Question 1

A company's prime costs total $3,000,000 and its conversion costs total $7,000,000.If direct materials are $1,000,000 and factory overhead is $5,000,000,then direct labor is:

Accepted Answer

A)  $4,000,000.
B)  $14,000,000.
C)  $2,000,000.
D)  $1,000,000.
E)  $3,000,000.F) A) and B)
G) A) and C)

Question 2

Straight-line depreciation,rent,and manager salaries are examples of variable costs.

Accepted Answer

A) True 
 B)False

Question 3

Using the information below:

-Calculate gross profit for the period:

Accepted Answer

A)  $774,000.
B)  $769,000.
C)  $530,000.
D)  $535,000.
E)  $448,000.F) B) and D)
G) B) and E)

Question 4

The cost of partially completed products is included in the balance of the Work in Process Inventory account.

Accepted Answer

A) True 
 B)False

Question 5

An employee overstates his reimbursable expenses in one period in order to receive needed additional cash.Since he intends to reduce his expenses the next period by the current overstatement,this act is not considered fraudulent.

Accepted Answer

A) True 
 B)False

Question 6

The cost of workers who assist in,or supervise,the manufacturing process,not linked to specific units of product is called:

Accepted Answer

A)  Unspecified labor.
B)  Direct labor.
C)  Indirect labor.
D)  Basic labor.
E)  Joint labor.F) C) and E)
G) A) and B)

Question 7

Manufacturers usually have three inventories: raw materials,work in process,and finished goods.

Accepted Answer

A) True 
 B)False

Question 8

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 9

Define and contrast period costs and product costs.How are they reported in the financial statements of a manufacturing company?

Accepted Answer

Period costs are the expenditures that a...

Question 10

Use the cost information below for Sundar Company to determine the total manufacturing costs added during the current year:

Accepted Answer

A)  $98,600.
B)  $43,500.
C)  $98,000.
D)  $42,900.
E)  $79,000.F) B) and D)
G) A) and B)

Question 11

Total fixed costs change in proportion to changes in the volume of activity.

Accepted Answer

A) True 
 B)False

Question 12

Current information for the Healey Company follows: All raw materials used were traceable to specific units of product.
-Healey Company's total manufacturing costs for the year are:

Accepted Answer

A)  $125,800.
B)  $128,600.
C)  $131,400.
D)  $137,000.
E)  $139,000.F) C) and D)
G) A) and B)

Question 13

A manufacturer's inventory that is not completely finished is called ________ .

Accepted Answer

The answer of A manufacturer's inventory that is not completely...

Question 14

An approach to managing inventories and production operations such that units of materials and products are obtained and provided only as they are needed is called:

Accepted Answer

A)  Continuous improvement.
B)  Customer orientation.
C)  Just-in-time manufacturing.
D)  Theory of constraints.
E)  Total quality management.F) A) and B)
G) C) and E)

Question 15

Expenditures directly associated with the manufacture of finished goods that include direct materials and direct labor,are ________ costs.

Accepted Answer

The answer of Expenditures directly associated with the manufacture of...

Question 16

Which of the following costs would not be classified as factory overhead?

Accepted Answer

A)  Property taxes on maintenance machinery.
B)  Insurance on factory building.
C)  Wages of the factory janitor.
D)  Rubber for the soles of shoes produced.
E)  Small tools used in production.F) C) and D)
G) A) and B)

Question 17

Raw materials inventory should not include indirect materials.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following items is not a management concept that was created to improve company performance?

Accepted Answer

A)  Just-in-time manufacturing.
B)  GAAP constraints and guidelines.
C)  Total quality management.
D)  Continuous improvement.
E)  Customer orientation.F) A) and B)
G) A) and C)

Question 19

Prime costs consist of direct materials and direct labor.

Accepted Answer

A) True 
 B)False

Question 20

Products that are in the process of being manufactured but are not yet complete are called:

Accepted Answer

A)  Raw materials inventory.
B)  Conversion costs.
C)  Cost of goods sold.
D)  Work in process inventory.
E)  Finished goods inventory.F) B) and E)
G) A) and E)

Exam 14: 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

Raw materials inventory should not include indirect materials.

Correct AnswerverifiedShow Answer

Use the cost information below for Sundar Company to determine the total manufacturing costs added during the current year:

Correct AnswerverifiedShow Answer

The cost of workers who assist in,or supervise,the manufacturing process,not linked to specific units of product is called:

Correct AnswerverifiedShow Answer

A company's prime costs total $3,000,000 and its conversion costs total $7,000,000.If direct materials are $1,000,000 and factory overhead is $5,000,000,then direct labor is:

Correct AnswerverifiedShow Answer

Using the information below: -Calculate gross profit for the period:

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Define and contrast period costs and product costs.How are they reported in the financial statements of a manufacturing company?

Correct AnswerverifiedPeriod costs are the expenditures that a...View AnswerShow Answer

Straight-line depreciation,rent,and manager salaries are examples of variable costs.

Correct AnswerverifiedShow Answer

The cost of partially completed products is included in the balance of the Work in Process Inventory account.

Correct AnswerverifiedShow Answer

Products that are in the process of being manufactured but are not yet complete are called:

Correct AnswerverifiedShow Answer

Prime costs consist of direct materials and direct labor.

Correct AnswerverifiedShow Answer

A manufacturer's inventory that is not completely finished is called ________ .

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Total fixed costs change in proportion to changes in the volume of activity.

Correct AnswerverifiedShow Answer

Which of the following items is not a management concept that was created to improve company performance?

Correct AnswerverifiedShow Answer

Current information for the Healey Company follows: All raw materials used were traceable to specific units of product. -Healey Company's total manufacturing costs for the year are:

Correct AnswerverifiedShow Answer

Expenditures directly associated with the manufacture of finished goods that include direct materials and direct labor,are ________ costs.

Correct AnswerverifiedShow Answer

Manufacturers usually have three inventories: raw materials,work in process,and finished goods.

Correct AnswerverifiedShow Answer

An approach to managing inventories and production operations such that units of materials and products are obtained and provided only as they are needed is called:

Correct AnswerverifiedShow Answer

An employee overstates his reimbursable expenses in one period in order to receive needed additional cash.Since he intends to reduce his expenses the next period by the current overstatement,this act is not considered fraudulent.

Correct AnswerverifiedShow Answer

Which of the following costs would not be classified as factory overhead?

Correct AnswerverifiedShow Answer

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Period costs are the expenditures that a...
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