MBA 700 - Module 2 Test Questions and
Answers
Question 1
Conversion costs include all of the following except:
a.depreciation on factory equipment
b.direct materials purchased
c.factory utilities
d.wages of production workers
Correct Answer
b.direct materials purchased - these are treated as prime costs
Question 2
For product costs associated with a product to be reported on the income statement:
a.The product must be transferred to Finished Goods Inventory.
b.The payment of the product must be received.
c.The product may be in any of the manufacturer's inventory accounts.
d.The product must be sold.
Correct Answer
d.The product must be sold.
Question 3
Costs incurred from converting raw materials to finished goods are known as:
a.Conversion costs
b.Direct material costs
c.Prime costs
d.Material costs
Correct Answer
a.Conversion costs
Page 1 of 21
,Question 4
Which of the following is not an objective used in the balanced scorecard approach?
a.Financial
b.Learning and growth
c.Vendor
d.Customer
Correct Answer
c.Vendor
Question 5
The Certified Management Accountant (CMA) certification:
a.includes a two-part exam, education requirements, and a work experience
requirement
b.requires an associate's degree and four years of work experience
c.is offered to managers who take special courses in accounting
d.signifies someone specializing in tax accounting
Correct Answer
a.includes a two-part exam, education requirements, and a work experience
requirement
Question 6
A scatter graph is used to test the assumption that the relationship between cost and
activity level is ________.
a.unpredictable
b.linear
c.cyclical
d.curvilinear
Correct Answer
b.linear
Page 2 of 21
, Question 7
Use the cost information below for Ruiz Incorporated to determine the total
manufacturing costs incurred during the year:
Work in Process, beginning ........................... $ 54,000
Work in Process, ending ............................ 39,000
Raw Materials Inventory, beginning ..... 94,000
Raw Materials Inventory, ending .......... 25,000
Direct materials used .................................. $ 14,500
Total factory overhead .................................... 7,500
Direct labor used ......................................... 28,500
a.
$15,000
b.
$50,500
c.
$97,000
d.
$104,500
Correct Answer
Total manufacturing cost=direct material+direct labor+factory overhead
=$14,500 + $28,500 + $7,500
which is equal to
=$50,500
Page 3 of 21
Answers
Question 1
Conversion costs include all of the following except:
a.depreciation on factory equipment
b.direct materials purchased
c.factory utilities
d.wages of production workers
Correct Answer
b.direct materials purchased - these are treated as prime costs
Question 2
For product costs associated with a product to be reported on the income statement:
a.The product must be transferred to Finished Goods Inventory.
b.The payment of the product must be received.
c.The product may be in any of the manufacturer's inventory accounts.
d.The product must be sold.
Correct Answer
d.The product must be sold.
Question 3
Costs incurred from converting raw materials to finished goods are known as:
a.Conversion costs
b.Direct material costs
c.Prime costs
d.Material costs
Correct Answer
a.Conversion costs
Page 1 of 21
,Question 4
Which of the following is not an objective used in the balanced scorecard approach?
a.Financial
b.Learning and growth
c.Vendor
d.Customer
Correct Answer
c.Vendor
Question 5
The Certified Management Accountant (CMA) certification:
a.includes a two-part exam, education requirements, and a work experience
requirement
b.requires an associate's degree and four years of work experience
c.is offered to managers who take special courses in accounting
d.signifies someone specializing in tax accounting
Correct Answer
a.includes a two-part exam, education requirements, and a work experience
requirement
Question 6
A scatter graph is used to test the assumption that the relationship between cost and
activity level is ________.
a.unpredictable
b.linear
c.cyclical
d.curvilinear
Correct Answer
b.linear
Page 2 of 21
, Question 7
Use the cost information below for Ruiz Incorporated to determine the total
manufacturing costs incurred during the year:
Work in Process, beginning ........................... $ 54,000
Work in Process, ending ............................ 39,000
Raw Materials Inventory, beginning ..... 94,000
Raw Materials Inventory, ending .......... 25,000
Direct materials used .................................. $ 14,500
Total factory overhead .................................... 7,500
Direct labor used ......................................... 28,500
a.
$15,000
b.
$50,500
c.
$97,000
d.
$104,500
Correct Answer
Total manufacturing cost=direct material+direct labor+factory overhead
=$14,500 + $28,500 + $7,500
which is equal to
=$50,500
Page 3 of 21
