Question 1

What is the main difference between the income statement of a manufacturer and that of a merchandiser?

Accepted Answer

In the calculation of cost of goods sold...

Question 2

Continuous improvement:

Accepted Answer

A)  Is a measure of profits.
B)  Is a measure of costs.
C)  Rejects the notion of "good enough."
D)  Is not applicable to most businesses.
E)  Is possible only in service businesses.F) A) and E)
G) A) and C)

Question 3

Financial accounting relies on accepted principles that are enforced through an extensive set of rules and guidelines; on the other hand,managerial accounting systems are flexible.

Accepted Answer

A) True 
 B)False

Question 4

Just-in-time manufacturing is a system where companies manufacture products only after the orders have been received from customers.

Accepted Answer

A) True 
 B)False

Question 5

An opportunity cost is:

Accepted Answer

A)  An uncontrollable cost.
B)  A cost of potential benefit lost.
C)  A change in the cost of a component.
D)  A direct cost.
E)  A sunk cost.F) All of the above
G) None of the above

Question 6

Managerial accounting information:

Accepted Answer

A)  Is used mainly by external users.
B)  Involves gathering information about costs for planning and control decisions.
C)  Is generally the only accounting information available to managers.
D)  Can be used for control purposes but not for planning purposes.
E)  Has little to do with controlling costs.F) B) and C)
G) A) and D)

Question 7

_______________ are beliefs that distinguish right from wrong.

Accepted Answer

The answer of _______________ are beliefs that distinguish right from...

Question 8

A direct cost is a cost that is:

Accepted Answer

A)  Identifiable as controllable.
B)  Variable with respect to the volume of activity.
C)  Fixed with respect to the volume of activity.
D)  Traceable to a cost object.
E)  Sunk with respect to a cost object.F) B) and C)
G) All of the above

Question 9

Both financial and managerial accounting report monetary information; managerial accounting also reports considerable nonmonetary information.

Accepted Answer

A) True 
 B)False

Question 10

___________________________ reveals how much raw materials inventory is available in terms of the number of days' sales.

Accepted Answer

Days' sale...

Question 11

Whether a cost is controllable or not controllable by an employee is dependent on the employee's level of responsibility.

Accepted Answer

A) True 
 B)False

Question 12

The focus of financial accounting is on an organization's projects,processes,and subdivisions,and the focus of managerial accounting is on the whole organization.

Accepted Answer

A) True 
 B)False

Question 13

Period costs for a manufacturing company would flow directly to:

Accepted Answer

A)  The current income statement.
B)  Factory overhead.
C)  The current balance sheet.
D)  Job cost sheet.
E)  The current manufacturing statement.F) None of the above
G) B) and E)

Question 14

Factory overhead includes selling and administrative expenses because they are indirect costs of a product.

Accepted Answer

A) True 
 B)False

Question 15

A company manufactures coats in a large facility.One area in the production facility is an underused storage space.The company has twice turned down offers to lease out this facility.This situation is an example of what costing concept?
 How should the company handle the costing for this situation?

Accepted Answer

The situation raises an opportunity cost...

Question 16

An employee overstates his reimbursable expenses in one period in order to receive needed additional cash.Since he intends to reduce his expenses the next period by the current overstatement,this act is not considered fraudulent.

Accepted Answer

A) True 
 B)False

Question 17

The Ticky Company manufactures tacks.Costs for September were direct labor,$84,000; indirect labor,$36,700; direct materials,$55,900; factory maintenance,$4,800; factory utilities,$3,200; and insurance on plant and equipment,$700.What is Ticky Company's factory overhead for September?

Accepted Answer

The answer of The Ticky Company manufactures tacks.Costs for September...

Question 18

A company's prime costs total $3,000,000 and its conversion costs total $7,000,000.If direct materials are $1,000,000 and factory overhead is $5,000,000,then direct labor is:

Accepted Answer

A)  $4,000,000.
B)  $14,000,000.
C)  $2,000,000.
D)  $1,000,000.
E)  $3,000,000.F) A) and E)
G) C) and D)

Question 19

Expenditures necessary and integral to the manufacture of finished products are ________________ costs.

Accepted Answer

The answer of Expenditures necessary and integral to the manufacture...

Question 20

An attitude of constantly seeking ways to improve company operations,including customer service,product quality,product features,the production process,and employee interactions,is called:

Accepted Answer

A)  Continuous improvement.
B)  Customer orientation.
C)  Just-in-time.
D)  Theory of constraints.
E)  Total quality measurement.F) A) and B)
G) B) and D)

Exam 18: Managerial Accounting Concepts and Principles

The Ticky Company manufactures tacks.Costs for September were direct labor,$84,000; indirect labor,$36,700; direct materials,$55,900; factory maintenance,$4,800; factory utilities,$3,200; and insurance on plant and equipment,$700.What is Ticky Company's factory overhead for September?

Correct AnswerverifiedShow Answer

Financial accounting relies on accepted principles that are enforced through an extensive set of rules and guidelines; on the other hand,managerial accounting systems are flexible.

Correct AnswerverifiedShow Answer

Just-in-time manufacturing is a system where companies manufacture products only after the orders have been received from customers.

Correct AnswerverifiedShow Answer

Continuous improvement:

Correct AnswerverifiedShow Answer

A company manufactures coats in a large facility.One area in the production facility is an underused storage space.The company has twice turned down offers to lease out this facility.This situation is an example of what costing concept? How should the company handle the costing for this situation?

Correct AnswerverifiedThe situation raises an opportunity cost...View AnswerShow Answer

_______________ are beliefs that distinguish right from wrong.

Correct AnswerverifiedShow Answer

A company's prime costs total $3,000,000 and its conversion costs total $7,000,000.If direct materials are $1,000,000 and factory overhead is $5,000,000,then direct labor is:

Correct AnswerverifiedShow Answer

Both financial and managerial accounting report monetary information; managerial accounting also reports considerable nonmonetary information.

Correct AnswerverifiedShow Answer

Managerial accounting information:

Correct AnswerverifiedShow Answer

An opportunity cost is:

Correct AnswerverifiedShow Answer

An employee overstates his reimbursable expenses in one period in order to receive needed additional cash.Since he intends to reduce his expenses the next period by the current overstatement,this act is not considered fraudulent.

Correct AnswerverifiedShow Answer

Period costs for a manufacturing company would flow directly to:

Correct AnswerverifiedShow Answer

A direct cost is a cost that is:

Correct AnswerverifiedShow Answer

Whether a cost is controllable or not controllable by an employee is dependent on the employee's level of responsibility.

Correct AnswerverifiedShow Answer

What is the main difference between the income statement of a manufacturer and that of a merchandiser?

Correct AnswerverifiedIn the calculation of cost of goods sold...View AnswerShow Answer

___________________________ reveals how much raw materials inventory is available in terms of the number of days' sales.

Correct AnswerverifiedDays' sale...View AnswerShow Answer

An attitude of constantly seeking ways to improve company operations,including customer service,product quality,product features,the production process,and employee interactions,is called:

Correct AnswerverifiedShow Answer

The focus of financial accounting is on an organization's projects,processes,and subdivisions,and the focus of managerial accounting is on the whole organization.

Correct AnswerverifiedShow Answer

Expenditures necessary and integral to the manufacture of finished products are ________________ costs.

Correct AnswerverifiedShow Answer

Factory overhead includes selling and administrative expenses because they are indirect costs of a product.

Correct AnswerverifiedShow Answer

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The situation raises an opportunity cost...
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In the calculation of cost of goods sold...
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Days' sale...
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