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Test Bank For Introduction To Managerial Accounting, 5th Edition - Document preview page 1

Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 1

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Test Bank For Introduction To Managerial Accounting, 5th Edition

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Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 1 preview imageChapter 01-Managerial Accounting and Cost Concepts1-1Chapter 01Managerial Accounting and Cost ConceptsTrue / False Questions1.Managerial accounting is primarily concerned with the organization as a whole rather thanwith segments of the organization.TrueFalse2.Managerial accounting places less emphasis on nonmonetary data than financialaccounting.TrueFalse3.Direct labor is a part of both prime cost and conversion cost.TrueFalse4.Wages paid to production supervisors would be considered direct labor.TrueFalse5.Direct material cost combined with manufacturing overhead cost is known as conversioncost.TrueFalse6.Advertising is a product cost as long as it promotes specific products.TrueFalse7.Although depreciation is always a period cost in a merchandising firm, it can be a productcost in a manufacturing firm.TrueFalse
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Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 2 preview image
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Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 3 preview imageChapter 01-Managerial Accounting and Cost Concepts1-28.In a manufacturing firm, all costs are product costs.TrueFalse9.The cost of shipping parts from a supplier is considered a product cost.TrueFalse10.If the finished goods inventory increases between the beginning and the end of a period,then the cost of goods manufactured for the period is larger than the cost of goods sold.TrueFalse11.The inventory of finished goods on hand at the end of a period is considered an asset, butinventories of raw materials and work-in-process are not considered assets until production iscompleted.TrueFalse12.The cost of goods manufactured for a period is the amount transferred from work inprocess inventory to finished goods inventory during the period.TrueFalse13.Differential costs can be either fixed or variable.TrueFalse14.A fixed cost is constant per unit of product.TrueFalse15.The variable cost per unit is constant and does not depend on how many units areproduced.TrueFalse
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Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 4 preview imageChapter 01-Managerial Accounting and Cost Concepts1-316.The cost of napkins put on each person's tray at a fast food restaurant is a fixed cost.TrueFalse17.A factory supervisor's salary would be classified as a direct cost of a unit of product.TrueFalseMultiple Choice Questions18.Managerial accounting:A.has its primary emphasis on the future.B.is required by regulatory bodies such as the SEC.C.focuses on the organization as a whole, rather than on the organization's segments.D.Responses a, b, and c are all correct.19.The plans of management are expressed formally in:A.the annual report to shareholders.B.Form 10-Q submitted to the Securities and Exchange Commission.C.performance reports.D.budgets.20.Which of the following IS a characteristic of financial accounting?A.not mandatoryB.must follow GAAPC.emphasis on relevance of data, rather than precisionD.both A and C above21.The corporate controller's salary would be considered a(n):A.manufacturing cost.B.product cost.C.administrative cost.D.selling expense.
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Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 5 preview imageChapter 01-Managerial Accounting and Cost Concepts1-422.The costs of direct materials are classified as:A.AB.BC.CD.D23.Manufacturing overhead:A.can be either a variable cost or a fixed cost.B.includes the costs of shipping finished goods to customers.C.includes all factory labor costs.D.includes all fixed costs.24.The three basic elements of manufacturing cost are direct materials, direct labor, and:A.cost of goods manufactured.B.cost of goods sold.C.work in process.D.manufacturing overhead.25.Prime cost consists of direct materials combined with:A.direct labor.B.manufacturing overhead.C.indirect materials.D.cost of goods manufactured.
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Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 6 preview imageChapter 01-Managerial Accounting and Cost Concepts1-526.Which terms below correctly describe the cost of the black paint used to paint the dots ona pair of dice?A.AB.BC.CD.D27.The cost of fire insurance for a manufacturing plant is generally considered to be a:A.product cost.B.period cost.C.variable cost.D.all of the above.28.An example of a period cost is:A.fire insurance on a factory building.B.salary of a factory supervisor.C.direct materials.D.rent on a headquarters building.29.Transportation costs incurred by a manufacturing company to ship its product to itscustomers would be classified as which of the following?A.Product costB.Manufacturing overheadC.Period costD.Administrative cost
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Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 7 preview imageChapter 01-Managerial Accounting and Cost Concepts1-630.Micro Computer Company has set up a toll-free telephone line for customer inquiriesregarding computer hardware produced by the company. The cost of this toll-free line wouldbe classified as which of the following?A.Product costB.Manufacturing overheadC.Direct laborD.Period cost31.Rossiter Company failed to record a credit sale at the end of the year, although thereduction in finished goods inventories was correctly recorded when the goods were shippedto the customer. Which one of the following statements is correct?A.AB.BC.CD.D32.Cost of goods manufactured will usually include:A.AB.BC.CD.D
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Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 8 preview imageChapter 01-Managerial Accounting and Cost Concepts1-733.Which two terms below describe the wages paid to security guards that monitor a factory24 hours a day?A.variable cost and direct costB.fixed cost and direct costC.variable cost and indirect costD.fixed cost and indirect cost34.Within the relevant range, the difference between variable costs and fixed costs is:A.variable costs per unit fluctuate and fixed costs per unit remain constant.B.variable costs per unit are constant and fixed costs per unit fluctuate.C.both total variable costs and total fixed costs are constant.D.both total variable costs and total fixed costs fluctuate.35.Each of the following would be classified as variable in terms of cost behavior except:A.cost of shipping goods to customers via express mail.B.sales commissions.C.plant manager's salary.D.direct materials.36.A lawnmower manufacturer computed a cost per unit of $53 by adding together lastmonth's direct labor, direct materials, and manufacturing overhead and dividing that total bythe 10,000 units produced last month. (There were no beginning or ending inventories.) If9,000 units are going to be manufactured this month, we would expect that the:A.cost per unit will remain the same.B.cost per unit will decrease.C.direction of change in unit costs cannot be determined.D.cost per unit will increase.37.Which one of the following costs should NOT be considered an indirect cost of serving aparticular customer at a Dairy Queen fast food outlet?A.the cost of the hamburger patty in the burger they ordered.B.the wages of the employee who takes the customer's order.C.the cost of heating and lighting the kitchen.D.the salary of the outlet's manager.
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Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 9 preview imageChapter 01-Managerial Accounting and Cost Concepts1-838.An opportunity cost is:A.the difference in total costs which results from selecting one alternative instead of another.B.the benefit forgone by selecting one alternative instead of another.C.a cost which may be saved by not adopting an alternative.D.a cost which may be shifted to the future with little or no effect on current operations.39.Buford Company rents out a small unused portion of its factory to another company for$1,000 per month. The rental agreement will expire next month, and rather than renew theagreement Buford Company is thinking about using the space itself to store materials. Theterm to describe the $1,000 per month is:A.sunk cost.B.period cost.C.opportunity cost.D.variable cost.40.The following costs were incurred in August:Conversion costs during the month totaled:A.$127,000B.$51,000C.$52,000D.$75,000
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Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 10 preview imageChapter 01-Managerial Accounting and Cost Concepts1-941.The following costs were incurred in August:Prime costs during the month totaled:A.$39,000B.$59,000C.$96,000D.$38,00042.During the month of August, direct labor cost totaled $13,000 and direct labor cost was20% of prime cost. If total manufacturing costs during August were $88,000, themanufacturing overhead was:A.$75,000B.$23,000C.$65,000D.$52,00043.In August direct labor was 60% of conversion cost. If the manufacturing overhead for themonth was $54,000 and the direct materials cost was $34,000, the direct labor cost was:A.$36,000B.$22,667C.$51,000D.$81,00044.Williams Company's direct labor cost is 25% of its conversion cost. If the manufacturingoverhead for the last period was $45,000 and the direct materials cost was $25,000, the directlabor cost was:A.$15,000B.$60,000C.$33,333D.$20,000
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Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 11 preview imageChapter 01-Managerial Accounting and Cost Concepts1-1045.Green Company's costs for the month of August were as follows: direct materials,$27,000; direct labor, $34,000; selling, $14,000; administrative, $12,000; and manufacturingoverhead, $44,000. The beginning work in process inventory was $16,000 and the endingwork in process inventory was $9,000. What was the cost of goods manufactured for themonth?A.$105,000B.$132,000C.$138,000D.$112,00046.Consider the following costs incurred in a recent period:What was the total amount of the period costs listed above for the period?A.$78,000B.$71,000C.$46,000D.$37,00047.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:A.$20,000B.$50,000C.$110,000D.$150,000
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Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 12 preview imageChapter 01-Managerial Accounting and Cost Concepts1-1148.Last month a manufacturing company had the following operating results:What was the cost of goods manufactured for the month?A.$350,000B.$385,000C.$377,000D.$323,00049.The following inventory balances relate to Lequin Manufacturing Corporation at thebeginning and end of the year:Lequin's total manufacturing cost was $543,000. What was Lequin's cost of goods sold?A.$517,000B.$545,000C.$569,000D.$567,00050.Gabrisch Inc. is a merchandising company. Last month the company's merchandisepurchases totaled $90,000. The company's beginning merchandise inventory was $13,000 andits ending merchandise inventory was $22,000. What was the company's cost of goods soldfor the month?A.$90,000B.$99,000C.$125,000D.$81,000
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Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 13 preview imageChapter 01-Managerial Accounting and Cost Concepts1-1251.Haan Inc. is a merchandising company. Last month the company's cost of goods sold was$66,000. The company's beginning merchandise inventory was $14,000 and its endingmerchandise inventory was $16,000. What was the total amount of the company'smerchandise purchases for the month?A.$68,000B.$96,000C.$64,000D.$66,00052.During August, the cost of goods manufactured was $73,000. The beginning finishedgoods inventory was $15,000 and the ending finished goods inventory was $21,000. Whatwas the cost of goods sold for the month?A.$79,000B.$109,000C.$67,000D.$73,00053.Walton Manufacturing Company gathered the following data for the month.How much net operating income will be reported for the period?A.$54,000B.$17,000C.$52,000D.Cannot be determined.
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Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 14 preview imageChapter 01-Managerial Accounting and Cost Concepts1-1354.Using the following data for August, calculate the cost of goods manufactured:The cost of goods manufactured was:A.$106,000B.$92,000C.$95,000D.$89,00055.The following inventory balances relate to Bharath Manufacturing Corporation at thebeginning and end of the year:Bharath's cost of goods sold was $653,000. What was Bharath's cost of goods manufactured?A.$660,000B.$670,000C.$682,000D.$689,000
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Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 15 preview imageChapter 01-Managerial Accounting and Cost Concepts1-1456.The following data have been provided by a company for a recent accounting period:The cost of goods manufactured for the period was:A.$147,000B.$151,000C.$153,000D.$154,00057.Direct materials used in production totaled $330,000. Direct labor was $415,000 andmanufacturing overhead was $220,000. What were the total manufacturing costs incurred forthe month?A.$530,000B.$965,000C.$745,000D.$635,000
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Test Bank For Introduction To Managerial Accounting, 5th Edition - Page 16 preview imageChapter 01-Managerial Accounting and Cost Concepts1-1558.How much opportunity cost is represented in the following information concerning amachine?A.$80,000B.$14,000C.$25,000D.$68,000Corcetti Company manufactures and sells prewashed denim jeans. Large rolls of denim clothare purchased and are first washed in a giant washing machine. After the cloth is dried, it iscut up into jean pattern shapes and then sewn together. The completed jeans are sold tovarious retail chains.59.Which of the following terms could be used to correctly describe the cost of the soap usedto wash the denim cloth?A.AB.BC.CD.D
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