ACCT 526 MIDTERM EXAM UPDATED
QUESTIONS WITH VERIFIED CORRECT
ANSWERS
◉ The cost of delivering a product to a customer is an example of:
a.a conversion cost.
b.manufacturing overhead.
c.a prime cost.
d.a period cost.
Answer: d.a period cost.
◉ During May, the cost of goods manufactured was $60,000. The
beginning finished goods inventory for the month was $22,000, and
the ending finished goods inventory was $28,000. What was the cost
of goods sold for May?
a.$110,000
b.$64,000
c.$32,000
d.$54,000
Answer: d.$54,000
28,000‑22,000=6,000
60,000‑6,000=54,000
,◉ The cost of research and development activities is classified as:
Answer: administrative cost.
◉ Wages paid to a factory supervisor are treated as:
Answer: a product cost but not as a direct labor cost.
◉ Direct material cost and direct labor cost are a part of:
Answer: product costs.
◉ Selling and administrative costs are treated as:
Answer: period costs.
◉ The following costs were incurred by ABC Company in January:
Direct materials$104,000
Direct labor79,000
Manufacturing overhead65,000
Selling expense25,000
Administrative salaries7,000
Determine ABC's total product cost.
a.$280,000
b.$266,000
,c.$298,000
d.$248,000
Answer: d.$248,000
$104,000 + $79,000 + $65,000 = $248,000
◉ Beta Information Systems designs and installs accounting
software. Last month, Beta had software licensing costs of $11,000,
software technicians' costs of $44,000, and research and
development costs of $69,000. Selling expenses totaled $7,800, and
administrative expenses amounted to $9,000. Sales totaled
$190,000. Determine the operating profit of Beta Information
Systems.
a.$57,000
b.$66,000
c.$49,200
d.$58,200
Answer: c.$49,200
$190,000 ‑ $11,000 ‑ $44,000 ‑ $69,000 ‑ $7,800 ‑ $9,000 = $49,200
◉ Which of the following items appear on the income statement of a
service firm?
a.Manufacturing overhead
, b.Gross margin
c.Cost of goods sold
d.Operating expenses
Answer: d.Operating expenses
◉ Gross margin is computed as:
Answer: sales revenue minus cost of goods sold.
◉ Alpha Company manufactures computers. On July 1, Alpha had
$76,000 of materials in inventory. During the month of July, the
company purchased $330,000 of materials. On July 31, materials
inventory equaled $47,000. Determine the cost of direct materials
used in production for the month of July.
a.$406,000
b.$301,000
c.$283,000
d.$359,000
Answer: d.$359,000
$76,000 + $330,000 ‑ $47,000 = $359,000
◉ The cost of goods sold is:
QUESTIONS WITH VERIFIED CORRECT
ANSWERS
◉ The cost of delivering a product to a customer is an example of:
a.a conversion cost.
b.manufacturing overhead.
c.a prime cost.
d.a period cost.
Answer: d.a period cost.
◉ During May, the cost of goods manufactured was $60,000. The
beginning finished goods inventory for the month was $22,000, and
the ending finished goods inventory was $28,000. What was the cost
of goods sold for May?
a.$110,000
b.$64,000
c.$32,000
d.$54,000
Answer: d.$54,000
28,000‑22,000=6,000
60,000‑6,000=54,000
,◉ The cost of research and development activities is classified as:
Answer: administrative cost.
◉ Wages paid to a factory supervisor are treated as:
Answer: a product cost but not as a direct labor cost.
◉ Direct material cost and direct labor cost are a part of:
Answer: product costs.
◉ Selling and administrative costs are treated as:
Answer: period costs.
◉ The following costs were incurred by ABC Company in January:
Direct materials$104,000
Direct labor79,000
Manufacturing overhead65,000
Selling expense25,000
Administrative salaries7,000
Determine ABC's total product cost.
a.$280,000
b.$266,000
,c.$298,000
d.$248,000
Answer: d.$248,000
$104,000 + $79,000 + $65,000 = $248,000
◉ Beta Information Systems designs and installs accounting
software. Last month, Beta had software licensing costs of $11,000,
software technicians' costs of $44,000, and research and
development costs of $69,000. Selling expenses totaled $7,800, and
administrative expenses amounted to $9,000. Sales totaled
$190,000. Determine the operating profit of Beta Information
Systems.
a.$57,000
b.$66,000
c.$49,200
d.$58,200
Answer: c.$49,200
$190,000 ‑ $11,000 ‑ $44,000 ‑ $69,000 ‑ $7,800 ‑ $9,000 = $49,200
◉ Which of the following items appear on the income statement of a
service firm?
a.Manufacturing overhead
, b.Gross margin
c.Cost of goods sold
d.Operating expenses
Answer: d.Operating expenses
◉ Gross margin is computed as:
Answer: sales revenue minus cost of goods sold.
◉ Alpha Company manufactures computers. On July 1, Alpha had
$76,000 of materials in inventory. During the month of July, the
company purchased $330,000 of materials. On July 31, materials
inventory equaled $47,000. Determine the cost of direct materials
used in production for the month of July.
a.$406,000
b.$301,000
c.$283,000
d.$359,000
Answer: d.$359,000
$76,000 + $330,000 ‑ $47,000 = $359,000
◉ The cost of goods sold is:
