Reference no: EM13919694

Shown below are a number of costs incurred last year at Mecca Publishing Co., a manufacturer of elementary school textbooks:

Solvents and cleaners used by the custodians to clean the textbook printing presses $500
Depreciation on the automobiles used by sales representatives $4,200
Fire insurance on factory building $2,000
Shipping costs on textbooks sold $3,700

1. What is the total of the manufacturing overhead costs above?

$500
$2,500
$6,200
$6,700

2. All of the following are examples of product costs except:

depreciation on the company's retail outlets.
salary of the plant manager.
insurance on the factory equipment.
rental costs of the factory facility.

3. The person MOST likely to use management accounting information is a(n):

banker evaluating a credit application
shareholder evaluating a stock investment
governmental taxing authority
assembly department supervisor

4. Management accounting:

focuses on estimating future revenues, costs, and other measures to forecast activities and their results.
provides information about the company as a whole.
reports information that has occurred in the past that is verifiable and reliable.
provides information that is generally available only on a quarterly or annual basis.

5. Consider the following costs incurred in a recent period:
Direct materials $33,000
Depreciation on factory equipment $12,000
Factory janitor's salary $23,000
Direct labor $28,000
Utilities for factory $9,000
Selling expense $16,000
Production supervisor's salary $34,000
Administrative expenses $21,000

What was the total amount of the period costs listed above for the period?

$78,000
$71,000
$46,000
$37,000

6. All of the following are characteristics of a pull production system EXCEPT:

Inventories are reduced to a minimum by purchasing raw materials and producing units only as needed to meet consumer demand.
Raw materials are released to a production far in advance of being needed to ensure no interruptions in work flows due to shortages of raw materials.
Products are completed just in time to be shipped to customers.
Manufactured parts are completed just in time to be assembled into products.

7. A plant manufactures several different products. The wages of the maintenance staff in the plant can be classified as a (an):

direct cost
product cost
opportunity cost
nonmanufacturing cost

8. The plans of management are often expressed formally in:

financial statements.
performance reports.
budgets.
ledgers.

9. Which of the following statements refers to management accounting information?

There are no regulations governing the reports.
The reports are generally delayed and historical.
The audience tends to be stockholders, creditors, and tax authorities.
The scope tends to be highly aggregate.

10. The one cost that would be classified as part of both prime cost and conversion cost would be:

indirect material
direct labor
direct material
indirect labor

11. Which of the folloiwng is NOT one of the five steps in the lean thinking model discussed in the text?

Continuously pursue perfection in the business process.
Identify value in specific products/services.
Implement an enterprise system.
Create a pull system that responds to customer orders.

12. The Institute of Management Accountants (IMA):

is a professional organization of management accountants
is a professional organization of financial accountants
issues standards for management accounting
issues standards for financial accounting

13. The Institute of Management Accountants' Standards of Ethical Conduct contains a policy regarding confidentiality that requires that management accountants:

refrain from disclosing confidential information acquired in the course of their work except when authorized by management.
refrain from disclosing confidential information acquired in the course of their work in all situations.
refrain from disclosing confidential information acquired in the course of their work except when authorized by management, unless legally obligated to do so.
refrain from disclosing confidential information acquired in the course of their work in all cases since the law requires them to do so.

14. During the month of July, direct labor cost totaled $12,000 and direct labor cost was 30% of prime cost. If total manufacturing costs during July were $86,000, the manufacturing overhead was:

$46,000
$40,000
$28,000
$74,000

15. Conversion costs consist of:

direct and indirect labor.
direct labor and direct materials.
direct labor and manufacturing overhead.
prime costs and manufacturing overhead.

16. Which of the following groups would be LEAST likely to receive detailed management accounting reports?

stockholders
customer service representatives
production supervisor
vice president of operations

17. Manufacturing overhead includes:

all direct material, direct labor and administrative costs.
all manufacturing costs except direct labor.
all manufacturing costs except direct labor and direct materials.
all selling and administrative costs.

18. The five step framework used to guide Six Sigma improvement efforts includes all of the following EXCEPT:

Analyze.
Control.
Digitize.
Measure.

19. The cost of inventory reported on the balance sheet may include the cost of all the following EXCEPT:

advertising
wages of the plant supervisor
depreciation of the factory equipment
parts used in the manufacturing process

20. A key element of any organization's strategy is identifying:

its potential shareholders
its target customers
competitor's products
employee needs