Question 1

The process of identifying costs as direct or indirect is referred to as classifying costs by ____________.

Accepted Answer

The answer of The process of identifying costs as direct...

Question 2

The management concept of customer orientation causes a company to spend large amounts on advertising to convince customers to buy the company's standard products.

Accepted Answer

A) True 
 B)False

Question 3

A manufacturer's inventory that is not completely finished is called __________________.

Accepted Answer

The answer of A manufacturer's inventory that is not completely...

Question 4

The management concept of customer orientation encourages a company to set up its production system to produce large quantities of the same product for all customers.

Accepted Answer

A) True 
 B)False

Question 5

Cost concepts such as variable, fixed, mixed, direct and indirect apply only to manufacturers and not to service companies.

Accepted Answer

A) True 
 B)False

Question 6

Products that are in the process of being manufactured but are not yet complete are called:

Accepted Answer

A)   Raw materials inventory.
B)   Conversion costs.
C)   Cost of goods sold.
D)   Goods in process inventory.
E)   Finished goods inventory.F) C) and D)
G) D) and E)

Question 7

Identify the three categories of manufacturing costs.

Accepted Answer

The three basic cost elements ...

Question 8

Which of the following costs is not included in factory overhead?

Accepted Answer

A)   Payroll taxes on the wages of supervisory factory workers.
B)   Indirect labor.
C)   Depreciation of manufacturing equipment.
D)   Manufacturing supplies used.
E)   Direct materials.F) All of the above
G) B) and E)

Question 9

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) D) and E)
G) B) and C)

Question 10

A management concept that encourages all managers and employees to be in tune with the wants and needs of customers, and which leads to flexible product designs and production processes, is called:

Accepted Answer

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

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Period costs are incurred by purchasing merchandise or manufacturing finished goods.

Accepted Answer

A) True 
 B)False

Question 13

Under a just-in-time manufacturing system, large quantities of inventory are accumulated throughout the factory to be certain that needed components are available each time that they are needed.

Accepted Answer

A) True 
 B)False

Question 14

Materials that are used in support of the production process but are not clearly identified with units or batches of product are called:

Accepted Answer

A)   Secondary materials.
B)   General materials.
C)   Direct materials.
D)   Indirect materials.
E)   Materials inventory.F) A) and D)
G) D) and E)

Question 15

The following information pertains to the Hewett Corporation. Calculate the cost of goods sold for the period:

Accepted Answer

A)   $250,000.
B)   $290,000.
C)   $242,000.
D)   $258,000.
E)   $246,000.F) None of the above
G) B) and D)

Question 16

All of the following statements regarding manufacturing costs are True except:

Accepted Answer

A)   Direct material costs that increase with production are called variable costs.
B)   The reporting of fixed and variable costs separately is not helpful to managers in analyzing cost behavior.
C)   When overhead costs vary with production, they are called variable costs.
D)   When overhead costs don't vary with production, they are called fixed overhead.
E)   Overhead can be both variable and fixed.F) A) and D)
G) All of the above

Question 17

Whitman Products and Rockland Industries report the following information at December 31:  Required:
(a) Which company is a manufacturer? Explain.
(b) Prepare the Current Asset Section of the Balance Sheet for the manufacturer.

Accepted Answer

The answer of Whitman Products and Rockland Industries report the...

Question 18

An out-of-pocket cost requires a future cash outlay and is relevant for decision making.

Accepted Answer

A) True 
 B)False

Question 19

Product costs can be classified as one of three types: direct materials, direct labor, or overhead.

Accepted Answer

A) True 
 B)False

Question 20

Goods a company acquires to use in making products are called:

Accepted Answer

A)   Cost of goods sold.
B)   Raw materials inventory.
C)   Finished goods inventory.
D)   Goods in process inventory.
E)   Conversion costs.F) B) and C)
G) All of the above

Exam 18: Managerial Accounting Concepts and Principles

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

The process of identifying costs as direct or indirect is referred to as classifying costs by ____________.

Correct AnswerverifiedShow Answer

Goods a company acquires to use in making products are called:

Correct AnswerverifiedShow Answer

Identify the three categories of manufacturing costs.

Correct AnswerverifiedThe three basic cost elements ...View AnswerShow Answer

The management concept of customer orientation encourages a company to set up its production system to produce large quantities of the same product for all customers.

Correct AnswerverifiedShow Answer

Products that are in the process of being manufactured but are not yet complete are called:

Correct AnswerverifiedShow Answer

Under a just-in-time manufacturing system, large quantities of inventory are accumulated throughout the factory to be certain that needed components are available each time that they are needed.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Materials that are used in support of the production process but are not clearly identified with units or batches of product are called:

Correct AnswerverifiedShow Answer

An out-of-pocket cost requires a future cash outlay and is relevant for decision making.

Correct AnswerverifiedShow Answer

All of the following statements regarding manufacturing costs are True except:

Correct AnswerverifiedShow Answer

Product costs can be classified as one of three types: direct materials, direct labor, or overhead.

Correct AnswerverifiedShow Answer

Period costs are incurred by purchasing merchandise or manufacturing finished goods.

Correct AnswerverifiedShow Answer

The following information pertains to the Hewett Corporation. Calculate the cost of goods sold for the period:

Correct AnswerverifiedShow Answer

A manufacturer's inventory that is not completely finished is called __________________.

Correct AnswerverifiedShow Answer

A management concept that encourages all managers and employees to be in tune with the wants and needs of customers, and which leads to flexible product designs and production processes, is called:

Correct AnswerverifiedShow Answer

Cost concepts such as variable, fixed, mixed, direct and indirect apply only to manufacturers and not to service companies.

Correct AnswerverifiedShow Answer

Whitman Products and Rockland Industries report the following information at December 31: Required: (a) Which company is a manufacturer? Explain. (b) Prepare the Current Asset Section of the Balance Sheet for the manufacturer.

Correct AnswerverifiedShow Answer

Which of the following costs is not included in factory overhead?

Correct AnswerverifiedShow Answer

The management concept of customer orientation causes a company to spend large amounts on advertising to convince customers to buy the company's standard products.

Correct AnswerverifiedShow Answer

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The three basic cost elements ...
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