Q1. Costs that flow directly to the current income statement are called:
A. Period costs.
B. Balance sheet costs.
C. Product costs.
D. Capitalized costs.
E. General costs.
Q2. Which of the following items are management concepts that were created to improve companies' performances?
A. Total quality management.
B. Customer orientation.
C. Continuous improvement.
D. Just-in-time manufacturing.
E. All of the above are ways that management can improve companies' performances.
Q3. Factory overhead costs normally include all of the following except:
A. Factory rent.
B. Indirect material costs.
C. Machinery oil.
D. Selling costs.
E. Indirect labor costs.
Q4. Which of the following costs would not be classified as factory overhead?
A. Property taxes on maintenance machinery.
B. Metal doorknobs used on wood cabinets produced.
C. Wages of the factory janitor.
D. Expired insurance on factory equipment.
E. Small tools used in production.
Q5. The three major cost components of a manufactured product are:
A. General, selling, and administrative costs.
B. Direct materials, direct labor, and factory overhead.
C. Differential costs, opportunity costs, and sunk costs.
D. Marketing, selling, and administrative costs.
E. Indirect labor, indirect materials, and miscellaneous factory expenses.
Q6. Managerial accounting is different from financial accounting in that:
A. Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions.
B. Managerial accounting is used extensively by investors, whereas financial accounting is used only by creditors.
C. Managerial accounting is more focused on the organization as a whole and financial accounting is more focused on subdivisions of the organization.
D. Managerial accounting is mainly used to set stock prices.
E. Managerial accounting never includes nonmonetary information.
Q7. Which of the following statements is correct concerning the Days' sales in raw materials inventory?
A. Most companies generally prefer a high ratio.
B. Reveals how much raw materials inventory is available in terms of the number of days' sales.
C. Reveals how many times a company turns over its raw materials inventory in a period.
D. The ratio does not need to be calculated as it is not important for a manufacturer.
E. Is calculated by taking the Raw materials used/Average raw materials inventory.
Q8. A manufacturing firm's cost of goods manufactured is equivalent to a merchandising firm's:
A. Cost of goods purchased.
B. Ending merchandise inventory.
C. Cost of goods sold.
D. Beginning merchandise inventory.
E. Cost of goods available.
Q9. A financial report that summarizes the amounts and types of costs that were incurred in the manufacturing process during the period is a:
A. Managerial statement.
B. Manufacturing statement.
C. Merchandise statement.
D. Materiality statement.
E. Monetary statement.
Q10. Materials that are used in support of the production process but are not clearly identified with units or batches of product are called:
A. General materials.
B. Indirect materials.
C. Direct materials.
D. Secondary materials.
E. Materials inventory.
Q11. An internal control system consists of the policies and procedures managers use to do all of the following except:
A. Protect assets.
B. Ensure reliable accounting.
C. Urge adherence to company policies.
D. Determine pricing for products.
E. Promote efficient operations.
Q12. Period costs for a manufacturing company would flow directly to:
A. Factory overhead.
B. The current balance sheet.
C. The current manufacturing statement.
D. The current income statement.
E. Job cost sheet.
Q13. Labor costs that are or batches of product because the labor is used to convert raw materials into finished products called are:
A. Finished labor.
B. Direct labor.
C. Sunk labor.
D. Indirect labor.
E. All labor.
Q14. Another title for goods in process inventory is:
A. Indirect materials inventory.
B. Conversion costs.
C. Direct materials inventory.
D. Raw materials inventory.
E. Work in process inventory.
Q15. Managerial accounting information:
A. Is used mainly by external users.
B. Has little to do with controlling costs.
C. Can be used for control purposes but not for planning purposes.
D. Involves gathering information about costs for planning and control decisions.
E. Is generally the only accounting information available to managers?
Q16. Total manufacturing costs incurred during the year do not include:
A. Direct labor.
B. Direct materials used.
C. Depreciation of machinery.
D. Goods in process inventory, beginning balance.
E. Factory supplies used.
Q17. A classification of costs that is useful for assigning responsibility to and evaluating managers is:
A. Classification by controllability.
B. Classification by relevance.
C. Classification by behavior.
D. Classification by function.
E. Classification by traceability.
Q18. A mixed cost:
A. Requires the future outlay of cash and is relevant for future decision making.
B. Does not change with changes in the volume of activity within the relevant range.
C. Contains a combination of fixed costs and variable costs.
D. Has already been incurred and cannot be avoided so it is irrelevant for decision making.
E. Is directly traceable to a cost object.
Q19. The model whose goal is to eliminate waste while satisfying the customer and providing a positive return to the company is:
A. Continuous improvement.
B. Managerial accounting.
C. Lean business model.
D. Customer orientation.
E. Total quality management.
Q20. Product costs:
A. Are expenditures necessary and integral to finished products?
B. Include selling and administrative expenses.
C. Are costs that do not vary with the volume of activity?
D. Are costs that vary with the volume of activity?
E. Are expenditures identified more with a time period rather than with finished products?