MANAGERIAL ACCOUNTING

MANAGERIAL ACCOUNTING
QUESTION 1
1. Activity-based costing

strives to create an environment that will enable workers to manufacture zero-defect products.

is the process of choosing among competing alternatives.

was established in response to financial scandals.

encourages process-value analysis.
3 points
QUESTION 2
1. Financial accounting

is concerned with the information about the firm as a whole.

has to adhere to GAAP policies.

focuses on external users.

all of these are correct
3 points
QUESTION 3
1. Managerial accounting

is primarily for external users.

has no mandatory rules.

provides information based on historical information.

must adhere to GAAP.
3 points
QUESTION 4
1. The objective of profit maximization

should be the only goal of an organization.

is an objective of financial accounting but not managerial accounting.

should be achieved through legal and ethical means.

should outweigh the goal of product quality.
3 points
QUESTION 5
1. The primary objective of managerial accounting is

to provide stockholders and potential investors with useful information for decision making.

to provide banks and other creditors with information useful in making credit decisions.

to provide management with information useful for planning and control of operations.

to provide the Internal Revenue Service with information about taxable income.
3 points
QUESTION 6
1. The standards of ethical conduct for managerial accountants include

competence and performance.

integrity and respect for others.

confidentiality, confidence, integrity, and observance.

competence, confidentiality, integrity, and credibility.
3 points
QUESTION 7
1. Which of the following is not an objective of managerial accounting?

To prepare external reports for investors, creditors, government agencies, and other outside users.

To provide information for costing of services, products, and other objects of interest to management.

To provide information for planning, controlling, evaluating and continuous improvement.

To provide information for decision making.
3 points
QUESTION 8
1. Activity-based costing is a less detailed approach to determining the cost of goods and services than traditional cost accounting.
True
False
3 points
QUESTION 9
1. Financial accounting is governed by GAAP.
True
False
3 points
QUESTION 10
1. Management accounting information is only used by manufacturing organizations.
True
False
3 points
QUESTION 11
1. A variable cost in total

increases as output increases and decreases as output decreases.

increases as output increases and/or decreases.

remains constant no matter the level of output.

increases as output decreases and decreases as output increases.
3 points
QUESTION 12
1. An indirect cost

can be easily and accurately traced to a cost object.

is hard to trace.

should never be assigned to a cost object.

do none of these.
3 points
QUESTION 13
1. Cost is:

the difference between sales revenue and cost of goods sold.

the benefit given up or sacrificed when on alternative is chosen over another.

the amount of cash or cash equivalent sacrificed for goods and/or services that are expected to bring a current or future benefit to the organization.

the revenue per unit.
3 points
QUESTION 14
1. Cost of goods manufactured equals

total product costs incurred during the current period + beginning work in process ? ending work in process.

direct materials cost + direct labor cost + overhead cost.

sales ? cost of goods sold.

none of these are correct.
3 points
QUESTION 15
1. Cost of goods sold

represents all costs associated with research, development, and general administration of the organization.

is found on the Balance Sheet.

is the cost of the partially completed goods that are still on the factory floor at the end of the period.

is the total product cost for the units sold during a period.
3 points
QUESTION 16
1. Expired costs are called

fixed.

costs.

expenses.

profit.
3 points
QUESTION 17
1. Materials in the raw materials account do not become direct materials

until they are withdrawn from inventory for use in production.

until the finished product is sold.

until they are purchased from a vendor.

none of these are correct.
3 points
QUESTION 18
1. Non-manufacturing costs include

marketing and administration.

direct materials.

indirect materials.

overhead.
3 points
QUESTION 19
1. Prime cost is

indirect materials cost and direct labor cost.

direct materials cost and direct labor cost.

direct labor cost and indirect labor cost.

direct materials cost and indirect labor cost.
3 points
QUESTION 20
1. Product costs consist of

period costs.

indirect materials, indirect labor, and administrative costs.

direct materials, direct labor, and selling costs.

direct materials, direct labor, and overhead.
3 points
QUESTION 21
1. Production costs that are not attached to units that are sold are reported as:

selling expenses.

cost of goods sold.

administrative costs.

inventory.
3 points
QUESTION 22
1. The cost of the partially completed goods at the end of the period would be

ending work in process inventory.

cost of goods sold.

beginning finished goods inventory.

beginning work in process inventory.
3 points
QUESTION 23
1. The unit cost

is the total product costs divided by the number of units produced.

includes period costs.

is the total prime costs divided by the number of units produced.

is the total conversion costs divided by the number of units produced.
3 points
QUESTION 24
1. Which of the following is an example of a period cost?

research and development

selling and marketing

general accounting

all of these
3 points
QUESTION 25
1. Which of the following would not be found on an income statement of a service organization?

selling expenses

cost of goods sold

operating income

sales revenue
3 points
QUESTION 26
1. Figure 2-1.
Concam Inc. manufactures television sets. Last month direct materials (electronic components, etc.) costing $500,000 were put into production. Direct labor of $800,000 was incurred, overhead equaled $450,000, and selling and administrative costs totaled $360,000. The company manufactured 8,000 television sets during the month. Assume that there were no beginning or ending work in process balances.

Refer to Figure 2-1. The per-unit conversion cost was:

$218.75

$156.25

$162.50

$100.00
5 points
QUESTION 27
1. Figure 2-1.
Concam Inc. manufactures television sets. Last month direct materials (electronic components, etc.) costing $500,000 were put into production. Direct labor of $800,000 was incurred, overhead equaled $450,000, and selling and administrative costs totaled $360,000. The company manufactured 8,000 television sets during the month. Assume that there were no beginning or ending work in process balances.

Refer to Figure 2-1. The total product costs for last month were:

$1,750,000

$2,110,000

$1,300,000

$1,250,000
5 points
QUESTION 28
1. Figure 2-1.
Concam Inc. manufactures television sets. Last month direct materials (electronic components, etc.) costing $500,000 were put into production. Direct labor of $800,000 was incurred, overhead equaled $450,000, and selling and administrative costs totaled $360,000. The company manufactured 8,000 television sets during the month. Assume that there were no beginning or ending work in process balances.

Refer to Figure 2-1. The total per unit prime cost was:

$263.75

$62.50

$162.50

$156.25
5 points
QUESTION 29
1. Figure 2-4.
Junko Company makes financial calculators. During the year Junko manufactured 97,000 financial calculators. Finished goods inventory had the following units on hand:
January 1 1,260
December 31 1,040

2.

Refer to Figure 2-4. If each financial calculator has a per-unit product cost of $112, what was the cost of goods sold last year?

$10,864,000

$10,839,360

$11,005,120

$10,888,640
5 points
QUESTION 30
1. Figure 2-5.
In July, Econo Company purchased materials costing $21,000 and incurred direct labor cost of $18,000. Overhead totaled $32,000 for the month. Information on inventories was as follows:
July 1 July 31
Materials $6,200 $7,100
Work in process $ 700 $1,200
Finished goods $3,300 $2,700

2.

Refer to Figure 2-5. What was the cost of goods sold for July?

$70,200

$69,600

$71,300

$71,100
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