Question 1

Total manufacturing costs incurred during the year do not include:

Accepted Answer

A)   Direct materials used.
B)   Factory supplies used.
C)   Goods in process inventory, beginning balance.
D)   Direct labor.
E)   Depreciation of machinery.F) B) and E)
G) D) and E)

Question 2

List the four goals of an internal control system.

Accepted Answer

An internal control system is the polici...

Question 3

Expenditures incurred in the process of converting raw materials to finished goods, that include direct labor and factory overhead are known as ______________________.

Accepted Answer

The answer of Expenditures incurred in the process of converting...

Question 4

Costs that flow directly to the current income statement are called:

Accepted Answer

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

Question 5

Both financial and managerial accounting report monetary information; managerial accounting also reports considerable nonmonetary information.

Accepted Answer

A) True 
 B)False

Question 6

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 7

A primary difference between variable costs and fixed costs is:

Accepted Answer

A)   Variable costs per unit change in varying increments while fixed costs per unit change in equal increments over the relevant range of activity.
B)   Variable costs per unit fluctuate and fixed costs per unit remain constant over the relevant range of activity.
C)   Variable costs per unit are fixed and fixed costs per unit are variable over the relevant range of activity.
D)   Variable costs per unit change in equal increments while total fixed costs change in proportion to the level of activity over the company's relevant range.
E)   Total variable costs are fixed and fixed costs per unit never change over the relevant range of activity.F) B) and E)
G) B) and D)

Question 8

Costs that are first assigned to inventory are called:

Accepted Answer

A)   Period costs.
B)   Product costs.
C)   General costs.
D)   Administrative costs.
E)   Fixed costs.F) B) and E)
G) None of the above

Question 9

Managerial accounting is different from financial accounting in that

Accepted Answer

A)   Managerial accounting is more focused on the organization as a whole and financial accounting is more focused on subdivisions of the organization.
B)   Managerial accounting never includes nonmonetary information.
C)   Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions.
D)   Managerial accounting is used extensively by investors, whereas financial accounting is used only by creditors.
E)   Managerial accounting is mainly used to set stock prices.F) A) and E)
G) All of the above

Question 10

Raw materials that physically become part of the product and can be traced to specific units or batches of product are called:

Accepted Answer

A)   Raw materials sold.
B)   Chargeable materials.
C)   Goods in process.
D)   Indirect materials.
E)   Direct materials.F) A) and B)
G) A) and C)

Question 11

Which of the following is never included in direct materials costs?

Accepted Answer

A)   Invoice costs of direct materials.
B)   Outgoing delivery charges.
C)   Materials storage costs.
D)   Materials handling costs.
E)   All of these are direct material costs.F) All of the above
G) A) and B)

Question 12

Which of the following statements is correct concerning the elements of cycle time?

Accepted Answer

A)   Move time is the time spent moving (1)  raw materials from storage to production and (2)  goods in process from factory location to another factory location.
B)   Inspection time is the time spent producing the product.
C)   Process time is considered non-value-added time.
D)   Wait time is considered value-added time.
E)   Cycle efficiency is the ratio of non-value-added time to total cycle time.F) All of the above
G) D) and E)

Question 13

A manufacturing firm's cost of goods manufactured is equivalent to a merchandising firm's:

Accepted Answer

A)   Cost of goods sold.
B)   Cost of goods purchased.
C)   Cost of goods available.
D)   Beginning merchandise inventory.
E)   Ending merchandise inventory.F) None of the above
G) A) and B)

Question 14

Choosing to outsource a component of a product or manufacture it internally is an example of a(n) :

Accepted Answer

A)   Opportunity cost.
B)   Sunk cost.
C)   Out-of-pocket cost.
D)   Period cost.
E)   Fixed cost.F) B) and E)
G) B) and D)

Question 15

Using the information below, compute the cycle efficiency:

Accepted Answer

A)   93.8%.
B)   81.3%.
C)   100.0%.
D)   75.0%.
E)   88.8%.F) B) and E)
G) None of the above

Question 16

Continuous improvement:

Accepted Answer

A)   Is a measure of profits.
B)   Is a measure of costs.
C)   Rejects the notion of "good enough."
D)   Is not applicable to most businesses.
E)   Is possible only in service businesses.F) None of the above
G) B) and C)

Question 17

Which of the following accounts would all appear on a manufacturing statement?

Accepted Answer

A)   Raw materials, factory insurance expired, indirect labor.
B)   Raw materials, goods in process, finished goods.
C)   Factory buildings, delivery equipment, and depreciation on factory equipment.
D)   Direct labor, indirect labor, sales salaries.
E)   Direct labor, factory repairs and maintenance, wages payable.F) B) and D)
G) None of the above

Question 18

The main goal of the lean business model is the elimination of waste while satisfying the customer and providing a positive return to the company.

Accepted Answer

A) True 
 B)False

Question 19

A direct cost is a cost that is:

Accepted Answer

A)   Identifiable as controllable.
B)   Variable with respect to the volume of activity.
C)   Fixed with respect to the volume of activity.
D)   Traceable to a cost object.
E)   Sunk with respect to a cost object.F) B) and C)
G) None of the above

Question 20

________________________ is an activity that provides financial and nonfinancial information to an organization's managers and other internal decision makers.

Accepted Answer

Managerial...

Exam 18: Managerial Accounting Concepts and Principles

Costs that flow directly to the current income statement are called:

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Continuous improvement:

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Which of the following accounts would all appear on a manufacturing statement?

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A direct cost is a cost that is:

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Total manufacturing costs incurred during the year do not include:

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Raw materials that physically become part of the product and can be traced to specific units or batches of product are called:

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Costs that are first assigned to inventory are called:

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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?

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Managerial accounting is different from financial accounting in that

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List the four goals of an internal control system.

Correct AnswerverifiedAn internal control system is the polici...View AnswerShow Answer

A primary difference between variable costs and fixed costs is:

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Choosing to outsource a component of a product or manufacture it internally is an example of a(n) :

Correct AnswerverifiedShow Answer

Which of the following statements is correct concerning the elements of cycle time?

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Using the information below, compute the cycle efficiency:

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________________________ is an activity that provides financial and nonfinancial information to an organization's managers and other internal decision makers.

Correct AnswerverifiedManagerial...View AnswerShow Answer

The main goal of the lean business model is the elimination of waste while satisfying the customer and providing a positive return to the company.

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Both financial and managerial accounting report monetary information; managerial accounting also reports considerable nonmonetary information.

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Which of the following is never included in direct materials costs?

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A manufacturing firm's cost of goods manufactured is equivalent to a merchandising firm's:

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Expenditures incurred in the process of converting raw materials to finished goods, that include direct labor and factory overhead are known as ______________________.

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An internal control system is the polici...
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Managerial...
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