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1  of 35

The focus of management accounting is on

 

tax preparation.

 

external reporting.

 

internal reporting.

 

auditing.

Question

2  of 35

________ is designed to meet the needs of internal decision makers.

 

Tax accounting

 

Managerial accounting

 

Financial accounting

 

Audit accounting

Question

3  of 35

The primary goal of managerial accounting is to provide information to

 

internal decision makers.

 

shareholders.

 

creditors.

 

both shareholders and creditors.

Question

4  of 35

The primary goal of financial accounting is to provide information for

 

governmental regulators.

 

creditors.

 

potential investors.

 

all of the above.

Question

5  of 35

Which of the following are the internal decision makers of a company?

 

Vendors

 

Managers

 

Shareholders

 

Customers

Question

6  of 35

Inventoriable product costs for a manufactured product include

 

the costs of direct materials, direct labor, and manufacturing overhead.

 

marketing and research and development costs.

 

the costs of direct materials and direct labor only.

 

none of the above.

Question

7  of 35

When do inventoriable costs become expenses?

 

When direct materials are purchased

 

When the manufacturing process begins

 

When the manufacturing process is completed

 

None of the above

Question

8  of 35

Manufacturers consider selling and administrative costs to be

 

period costs.

 

conversion costs.

 

inventoriable costs.

 

prime costs.

Question

9  of 35

Which of the following is an example of a period cost when manufacturing products?

 

Depreciation expense on factory equipment

 

Advertising expense

 

Indirect materials used in the factory

 

Property taxes on the plant

Question

10  of 35

Which of the following is an example of an inventoriable cost when manufacturing products?

 

Depreciation on office equipment

 

Depreciation on store building

 

Sales salaries expenses

 

Depreciation on factory equipment

Question

11  of 35

A ________ is used to accumulate the costs of a job.

 

labor time record

 

materials inventory requisition form

 

bill of materials

 

job cost record

Question

12  of 35

Which of these documents informs the storeroom to send specific materials to the factory floor?

 

Receiving report

 

Bill of materials

 

Purchase order

 

Materials requisition

Question

13  of 35

In the flow of costs, which of the following comes first?

 

Cost of goods sold

 

Finished goods inventory

 

Work in process inventory

 

Raw materials inventory

Question

14  of 35

In the flow of costs, which of the following comes last?

 

Finished goods inventory

 

Cost of goods sold

 

Raw materials inventory

 

Work in process inventory

Question

15  of 35

When used, raw materials

 

would be classified as direct materials.

 

would be classified as direct labor.

 

would be classified as indirect materials.

 

The answer cannot be determined with the information provided.

Question

16  of 35

The first step in the five-step process for costing procedure is

 

compute output in terms of equivalent units.

 

summarize total costs to account for.

 

compute the cost per equivalent unit.

 

summarize the flow of physical units.

Question

17  of 35

In Step 1 of the process costing procedure, the "total units accounted for" is the sum of

 

the units completed and transferred out plus the units in ending WIP.

 

the units in ending WIP plus the units started in production during the month.

 

the units in beginning WIP plus the units in ending WIP.

 

the units in beginning WIP plus the units completed and transferred out.

Question

18  of 35

How is the cost per equivalent unit computed?

 

Total equivalent units divided by total costs to account for

 

Total costs to account for divided by total equivalent units

 

Costs in beginning WIP inventory divided by equivalent units in beginning WIP

 

Costs added to production during the month divided by equivalent units in ending WIP

Question

19  of 35

Which item would appear last on a production cost report?

 

Cost of goods finished for the month

 

Total costs accounted for

 

Beginning WIP inventory, if any

 

Ending WIP inventory, if any

Question

20  of 35

For which of the following do you prepare calculations for equivalent units?

 

Both direct labor and manufacturing overhead

 

Both direct materials and conversion costs

 

Both direct labor and direct materials

 

Neither direct materials nor conversion costs

Question

21  of 35

When calculating a departmental overhead rate, what should the numerator be?

 

Total estimated amount of the departmental allocation base

 

Total estimated departmental overhead cost pool

 

Total estimated amount of manufacturing overhead for the factory

 

Actual quantity of the departmental allocation base used by the job

Question

22  of 35

Which of the following condition(s) favors using departmental overhead rates in place of a plantwide overhead rate?

 

A. Different departments incur different amounts and types of manufacturing overhead.

 

B. Different jobs or products use the departments to a different extent.

 

C. Both A and B.

 

D. Neither A or B.

Question

23  of 35

What will the use of departmental overhead rates generally result in?

 

The use of a separate cost allocation base for each department in the factory

 

The use of a single cost allocation base

 

The use of a single overhead cost pool for the factory

 

The use of separate cost allocation base for each activity in the factory

Question

24  of 35

Using factory utilities would most likely be classified as a ________ cost.

 

unit-level

 

batch-level

 

facility-level

 

product-level

Question

25  of 35

In ABC, how is the activity allocation rate computed?

 

The total estimated activity allocation base is divided by the total estimated activity cost pool.

 

The total estimated activity cost pool is divided by the total estimated activity allocation base.

 

The total estimated activity allocation base is multiplied by the total estimated activity cost pool.

 

You take the total estimated activity allocation base and subtract the total estimated total activity. cost pool.

Question

26  of 35

A(n) ________ cost is a cost whose total amount changes in direct proportion to a change in volume.

 

variable

 

fixed

 

mixed

 

irrelevant

Question

27  of 35

Which of the following costs is an example of a fixed cost?

 

Sales commissions

 

Salary of the plant manager

 

Direct materials

 

Delivery costs

Question

28  of 35

With respect to total variable costs, which of the following statements is true?

 

They will remain the same as production levels change within the relevant range.

 

They will decrease as production decreases within the relevant range.

 

They will decrease as production increases within the relevant range.

 

They will increase as production decreases within the relevant range.

Question

29  of 35

Total fixed costs for Taylor Incorporated are $240,000. Total costs, including both fixed and variable, are $500,000 if 125,000 units are produced. The variable cost per unit is

 

$5.92/unit.

 

$2.08/unit.

 

$4.00/unit.

 

$1.92/unit.

Question

30  of 35

Total fixed costs for Randolph Manufacturing are $754,000. Total costs, including both fixed and variable, are $1,000,000 if 150,000 units are produced. The variable cost per unit is

 

$6.67/unit.

 

$5.03/unit.

 

$11.69/unit.

 

$1.64/unit.

Question

31  of 35

Total contribution margin less total fixed expenses equals

 

contribution margin ratio.

 

operating income.

 

gross profit.

 

sales revenue.

Question

32  of 35

The unit contribution margin is computed by

 

subtracting the variable cost per unit from the sales price per unit.

 

dividing the sales revenue by variable cost per unit.

 

dividing the variable cost per unit by the sales revenue.

 

subtracting the sales price per unit from the variable cost per unit.

Question

33  of 35

Dairy Days Ice Cream sells ice cream cones for $4 per customer. Variable costs are $3 per cone. Fixed costs are $2,500 per month. What is Dairy Days' contribution margin per ice cream cone?

 

$1.00

 

$3.00

 

$0.25

 

$4.00

Question

34  of 35

Mom and Pop's Ice Cream Shoppe sells ice cream cones for $5per customer. Variable costs are $2.25 per cone. Fixed costs are $3,000 per month. What is the company's contribution margin per ice cream cone?

 

$2.25

 

$2.75

 

$0.55

 

$1.82

Question

35  of 35

Electric Jet Skis operates a Jet Ski rental business. Assume the jet skis rent for $55 for 6 hours. The variable costs are $33 per six-hour rental, and its fixed costs are $80,000 each month. What is the contribution margin per six-hour jet ski rental?

 

$33.00

 

$0.40

 

$22.00

 

$2.50

 

1  of 35

Which of the following employees is most likely to only use financial accounting information?

 

Vice president of plant operations

 

Product manager

 

Plant manager

 

Bank loan officer

 

2  of 35

Which of the following people or groups would be least likely to receive detailed managerial accounting reports?

 

CEO

 

Plant managers

 

Current shareholders

 

Sales territory managers

 

5  of 35

Which of following statements is true?

 

Managerial accounting focuses on historical transactions.

 

Financial accounting focuses on future data.

 

Management accounting focuses on relevant data.

 

Managerial accounting uses the cash basis for recording transactions.

 

6  of 35

Where would period costs be found on the financial statements?

 

Under current assets on the balance sheet

 

Under current liabilities on the balance sheet

 

As operating expenses on the income statement in the period incurred

 

As operating expenses on the income statement for a previous period

 

7  of 35

Which of the following costs include all costs associated with production of a product?

 

Inventoriable

 

Direct

 

Mixed

 

Overhead

 

8  of 35

Manufacturing overhead costs for a product include

 

direct material.

 

operating expenses.

 

indirect manufacturing costs.

 

prime costs.

 

10  of 35

Certain materials used in a manufacturing plant cannot be traced to a specific unit. What are these materials called?

 

General materials

 

Direct materials

 

Indirect materials

 

Finished materials

 

12  of 35

When direct materials are requisitioned, they flow directly into

 

cost of goods sold.

 

finished goods inventory.

 

work in process inventory.

 

manufacturing overhead.

 

14  of 35

In the flow of costs, which of the following comes third?

 

Finished goods inventory

 

Cost of goods sold

 

Raw materials inventory

 

Work in process inventory

 

17  of 35

The five steps of the process costing procedure are scrambled below. Which of the following places the steps in the correct order?

1.      Assign total costs to units completed and to units in ending WIP inventory.

2.    Summarize total costs to account for.

3.    Compute the cost per equivalent unit.

4.    Summarize the flow of physical units.

5.    Compute output in terms of equivalent units.

The correct order for these steps is:

 

3, 1, 4, 2, 5.

 

5, 3, 1, 4, 2.

 

2, 4, 5, 1, 3.

 

4, 5, 2, 3, 1.

 

19  of 35

On a production cost report, which of the following cost(s) appear?

 

A. Beginning work in process

 

B. Costs added during the period

 

C. Total operating costs during the period

 

D. Both A and B are included on a production cost report.

 

22  of 35

When calculating the total amount of manufacturing overhead to allocate to a particular job, the company would multiply each departmental overhead rate by ________ and then ________ together the allocated amounts from each department.

 

the actual amount of the departmental allocation based used by the job; multiply

 

the actual amount of the plantwide allocation based used by the job; add

 

the actual amount of the departmental allocation based used by the job; add

 

the actual amount of the plantwide allocation based used by the job; multiply

 

23  of 35

In using an ABC system, all of the following steps are performed before the company's year begins except:

 

identify the primary activities and estimate a total cost pool for each.

 

select an allocation base for each activity.

 

allocate the costs to the cost object using the activity cost allocation rates.

 

calculate an activity cost allocation rate for each activity.

 

24  of 35

Four basic steps are used in an ABC system. Select the correct order of these steps below:

a.       Identify the primary activities and estimate a total cost pool for each.

b.    Allocate the costs to the cost object using the activity cost allocation rates.

c.     Select an allocation base for each activity.

d.    Calculate an activity cost allocation rate for each activity.

 

c, a, b, d

 

a, c, d, b

 

b, a, c, d

 

a, d, c, b

 

25  of 35

The use of which of the following costing systems is most likely to reduce cost distortion to a minimum?

 

Plantwide overhead rate

 

Departmental overhead allocation rates

 

Traditional costing system

 

Activity-based costing

 

27  of 35

Which of the following is a fixed cost?

 

Direct materials cost

 

Direct labor cost

 

Straight-line depreciation expense

 

Sales commissions expense

 

28  of 35

Renting a scooter and paying $30 per day plus $.20 per mile driven is an example of what type of cost?

 

Mixed cost

 

Fixed cost

 

Conversion cost

 

Variable cost

 

29  of 35

Total fixed costs for Diamond Enterprises are $800,000. Total costs, including both fixed and variable, are $890,000 if 120,000 units are produced. The fixed cost per unit at 200,000 units would be

 

$4.00/unit.

 

$7.42/unit.

 

$4.45/unit.

 

$0.45/unit.

 

30  of 35

Total fixed costs for Toys and Trinkets Incorporated are $88,000. Total costs, including both fixed and variable, are $155,000 if 268,000 units are produced. The total variable costs at a level of 275,000 units would be

 

$68,750.

 

$159,049.

 

$90,299.

 

$151,055.

 

32  of 35

CVP analysis assumes all of the following except

 

the mix of products will not change.

 

revenues are linear throughout the relevant range.

 

inventory levels will increase.

 

a change in volume is the only factor that affects costs.

 

33  of 35

Contribution margin ratio is computed by

 

dividing contribution margin by operating income.

 

dividing contribution margin by sales revenue.

 

dividing sales revenue by contribution margin.

 

dividing operating income by contribution margin.

 

35  of 35

Electric Jet Skis operates a jet ski rental business. Assume the jet skis rent for $55 per 6 hours. The variable costs are $33 per six-hour rental, and its fixed costs are $80,000 each month. What is the contribution margin ratio?

 

40%

 

60%

 

250%

 

22%

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