CBAD 202 Exam 1 questions with 100%
correct answers
Which of the following describes the way in which total fixed costs behave? - correct answer ✔✔They
will remain the same throughout production levels within the relevant range
Only manufacturing companies have finished goods inventory - correct answer ✔✔True
London Plastics has monthly fixed costs of $84,000, while its variable costs are $4.70 per unit. If the sales
price of a unit is $15.50 and London Plastics sells 14,000 units, the company's total variable cost will be -
correct answer ✔✔$65,800 ($4.70 x 14,000)
Product costs include - correct answer ✔✔Direct materials, direct labor, manufacturing overhead
(indirect materials and labor)
Job order costing might be used by a - correct answer ✔✔Hospital
Manufacturing overhead includes - correct answer ✔✔Indirect materials, indirect labor, and all other
indirect costs related to the manufacturing facility (depreciation on factory buildings and machines, and
insurance, taxes, and maintenance on factory facility)
Indirect materials, indirect labor, and indirect manufacturing costs are what type of manufacturing cost?
- correct answer ✔✔Manufacturing overhead
Managerial accounting information is always based on historical transactions with external parties -
correct answer ✔✔False
If a company wants to determine a product's cost, it must assign both direct and indirect costs. - correct
answer ✔✔True
, Which of the following is an example of manufacturing overhead expense in a factory? - correct answer
✔✔Wages of factory maintenance personnel
The primary purpose of managerial accounting information is to help external users make investing and
lending decisions. - correct answer ✔✔False
Managerial accounting develops reports that help internal parties effectively and efficiently run the
company. - correct answer ✔✔True
Country Furniture Company manufactures furniture at its Akron, Ohio, factory. Some of its costs from the
past year include:
Depreciation on sales office$ 9900
Depreciation on factory equipment16,000
Factory supervisor salary50,400
Sales commissions23,800
Lubricants used in factory equipment3600
Insurance costs for factory21,700
Wages paid to maintenance workers115,200
Fabric used to upholster furniture10,100
Freight-in (on raw materials)3500
Costs of delivery to customers9300
Wages paid to assembly-line workers115,100
Lumber used to build product82,500
Utilities in factory54,200
Utilities in sales office26,700
Direct labor costs for Country Furniture Company totaled - correct answer ✔✔$115,100 (wages paid to
assembly-line workers)
correct answers
Which of the following describes the way in which total fixed costs behave? - correct answer ✔✔They
will remain the same throughout production levels within the relevant range
Only manufacturing companies have finished goods inventory - correct answer ✔✔True
London Plastics has monthly fixed costs of $84,000, while its variable costs are $4.70 per unit. If the sales
price of a unit is $15.50 and London Plastics sells 14,000 units, the company's total variable cost will be -
correct answer ✔✔$65,800 ($4.70 x 14,000)
Product costs include - correct answer ✔✔Direct materials, direct labor, manufacturing overhead
(indirect materials and labor)
Job order costing might be used by a - correct answer ✔✔Hospital
Manufacturing overhead includes - correct answer ✔✔Indirect materials, indirect labor, and all other
indirect costs related to the manufacturing facility (depreciation on factory buildings and machines, and
insurance, taxes, and maintenance on factory facility)
Indirect materials, indirect labor, and indirect manufacturing costs are what type of manufacturing cost?
- correct answer ✔✔Manufacturing overhead
Managerial accounting information is always based on historical transactions with external parties -
correct answer ✔✔False
If a company wants to determine a product's cost, it must assign both direct and indirect costs. - correct
answer ✔✔True
, Which of the following is an example of manufacturing overhead expense in a factory? - correct answer
✔✔Wages of factory maintenance personnel
The primary purpose of managerial accounting information is to help external users make investing and
lending decisions. - correct answer ✔✔False
Managerial accounting develops reports that help internal parties effectively and efficiently run the
company. - correct answer ✔✔True
Country Furniture Company manufactures furniture at its Akron, Ohio, factory. Some of its costs from the
past year include:
Depreciation on sales office$ 9900
Depreciation on factory equipment16,000
Factory supervisor salary50,400
Sales commissions23,800
Lubricants used in factory equipment3600
Insurance costs for factory21,700
Wages paid to maintenance workers115,200
Fabric used to upholster furniture10,100
Freight-in (on raw materials)3500
Costs of delivery to customers9300
Wages paid to assembly-line workers115,100
Lumber used to build product82,500
Utilities in factory54,200
Utilities in sales office26,700
Direct labor costs for Country Furniture Company totaled - correct answer ✔✔$115,100 (wages paid to
assembly-line workers)
