
$150,000.
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Question 43 1 pts Skip to question text.
The gross margin for Cushing Company for the first quarter of last year was $325,000 when sales were $700,000. The beginning inventory of finished goods was $60,000 and the ending inventory of finished goods was $85,000. The cost of goods manufactured for the first quarter would have been:
$375,000.
$350,000.
$400,000.
$385,000.
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Question 44 1 pts Skip to question text.
Last month a manufacturing company had the following operating results:
Beginning finished goods inventory: $74,000
Ending finished goods inventory: $73,000
Sales: $464,000
Gross margin: $52,000
What was the cost of goods manufactured for the month?
$413,000
$411,000
$412,000
$463,000
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Question 45 1 pts Skip to question text.
The following information was provided by Grand Company for the year just ended:
Beginning finished goods inventory: $130,425
Ending finished goods inventory: $125,770
Sales: $500,000
Gross margin: $100,000
The cost of goods manufactured for the year was:
$395,345.
$95,345.
$104,655.
$404,655.
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Question 46 1 pts Skip to question text.
Delta Merchandising, Inc., has provided the following information for the year just ended:
Net sales: $128,500
Beginning inventory: $24,000
Purchases: $80,000
Gross margin: $38,550
The ending inventory for the company at year end was:
$65,450.
$24,500.
$14,050.
$9,950.
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Question 47 1 pts The beginning balance of the Raw Materials inventory account for May was $27,500. The ending balance for May was $28,750 and $128,900 of raw materials were used during the month. The materials purchased during the month cost: <br>
The beginning balance of the Raw Materials inventory account for May was $27,500. The ending balance for May was $28,750 and $128,900 of raw materials were used during the month. The materials purchased during the month cost:
$131,300.
$127,650.
$130,150.
$157,650.
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Question 48 1 pts Skip to question text.
Haack Inc. is a merchandising company. Last month the company’s cost of goods sold was $84,000. The company’s beginning merchandise inventory was $20,000 and its ending merchandise inventory was $18,000. What was the total amount of the company’s merchandise purchases for the month?
$86,000
$82,000
$84,000
$122,000
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Question 49 1 pts Skip to question text.
Use the following to answer questions 49-52:
The following data (in thousands of dollars) have been taken from the accounting records of Karling Corporation for the just completed year.
Sales: $990
Raw materials inventory, beginning: $40
Raw materials inventory, ending: $70
Purchases of raw materials: $120
Direct labor: $200
Manufacturing overhead: $230
Administrative expenses: $150
Selling expenses: $140
Work in process inventory, beginning: $70
Work in process inventory, ending: $50
Finished goods inventory, beginning: $120
Finished goods inventory, ending: $160
The cost of the raw materials used in production during the year (in thousands of dollars) was:
$190.
$90.
$150.
$160.
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Question 50 1 pts The cost of goods manufactured (finished) for the year (in thousands of dollars) was: <br>
The cost of goods manufactured (finished) for the year (in thousands of dollars) was:
$540.
$500.
$570.
$590.
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Question 51 1 pts The cost of goods sold for the year (in thousands of dollars) was: <br>
The cost of goods sold for the year (in thousands of dollars) was:
$700.
$500.
$660.
$580.
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Question 52 1 pts The net income for the year (in thousands of dollars) was: <br>
The net income for the year (in thousands of dollars) was:
$150.
$200.
$490.
$250.
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Question 53 1 pts Skip to question text.
Use the following to answer questions 53-54:
At a sales volume of 32,000 units, CD Company’s total fixed costs are $64,000 and total variable costs are $60,000. The relevant range is 30,000 to 55,000 units.
If CD Company were to sell 43,000 units, the total expected cost would be:
$146,000.
$166,625.
$144,625.
$124,000.
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Question 54 1 pts If CD Company were to sell 50,000 units, the total expected cost per unit (rounded to the nearest cent) would be: <br>
If CD Company were to sell 50,000 units, the total expected cost per unit (rounded to the nearest cent) would be:
$3.20.
$2.48.
$3.88.
$3.16.
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Question 55 1 pts Which of the following companies would be most likely to use a job-order costing system rather than a process costing system? <br>
Which of the following companies would be most likely to use a job-order costing system rather than a process costing system?
fast food restaurant
shipbuilding
crude oil refining
candy making
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Question 56 1 pts The computation of unit product costs involves an averaging process in:<br><br><u>Job-order costing</u>; <u>Process costing</u> <br>
The computation of unit product costs involves an averaging process in:
Job-order costing; Process costing
Yes; No
Yes; Yes
No; Yes
No; No
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Question 57 1 pts Work in Process is a control account supported by detailed cost data contained in: <br>
Work in Process is a control account supported by detailed cost data contained in:
job cost sheets.
the Manufacturing Overhead account.
the Finished Goods inventory account.
purchase requisitions.
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Question 58 1 pts In a job order cost system, the journal entry to record the application of overhead cost to jobs would include: <br>
In a job order cost system, the journal entry to record the application of overhead cost to jobs would include:
a credit to the Manufacturing Overhead account.
a credit to the Work in Process inventory account.
a debit to Cost of Goods Sold.
a debit to the Manufacturing Overhead account.
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Question 59 1 pts In a job-order cost system, the use of indirect materials would usually be recorded as a debit to: <br>
In a job-order cost system, the use of indirect materials would usually be recorded as a debit to:
Raw Materials.
Work in Process.
Manufacturing Overhead.
Finished Goods.
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Question 60 1 pts In a job order cost system, the use of direct materials previously purchased usually is recorded as a debit to: <br>
In a job order cost system, the use of direct materials previously purchased usually is recorded as a debit to:
Work in Process inventory.
Finished Goods inventory.
Manufacturing Overhead.
Raw Materials inventory.
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Question 61 1 pts In a job-order cost system, direct labor costs usually are recorded initially with a debit to: <br>
In a job-order cost system, direct labor costs usually are recorded initially with a debit to:
Manufacturing Overhead.
Finished Goods inventory.
Direct Labor Expense.
Work in Process.
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Question 62 1 pts If a company applies overhead to jobs on the basis of a predetermined overhead rate, a credit balance in the Manufacturing Overhead account at the end of any period means that: <br>
If a company applies overhead to jobs on the basis of a predetermined overhead rate, a credit balance in the Manufacturing Overhead account at the end of any period means that:
more overhead cost has been charged to jobs than has been incurred during the period.
more overhead cost has been incurred during the period than has been charged to jobs.
the amount of overhead cost charged to jobs is greater than the estimated cost for the period.
the amount of overhead cost charged to jobs is less than the estimated overhead cost for the period.
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Question 63 1 pts Skip to question text.
The Work in Process inventory account of a manufacturing company shows a balance of $2,400 at the end of an accounting period. The job cost sheets of the two uncompleted jobs show charges of $400 and $200 for direct materials, and charges of $300 and $500 for direct labor. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labor costs, of:
80%.
125%.
300%.
240%.
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Question 64 1 pts Skip to question text.
Freeman Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated manufacturing overhead would be $150,000 and direct labor hours would be 10,000. The actual figures for the year were $186,000 for manufacturing overhead and 12,000 direct labor hours. The cost records for the year will show:
overapplied overhead of $30,000.
underapplied overhead of $30,000.
underapplied overhead of $6,000.
overapplied overhead of $6,000.
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Question 65 1 pts Skip to question text.
For the current year, Paxman Company incurred $150,000 in actual manufacturing overhead cost. The Manufacturing Overhead account showed that overhead was overapplied in the amount of $6,000 for the year. If the predetermined overhead rate was $8.00 per direct labor hour, how many hours were worked during the year?
19,500 hours
18,000 hours
18,750 hours
17,750 hours
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Question 66 1 pts Skip to question text.
Carlo Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. The company estimated manufacturing overhead at $255,000 for the year and direct labor-hours at 100,000 hours. Actual manufacturing overhead costs incurred during the year totaled $270,000. Actual direct labor hours were 105,000. What was the overapplied or underapplied overhead for the year?
$2,250 overapplied.
$2,250 underapplied.
$15,000 overapplied.
$15,000 underapplied.
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Question 67 1 pts Skip to question text.
The Watts Company uses predetermined overhead rates to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. A and on machine hours in Dept. B. At the beginning of the year, the company made the following estimates:
Dept. A = first figure; Dept. B = second figure
Direct labor cost: $30,000; $40,000
Manufacturing overhead: 60,000; 50,000
Direct labor hours: 6,000; 8,000
Machine hours: 2,000; 10,000
What predetermined overhead rates would be used in Dept A and Dept B, respectively?
50% and $8.00
50% and $5.00
$15 and 110%
200% and $5.00
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Question 68 1 pts Skip to question text.
Kelsh Company uses a predetermined overhead rate based on machine hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for next year:
Direct materials: $10,000
Direct labor: 30,000
Sales commissions: 40,000
Salary of production supervisor: 20,000
Indirect materials: 4,000
Advertising expense: 8,000
Rent on factory equipment: 10,000
Kelsh estimates that 5,000 direct labor hours and 10,000 machine hours will be worked during the year. The predetermined overhead rate per hour will be:
$6.80.
$6.40.
$3.40.
$8.20.
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Question 69 1 pts Skip to question text.
Lucy Sportswear manufactures a specialty line of T-shirts. The company uses a job-order costing system. During March, the foll
