Chapter 10 An Introduction to Managerial Accounting TEST BANK......2019/2020 - $23.49   Add to cart

Looking for more study guides & notes to pass Nursing? Find more study material on our Nursing overview page 

Study guide

Chapter 10 An Introduction to Managerial Accounting TEST BANK......2019/2020

Chapter 10 An Introduction to Managerial AccountingA. An ongoing process where continuous improvement is the goal B. A competitive management program that emphasizes quality C. Information gathering and reporting activities that are restricted to those activities that add value in excess of their cost D. Managerial accounting information is measured in economic, physical, and financial terms7. Which of the following is a product cost for a construction company? A. Cost of transporting raw materials to the job site B. Selling costs C. Wages paid to the company's office manager D. All of these 8. Which of the following costs would not be classified as overhead for a company that produces small appliances? A. Assembly labor B. Plant supervisory labor C. Indirect material costs D. Plant utilities costs 9. For a manufacturing company, product costs include all of the following except: A. direct material costs. B. direct labor costs. C. research and development costs. D. overhead costs.10.During its first year of operations, Beta Company paid $16,000 for direct material and $17,000 in wages for production workers. Lease payments and utilities on the production facilities amounted to $7,000. General, selling, and administrative expenses were $6,000. The company produced 5,000 units and sold 4,000 units at a price of $15.00 a unit. The average cost to produce one unit is which of the following amounts? A. $8.00 B. $10.00 C. $9.20 D. $11.50 11.During its first year of operations, Vail Company paid $15,000 for direct materials, paid production employees $10,000 and paid general, selling, and administrative expenses of $5,000. Assuming that the average cost to produce one unit was $16 and that 2,000 units were produced during the period, how much overhead was incurred? A. $2,000 B. $5,000 C. $7,000 D. None of these 12.Why do accountants normally calculate cost per unit as an average? A. Determining the exact cost of a product is virtually impossible. B. Some manufacturing-related costs cannot be accurately traced to specific units of product. C. Even when producing multiple units of the same product, normal variations occur in the amount of materials and labor used. D. All of these are justifications for computing average unit costs.13.Which of the following costs is not considered to be a product cost? A. Raw materials costs B. Depreciation of delivery vehicles C. Wages paid to production workers D. Factory utilities costs 14.Select the incorrect statement regarding costs and expenses. A. Some costs are initially recorded as expenses while others are initially recorded as assets. B. Expenses are incurred when assets are used to generate revenue. C. Manufacturing-related costs are initially recorded as expenses. D. Non-manufacturing costs should be expensed in the period in which they are incurred. 15.Which of the following should be recorded as an asset? A. Paid for the current month's advertising cost B. Paid rent on the warehouse used to store finished goods C. Paid salary for the vice president of marketing D. Paid for raw materials to be used in production 16.Which of the following should not be recorded as an expense? A. Paid office salaries B. Paid factory maintenance costs C. Paid product advertising costs D. Paid sales commissions17.Which of the following transactions would cause net income for the period to be lower? A. Paid $1,600 cash for raw material cost B. Paid administrative salaries of $2,500 C. Depreciated production equipment for $3,000 D. Purchased $5,000 of merchandise inventory 18.Which of the following statements is true with regard to product costs versus general, selling, and administrative costs? A. Product costs associated with unsold units appear on the income statement as general expenses. B. General, selling, and administrative costs appear on the balance sheet. C. Product costs associated with units sold appear on the Income Statement as cost of goods sold expense. D. All of these 19.Which of the following statements is incorrect with regard to product costs? A. Product costs flow from the balance sheet to the income statement. B. Unlike direct material and direct labor costs, overhead costs must be allocated to C. products. D. Product costs are expensed in the period incurred. E. Depreciation on manufacturing equipment is an indirect product cost.20.Which of the following statements concerning product costs versus general, selling, and administrative costs is true? A. Product costs incurred during the period will always appear as inventory on the balance sheet. B. General, selling, and administrative costs are always expensed when cash is paid. C. Product costs may be divided between the balance sheet and income statement. D. General, selling, and administrative costs sometimes appear as inventory on the balance sheet. During its first year of operations, Martin Company paid $4,000 for direct materials and $8,500 for production workers' wages. Lease payments and utilities on the production facilities amounted to $7,500 while general, selling, and administrative expenses totaled $3,000. The company produced 5,000 units and sold 4,000 units at a price of $7.50 a unit. 21.What is the amount of gross margin for the first year? A. $20,000 B. $12,000 C. $7,500 D. $14,000 22.What is the amount of finished goods inventory for the first year? A. $4,000 B. $5,000 C. $2,500 D. $16,00023.What was Martin's net income for the first year in operation? A. $11,000 B. $7,000 C. $14,000 D. $20,000 24.Manufacturing costs that cannot be traced to specific units of product in a costeffective manner are A. manufacturing overhead costs. B. general, selling, and administrative costs. C. indirect costs. D. both A and C. 25.What is the effect on the financial statements of recording a $100 purchase of raw materials? A. Item A B. Item B C. Item C D. Item D26.What is the effect on the financial statements of making cash sales of inventory to customers? A. Item A B. Item B C. Item C D. Item D 27.Which of the following types of labor costs will not initially flow through the balance sheet? A. Salaries for sales staff B. Plant supervision C. Material handling D. Assembly labor 28.Which of the following is not classified as manufacturing overhead? A. Indirect material B. Supervisory labor C. Factory insurance D. Product delivery costs29.Abby believes her company's overhead costs are driven (affected) by the number of machine hours because the production process is heavily automated. During the period, the company produced 3,000 units of Product A requiring a total of 200 machine hours and 2,000 units of Product B requiring a total of 50 machine hours. What allocation rate should be used if the company incurs overhead costs of $10,000? A. $2 per unit B. $2 per machine hour C. $40 per unit D. $40 per machine hour The following information relates to Minimart's 2012 accounting period: 30.Based on this information, Minimart's total manufacturing costs for 2012 equal A. $75,000 B. $87,000 C. $57,000 D. $50,00031.Minimart's work in process inventory at the beginning of 2012 was $12,000, and work in process inventory at the end of 2012 was $10,000. Minimart's cost of goods manufactured in 2012 equal A. $77,000 B. $89,000 C. $59,000 D. $52,000 32.All of the following are upstream costs except: A. Research and development. B. Selling costs. C. Design costs. D. Costs to build a prototype product. 33.Select the incorrect statement regarding upstream and downstream costs. A. Profitability analysis should consider only manufacturing and downstream costs. B. Companies must recover the total cost of developing, producing, and delivering products. C. Pricing decisions must consider both upstream and downstream costs. D. The total cost per unit includes upstream, manufacturing, and downstre

Preview 4 out of 154  pages

grade_bender

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 450,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

$ 23.49
  • (0)
  Add to cart