Question 1

What is the primary criterion for the preparation of managerial accounting reports?

Accepted Answer

A)   Relevance of the reports
B)   Meet the manager needs
C)   Timing of the reports
D)   Cost of the reportsE) C) and D)
F) B) and C)

Question 2

Materials must have which two qualities in order to be classified as direct materials?

Accepted Answer

A)   They must be classified as both prime costs and conversion costs.
B)   They must be introduced into the process in both work-in-process inventories and finished goods inventories.
C)   They must be an integral part of the finished product, but can be an insignificant portion of the total product cost.
D)   They must be an integral part of the finished product and be a significant portion of the total product cost.E) C) and D)
F) A) and B)

Question 3

Which of the following statements is false?

Accepted Answer

A)   There is no overlap between financial and managerial accounting.
B)   Managerial accounting sometimes relies on past information.
C)   Managerial accounting does not need to conform to GAAP
D)   Financial accounting must conform to GAAP.E) C) and D)
F) B) and D)

Question 4

Cost of goods manufactured is equal to:

Accepted Answer

A)   total manufacturing costs plus ending materials inventory less beginning materials inventory
B)   cost of goods sold plus beginning work in process inventory less ending work in process inventory
C)   total manufacturing costs plus ending work in process inventory less beginning work in process inventory
D)   total manufacturing costs plus beginning work in process inventory less ending work in process inventoryE) A) and D)
F) None of the above

Question 5

Which of the following is false in regards to direct materials for an auto manufacturer?

Accepted Answer

A)   Steel would probably be a direct material.
B)   Upholstery fabric would probably be a direct material
C)   Oil to lubricate factory machines would not be a direct material.
D)   Small plastic clips to hold on door panels, that become part of the auto, must be accounted for as direct materials.E) B) and C)
F) A) and C)

Question 6

Prime costs are the combination of direct labor costs and factory overhead costs.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is considered a part of factory overhead cost?

Accepted Answer

A)   Sales commissions
B)   Depreciation of factory buildings
C)   Depreciation of office equipment
D)   Direct materials usedE) B) and C)
F) C) and D)

Question 8

Which of the following accounts will be found on the income statement?

Accepted Answer

A)   inventory
B)   work in process
C)   finished goods
D)   cost of goods soldE) None of the above
F) C) and D)

Question 9

Another term often used to refer to factory overhead is:

Accepted Answer

A)   surplus
B)   period cost
C)   supervisory cost
D)   factory burdenE) None of the above
F) A) and B)

Question 10

Prime costs are

Accepted Answer

A)   direct materials and factory overhead
B)   direct materials and direct labor
C)   direct labor and factory overhead
D)   period costs and factory overheadE) A) and B)
F) C) and D)

Question 11

The Zoe Corporation has the following information for the month of March. Prepare a (a) schedule of cost of goods manufactured, (b) an income statement for the month ended March 31, and (c) prepare only the inventory section of the balance sheet.

Accepted Answer

The answer of The Zoe Corporation has the following information...

Question 12

Which of the following is not a prime cost?

Accepted Answer

A)   Supervisor's wages
B)   Direct labor wages
C)   Machine operator wages
D)   Assembly line wagesE) A) and B)
F) B) and D)

Question 13

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 14

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

Accepted Answer

A) True 
 B)False

Question 15

Cost of oil used to lubricate factory machinery and equipment is an example of a direct materials cost.

Accepted Answer

A) True 
 B)False

Question 16

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

Question 17

Cost of goods manufactured during 2011 is $240, work in process inventory on December 31, 2011, is $50. Work in process inventory during 2011 decreased by 60%. Total manufacturing costs incurred during 2011 amount to:

Accepted Answer

A)   $190
B)   $165
C)   $290
D)   $315E) A) and C)
F) B) and D)

Question 18

The following are all product costs except:

Accepted Answer

A)   Direct materials
B)   Sales and administrative expenses
C)   Direct labor
D)   Factory overheadE) C) and D)
F) B) and C)

Question 19

Conversion costs are

Accepted Answer

A)   direct materials and direct labor
B)   direct materials and factory overhead
C)   factory overhead and direct labor
D)   direct materials and indirect laborE) C) and D)
F) A) and C)

Question 20

What is the purpose of the Statement of Cost of Goods Manufactured?

Accepted Answer

A)   to determine the ending materials inventory
B)   to determine the ending work in process inventory
C)   to determine the amounts transferred to finished goods
D)   all of the answers are trueE) B) and D)
F) None of the above

Exam 15: Managerial Accounting Concepts and Principles

Materials must have which two qualities in order to be classified as direct materials?

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Which of the following statements is false?

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

Correct AnswerverifiedShow Answer

Conversion costs are

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Cost of oil used to lubricate factory machinery and equipment is an example of a direct materials cost.

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What is the purpose of the Statement of Cost of Goods Manufactured?

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Direct labor and direct materials are classified as:

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Which of the following is not a prime cost?

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Prime costs are

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What is the primary criterion for the preparation of managerial accounting reports?

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Which of the following is false in regards to direct materials for an auto manufacturer?

Correct AnswerverifiedShow Answer

The Zoe Corporation has the following information for the month of March. Prepare a (a) schedule of cost of goods manufactured, (b) an income statement for the month ended March 31, and (c) prepare only the inventory section of the balance sheet.

Correct AnswerverifiedShow Answer

Another term often used to refer to factory overhead is:

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Cost of goods manufactured is equal to:

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Cost of goods manufactured during 2011 is $240, work in process inventory on December 31, 2011, is $50. Work in process inventory during 2011 decreased by 60%. Total manufacturing costs incurred during 2011 amount to:

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Which of the following accounts will be found on the income statement?

Correct AnswerverifiedShow Answer

Prime costs are the combination of direct labor costs and factory overhead costs.

Correct AnswerverifiedShow Answer

Which of the following is considered a part of factory overhead cost?

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The following are all product costs except:

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

Correct AnswerverifiedShow Answer

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