Question 1

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 2

The primary goal of managerial accounting is to provide information to:

Accepted Answer

A)   investors
B)   creditors
C)   management
D)   external auditorsE) A) and C)
F) B) and C)

Question 3

Which one of the following will not be found on the balance sheet of a manufacturing company?

Accepted Answer

A)   cost of goods sold
B)   materials
C)   work in process
D)   finished goodsE) A) and C)
F) B) and C)

Question 4

The cost of a manufactured product generally consists of direct materials cost, direct labor cost, and factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 5

Factory overhead cost is sometimes referred to as factory burden.

Accepted Answer

A) True 
 B)False

Question 6

The plant manager's salary in a manufacturing business would be considered an indirect cost.

Accepted Answer

A) True 
 B)False

Question 7

Direct labor and direct materials are classified as:

Accepted Answer

A)   product costs and expensed when the goods are sold
B)   product costs and expensed when incurred
C)   period costs and expensed when incurred
D)   period costs and expensed when the goods are soldE) C) and D)
F) B) and C)

Question 8

Period costs include:

Accepted Answer

A)   current assets on the balance sheet
B)   current liabilities on the balance sheet
C)   operating costs that are shown on the income statement when products are sold
D)   operating costs that are shown on the income statement in the period in which they are incurredE) All of the above
F) None of the above

Question 9

Rent expense on a factory building would be treated as a(n) :

Accepted Answer

A)   period cost
B)   product cost
C)   direct cost
D)   both A and C are correctE) A) and C)
F) A) and B)

Question 10

Indirect labor and indirect materials would be part of factory overhead.

Accepted Answer

A) True 
 B)False

Question 11

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) B) and D)
F) None of the above

Question 12

What term is used to describe the process of monitoring operating results and comparing actual results with the expected results?

Accepted Answer

A)   Improving
B)   Controlling
C)   Directing
D)   PlanningE) B) and C)
F) C) and D)

Question 13

Period costs can be found in the balance sheet.

Accepted Answer

A) True 
 B)False

Question 14

The cost of goods sold for Heedy manufacturing in 2011 was $233,000. The January 1, 2011, finished goods inventory balance was $31,600, and the December 31, 2011, finished goods inventory balance was $24,200. Cost of goods manufactured during the period was:

Accepted Answer

A)   $233,000
B)   $225,600
C)   $288,800
D)   $240,400E) B) and C)
F) A) and B)

Question 15

Work in process inventory increased by $20,000 during 2011. Cost of goods manufactured was $180,000. Total manufacturing costs incurred in 2011 are:

Accepted Answer

A)   $198,000
B)   $160,000
C)   $189,000
D)   $200,000E) All of the above
F) C) and D)

Question 16

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) B) and D)
F) B) and C)

Question 17

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) All of the above
F) C) and D)

Question 18

Only the value of the inventory that is sold will appear in the income statement.

Accepted Answer

A) True 
 B)False

Question 19

The controller's staff consists of management accountants responsible for systems and procedures, general accounting, budgets, taxes, and cost accounting.

Accepted Answer

A) True 
 B)False

Question 20

Planning is the process of developing the company's objectives or goals and translating these objectives into courses of action.

Accepted Answer

A) True 
 B)False

Exam 16: Managerial Accounting Concepts and Principles

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

Correct AnswerverifiedShow Answer

Rent expense on a factory building would be treated as a(n) :

Correct AnswerverifiedShow Answer

The controller's staff consists of management accountants responsible for systems and procedures, general accounting, budgets, taxes, and cost accounting.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The cost of a manufactured product generally consists of direct materials cost, direct labor cost, and factory overhead cost.

Correct AnswerverifiedShow Answer

Period costs include:

Correct AnswerverifiedShow Answer

Period costs can be found in the balance sheet.

Correct AnswerverifiedShow Answer

Managerial accounting

Correct AnswerverifiedShow Answer

Only the value of the inventory that is sold will appear in the income statement.

Correct AnswerverifiedShow Answer

Planning is the process of developing the company's objectives or goals and translating these objectives into courses of action.

Correct AnswerverifiedShow Answer

Factory overhead cost is sometimes referred to as factory burden.

Correct AnswerverifiedShow Answer

The plant manager's salary in a manufacturing business would be considered an indirect cost.

Correct AnswerverifiedShow Answer

Work in process inventory increased by $20,000 during 2011. Cost of goods manufactured was $180,000. Total manufacturing costs incurred in 2011 are:

Correct AnswerverifiedShow Answer

What term is used to describe the process of monitoring operating results and comparing actual results with the expected results?

Correct AnswerverifiedShow Answer

The cost of goods sold for Heedy manufacturing in 2011 was $233,000. The January 1, 2011, finished goods inventory balance was $31,600, and the December 31, 2011, finished goods inventory balance was $24,200. Cost of goods manufactured during the period was:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The primary goal of managerial accounting is to provide information to:

Correct AnswerverifiedShow Answer

Indirect labor and indirect materials would be part of factory overhead.

Correct AnswerverifiedShow Answer

Direct labor and direct materials are classified as:

Correct AnswerverifiedShow Answer

Which one of the following will not be found on the balance sheet of a manufacturing company?

Correct AnswerverifiedShow Answer

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