Reference no: EM13918171

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

• Period costs.
• Balance sheet costs.
• Product costs.
• Capitalized costs.
• General costs.

2. Which of the following items are management concepts that were created to improve companies' performances?

• Total quality management.
• Customer orientation.
• Continuous improvement.
• Just-in-time manufacturing.
• All of the above are ways that management can improve companies' performances.

3. Factory overhead costs normally include all of the following except:

• Factory rent.
• Indirect material costs.
• Machinery oil.
• Selling costs.
• Indirect labor costs.

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

• Property taxes on maintenance machinery.
• Metal doorknobs used on wood cabinets produced.
• Wages of the factory janitor.
• Expired insurance on factory equipment.
• Small tools used in production.

5. The three major cost components of a manufactured product are:

• General, selling, and administrative costs.
• Direct materials, direct labor, and factory overhead.
• Differential costs, opportunity costs, and sunk costs.
• Marketing, selling, and administrative costs.
• Indirect labor, indirect materials, and miscellaneous factory expenses.

6. Managerial accounting is different from financial accounting in that:

• Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions.
• Managerial accounting is used extensively by investors, whereas financial accounting is used only by creditors.
• Managerial accounting is more focused on the organization as a whole and financial accounting is more focused on subdivisions of the organization.
• Managerial accounting is mainly used to set stock prices.
• Managerial accounting never includes nonmonetary information.

7. Which of the following statements is correct concerning the Days' sales in raw materials inventory?

• Most companies generally prefer a high ratio.
• Reveals how much raw materials inventory is available in terms of the number of days' sales.
• Reveals how many times a company turns over its raw materials inventory in a period.
• The ratio does not need to be calculated as it is not important for a manufacturer.
• Is calculated by taking the Raw materials used/Average raw materials inventory.

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

• Cost of goods purchased.
• Ending merchandise inventory.
• Cost of goods sold.
• Beginning merchandise inventory.
• Cost of goods available.

9. A financial report that summarizes the amounts and types of costs that were incurred in the manufacturing process during the period is a:

• Managerial statement.
• Manufacturing statement.
• Merchandise statement.
• Materiality statement.
• Monetary statement.

10. Materials that are used in support of the production process but are not clearly identified with units or batches of product are called:

• General materials.
• Indirect materials.
• Direct materials.
• Secondary materials.
• Materials inventory.

11. An internal control system consists of the policies and procedures managers use to do all of the following except:

• Protect assets.
• Ensure reliable accounting.
• Urge adherence to company policies.
• Determine pricing for products.
• Promote efficient operations.

12. Period costs for a manufacturing company would flow directly to:

• Factory overhead.
• The current balance sheet.
• The current manufacturing statement.
• The current income statement.
• Job cost sheet.

13. Labor costs that are or batches of product because the labor is used to convert raw materials into finished products called are:

• Finished labor.
• Direct labor.
• Sunk labor.
• Indirect labor.
• All labor.

14. Another title for goods in process inventory is:

• Indirect materials inventory.
• Conversion costs.
• Direct materials inventory.
• Raw materials inventory.
• Work in process inventory.

15. Managerial accounting information:

• Is used mainly by external users.
• Has little to do with controlling costs.
• Can be used for control purposes but not for planning purposes.
• Involves gathering information about costs for planning and control decisions.
• Is generally the only accounting information available to managers.

16. Total manufacturing costs incurred during the year do not include:

• Direct labor.
• Direct materials used.
• Depreciation of machinery.
• Goods in process inventory, beginning balance.
• Factory supplies used.

17. A classification of costs that is useful for assigning responsibility to and evaluating managers is:

• Classification by controllability.
• Classification by relevance.
• Classification by behavior.
• Classification by function.
• Classification by traceability.

18. A mixed cost:

• Requires the future outlay of cash and is relevant for future decision making.
• Does not change with changes in the volume of activity within the relevant range.
• Contains a combination of fixed costs and variable costs.
• Has already been incurred and cannot be avoided so it is irrelevant for decision making.
• Is directly traceable to a cost object.

19. The model whose goal is to eliminate waste while satisfying the customer and providing a positive return to the company is:

• Continuous improvement.
• Managerial accounting.
• Lean business model.
• Customer orientation.
• Total quality management.

20. Product costs:

• Are expenditures necessary and integral to finished products.
• Include selling and administrative expenses.
• Are costs that do not vary with the volume of activity.
• Are costs that vary with the volume of activity.
• Are expenditures identified more with a time period rather than with finished products.