Question 1

Which of the following would be classified as a prime cost?

Accepted Answer

A)  cost of direct materials used
B)  depreciation on factory equipment
C)  salary of sales personnel
D)  depreciation on office furnitureE) A) and C)
F) C) and D)

Question 2

The three categories of period costs are direct materials,direct labor,and manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 3

In a manufacturing company,accounting,legal,and administrative costs are typical examples of product costs.

Accepted Answer

A) True 
 B)False

Question 4

Period costs are the ________.

Accepted Answer

A)  product costs that must be paid in the accounting period in which they are incurred
B)  costs that are incurred and expensed during the same accounting period
C)  costs related to production of products the company purchases and sells
D)  same as manufacturing overhead costsE) B) and C)
F) C) and D)

Question 5

Houston Corporation reports the following cost information for March:

What is the amount of direct materials used by the company in March?

Accepted Answer

A)  $7,100
B)  $8,400
C)  $17,500
D)  $15,500E) A) and B)
F) A) and C)

Question 6

Best,Inc. ,a merchandiser,sells office supplies.The following information summarizes Best's operating activities during the year:
  
Required: Prepare an income statement for Best,Inc.for the year ended December 31,using the format below.

Accepted Answer

The answer of Best,Inc. ,a merchandiser,sells office supplies.The following information...

Question 7

Simons,Inc.sells plasticware.The following information summarizes Simons' operating activities for the year:
  
Prepare an income statement for Simons,Inc. ,a merchandiser,for the year ended December 31 using the format below:

Accepted Answer

The answer of Simons,Inc.sells plasticware.The following information summarizes Simons' operating...

Question 8

A merchandiser does not need to calculate cost per unit because it resells goods that are already manufactured.

Accepted Answer

A) True 
 B)False

Question 9

The IMA Standards of Ethical Practice include confidentiality,competence,credibility,and integrity.

Accepted Answer

A) True 
 B)False

Question 10

If a merchandising company determines that the unit cost to purchase a product is less than the unit cost to manufacture the product,the company should make a decision to begin manufacturing the product

Accepted Answer

A) True 
 B)False

Question 11

Direct materials and direct labor are prime costs.

Accepted Answer

A) True 
 B)False

Question 12

Planet Manufacturing provided the following information for the month ended March 31:
  
Prepare the income statement.

Accepted Answer

The answer of Planet Manufacturing provided the following information for...

Question 13

A company that uses labor,equipment,supplies,and facilities to convert raw materials into finished products is a ________.

Accepted Answer

A)  merchandising company
B)  manufacturing company
C)  service company
D)  trading companyE) A) and D)
F) C) and D)

Question 14

In a manufacturing company,wages and benefits of assembly line workers are included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 15

Financial statements prepared for investors and creditors often include forward-looking information because they make decisions based on a company's future prospects.

Accepted Answer

A) True 
 B)False

Question 16

Anything for which managers want a separate measurement of cost is called a ________.

Accepted Answer

A)  responsibility center
B)  cost object
C)  profit object
D)  conversion costE) All of the above
F) A) and D)

Question 17

Which of the following correctly describes the accounting for factory depreciation?

Accepted Answer

A)  Factory depreciation is a product cost and is expensed as incurred.
B)  Factory depreciation is a period cost and is expensed as incurred.
C)  Factory depreciation is a product cost and is expensed when the manufactured product is sold.
D)  Factory depreciation is a period cost and is expensed when the manufactured product is sold.E) A) and C)
F) A) and B)

Question 18

Goods that are produced by a manufacturing company and are ready to sell are recorded in the _______ account.

Accepted Answer

A)  Raw Materials Inventory
B)  Work-in-Process Inventory
C)  Manufacturing Overhead
D)  Finished Goods InventoryE) A) and B)
F) A) and C)

Question 19

Which of the following statements is true of financial accounting?

Accepted Answer

A)  It provides information to investors needed for their investment decisions.
B)  It provides forward-looking information needed for managing and delegating operations.
C)  It focuses on detailed reports for parts of the company rather than the whole company.
D)  It focuses on planning and controlling day-to-day operations.E) None of the above
F) A) and D)

Question 20

Which of the following would appear as a line item on the income statements of both a merchandiser and a manufacturer?

Accepted Answer

A)  Direct Labor
B)  Cost of Goods Manufactured
C)  Direct Materials
D)  Cost of Goods SoldE) None of the above
F) B) and C)

Exam 18: Introduction to Managerial Accounting

Which of the following would appear as a line item on the income statements of both a merchandiser and a manufacturer?

Correct AnswerverifiedShow Answer

Anything for which managers want a separate measurement of cost is called a ________.

Correct AnswerverifiedShow Answer

Goods that are produced by a manufacturing company and are ready to sell are recorded in the _______ account.

Correct AnswerverifiedShow Answer

Which of the following would be classified as a prime cost?

Correct AnswerverifiedShow Answer

Simons,Inc.sells plasticware.The following information summarizes Simons' operating activities for the year: Prepare an income statement for Simons,Inc. ,a merchandiser,for the year ended December 31 using the format below:

Correct AnswerverifiedShow Answer

If a merchandising company determines that the unit cost to purchase a product is less than the unit cost to manufacture the product,the company should make a decision to begin manufacturing the product

Correct AnswerverifiedShow Answer

The three categories of period costs are direct materials,direct labor,and manufacturing overhead.

Correct AnswerverifiedShow Answer

Best,Inc. ,a merchandiser,sells office supplies.The following information summarizes Best's operating activities during the year: Required: Prepare an income statement for Best,Inc.for the year ended December 31,using the format below.

Correct AnswerverifiedShow Answer

Direct materials and direct labor are prime costs.

Correct AnswerverifiedShow Answer

Financial statements prepared for investors and creditors often include forward-looking information because they make decisions based on a company's future prospects.

Correct AnswerverifiedShow Answer

In a manufacturing company,accounting,legal,and administrative costs are typical examples of product costs.

Correct AnswerverifiedShow Answer

The IMA Standards of Ethical Practice include confidentiality,competence,credibility,and integrity.

Correct AnswerverifiedShow Answer

Period costs are the ________.

Correct AnswerverifiedShow Answer

Which of the following statements is true of financial accounting?

Correct AnswerverifiedShow Answer

In a manufacturing company,wages and benefits of assembly line workers are included in manufacturing overhead.

Correct AnswerverifiedShow Answer

A merchandiser does not need to calculate cost per unit because it resells goods that are already manufactured.

Correct AnswerverifiedShow Answer

Which of the following correctly describes the accounting for factory depreciation?

Correct AnswerverifiedShow Answer

Planet Manufacturing provided the following information for the month ended March 31: Prepare the income statement.

Correct AnswerverifiedShow Answer

A company that uses labor,equipment,supplies,and facilities to convert raw materials into finished products is a ________.

Correct AnswerverifiedShow Answer

Houston Corporation reports the following cost information for March: What is the amount of direct materials used by the company in March?

Correct AnswerverifiedShow Answer

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