Question 1

Control is the process of monitoring operating results and comparing actual results with the expected results.

Accepted Answer

A) True 
 B)False

Question 2

Period costs can be found in the balance sheet or in the income statement.

Accepted Answer

A) True 
 B)False

Question 3

Since there are few rules to restrict how an organization chooses to arrange its own internal data for decision making, managerial accounting provides ample opportunity for creativity and change.

Accepted Answer

A) True 
 B)False

Question 4

Managerial accounting

Accepted Answer

A)   is prepared according to GAAP.
B)   is prepared according to management needs.
C)   is prepared periodically only.
D)   is related to the entire business entity only.E) A) and B)
F) A) and C)

Question 5

Conversion cost is the combination of direct materials cost and factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 6

Factory overhead cost is sometimes referred to as factory burden.

Accepted Answer

A) True 
 B)False

Question 7

The costs of materials and labor that do not enter directly into the finished product are classified as factory overhead.

Accepted Answer

A) True 
 B)False

Question 8

The cost of wages paid to employees directly involved in the manufacturing process in converting materials into finished product is classified as:

Accepted Answer

A)   factory overhead cost
B)   direct labor cost
C)   miscellaneous costs
D)   direct materials costE) A) and B)
F) A) and C)

Question 9

Direct labor costs are included in the conversion costs of a product.

Accepted Answer

A) True 
 B)False

Question 10

What term is used to describe the process of developing the organization's objectives and translating those into courses of action?

Accepted Answer

A)   Supervising
B)   Planning
C)   Improving
D)   Decision makingE) A) and D)
F) C) and D)

Question 11

Which of the following is not a characteristic of useful managerial accounting reports?

Accepted Answer

A)   Accuracy
B)   GAAP
C)   historical and estimated data
D)   reports prepared as neededE) A) and B)
F) None of the above

Question 12

Period costs include direct materials and direct labor.

Accepted Answer

A) True 
 B)False

Question 13

A company used $35,000 of direct materials, incurred $73,000 in direct labor cost, and $114,000 in factory overhead costs during the period. If beginning and ending work in process inventories were $28,000 and $32,000 respectively, the cost of goods manufactured was:

Accepted Answer

A)   $218,000
B)   $226,000
C)   $190,000
D)   $222,000E) None of the above
F) C) and D)

Question 14

Williams Company reports production costs for 2015 as follows:  Williams Company's period costs for 2015 amount to:

Accepted Answer

A)   $345,000
B)   $250,000
C)   $400,000
D)   $175,000E) None of the above
F) B) and C)

Question 15

Work in process inventory on December 31, 2011, is $44,000. Work in process inventory increased by 60% during 2011. Cost of goods manufactured for 2011 amounts to $275,000. What are the total manufacturing costs incurred in 2011?

Accepted Answer

A)   $291,500
B)   $302,000
C)   $275,750
D)   $233,750E) A) and C)
F) A) and D)

Question 16

A staff department has no direct authority over a line department.

Accepted Answer

A) True 
 B)False

Question 17

Accounting designed to meet the needs of decision-makers inside the business is referred to as:

Accepted Answer

A)   general accounting
B)   financial accounting
C)   managerial accounting
D)   external accountingE) A) and D)
F) B) and C)

Question 18

Laramie Technologies had the following data:
Cost of Materials Used $50,000
Direct Labor costs $56,000
Factory Overhead $28,000
Work in Process, beg. $45,000
Work in Process, end. $32,000
Show your calculations to determine the Cost of Goods Manufactured.

Accepted Answer

$50,000 + $56,000 + ...

Question 19

Which of the following manufacturing costs is an indirect cost of producing a product?

Accepted Answer

A)   Oil lubricants used for factory machinery
B)   Commissions for sales personnel
C)   Hourly wages of an assembly worker
D)   Memory chips for a microcomputer manufacturerE) B) and C)
F) All of the above

Question 20

What is the amount of Direct Materials used?

Accepted Answer

A)   $2,000
B)   $4,000
C)   $8,000
D)   $14,000E) B) and C)
F) All of the above

Exam 18: Managerial Accounting Concepts and Principles

Factory overhead cost is sometimes referred to as factory burden.

Correct AnswerverifiedShow Answer

Control is the process of monitoring operating results and comparing actual results with the expected results.

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What term is used to describe the process of developing the organization's objectives and translating those into courses of action?

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Work in process inventory on December 31, 2011, is $44,000. Work in process inventory increased by 60% during 2011. Cost of goods manufactured for 2011 amounts to $275,000. What are the total manufacturing costs incurred in 2011?

Correct AnswerverifiedShow Answer

The costs of materials and labor that do not enter directly into the finished product are classified as factory overhead.

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Managerial accounting

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A staff department has no direct authority over a line department.

Correct AnswerverifiedShow Answer

Period costs include direct materials and direct labor.

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Direct labor costs are included in the conversion costs of a product.

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Which of the following manufacturing costs is an indirect cost of producing a product?

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Which of the following is not a characteristic of useful managerial accounting reports?

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What is the amount of Direct Materials used?

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The cost of wages paid to employees directly involved in the manufacturing process in converting materials into finished product is classified as:

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Williams Company reports production costs for 2015 as follows: Williams Company's period costs for 2015 amount to:

Correct AnswerverifiedShow Answer

Period costs can be found in the balance sheet or in the income statement.

Correct AnswerverifiedShow Answer

A company used $35,000 of direct materials, incurred $73,000 in direct labor cost, and $114,000 in factory overhead costs during the period. If beginning and ending work in process inventories were $28,000 and $32,000 respectively, the cost of goods manufactured was:

Correct AnswerverifiedShow Answer

Conversion cost is the combination of direct materials cost and factory overhead cost.

Correct AnswerverifiedShow Answer

Accounting designed to meet the needs of decision-makers inside the business is referred to as:

Correct AnswerverifiedShow Answer

Laramie Technologies had the following data: Cost of Materials Used $50,000 Direct Labor costs $56,000 Factory Overhead $28,000 Work in Process, beg. $45,000 Work in Process, end. $32,000 Show your calculations to determine the Cost of Goods Manufactured.

Correct Answerverified$50,000 + $56,000 + ...View AnswerShow Answer

Since there are few rules to restrict how an organization chooses to arrange its own internal data for decision making, managerial accounting provides ample opportunity for creativity and change.

Correct AnswerverifiedShow Answer

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$50,000 + $56,000 + ...
View Answer

Correct Answer
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