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Exam 18: Managerial Accounting Concepts and Principles

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Question 51

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The salary paid to the supervisor of an assembly line would normally be classified as:

A) Direct labor.
B) Indirect labor.
C) A period cost.
D) A general cost.
E) An assembly cost.

F) A) and B)
G) C) and D)

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Question 52

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The three major cost components of a manufactured product are:

A) Marketing, selling, and administrative costs.
B) Indirect labor, indirect materials, and miscellaneous factory expenses.
C) Direct materials, direct labor, and factory overhead.
D) Differential costs, opportunity costs, and sunk costs.
E) General, selling, and administrative costs.

F) A) and C)
G) B) and D)

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Question 53

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An opportunity cost is:

Direct costs are incurred for the benefit of more than one cost object.

Which of the following statements is True regarding product and period costs?

Expenditures that flow directly to the current income statement and are not reported as assets are ___________________ costs.

One of the main differences between the calculation of cost of goods sold for a merchandiser and that of a manufacturer is that the calculation includes cost of goods purchased for the merchandiser, but the manufacturer replaces that with __________________________.

A company's prime costs total $4,500,000 and its conversion costs total $5,500,000. If direct materials are $2,000,000, calculate the overhead costs:

____________________ inventory consists of completed products ready for sale by a manufacturer.

For a manufacturing firm, cycle time may be computed as process time + inspection time + move time - wait time.

Using the information below, compute the manufacturing cycle time:

Cycle time is calculated by process time plus inspection time plus move time plus __________________.

Which of the following items represents a difference between financial and managerial accounting?

A manufacturer's cost of goods manufactured is the sum of direct materials, direct labor, and factory overhead costs incurred in producing products.

Labor costs that are clearly associated with specific units or batches of product because the labor is used to convert raw materials into finished products are called:

When the attitude of continuous improvement exists throughout an organization, every manager and employee seeks to continuously experiment with new and improved business practices.

Selling and administrative expenses are normally product costs.

Whether a cost is controllable or not controllable by an employee depends on the employee's level of responsibility.

Although direct labor and raw materials costs are treated as manufacturing costs and therefore make up part of the finished goods inventory cost, factory overhead is charged to expense as it is incurred because it is a period cost.

Flexibility of practice when applied to managerial accounting means that