Question 1

The following are some of the costs incurred by Cupcake Company. Identify them as either:
-Sprinkles for decoration  (indirect material)

Accepted Answer

A)  Prime costs
B)  Conversion costs
C)  Both prime and conversion costs
D)  Neither prime nor conversion costsE) None of the above
F) A) and C)

Question 2

The plant manager's salary in a manufacturing business would be considered an indirect cost.

Accepted Answer

A) True 
 B)False

Question 3

Prime costs consist of factory overhead and direct labor.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following costs are conversion costs?

Accepted Answer

A)   direct labor cost and factory overhead cost
B)   direct materials cost and direct labor cost
C)   factory overhead cost
D)   direct materials cost and factory overhead costE) A) and D)
F) B) and D)

Question 5

All of the following are examples of indirect labor except

Accepted Answer

A)   maintenance personnel
B)   janitorial personnel
C)   machine operators
D)   plant managersE) All of the above
F) A) and B)

Question 6

The cost of materials entering directly into the manufacturing process is classified as factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 7

For each of the following costs, classify them as either:
-Factory equipment depreciation

Accepted Answer

A)  Direct costs
B)  Indirect costs
C)  Neither direct nor indirect costsD) None of the above
E) B) and C)

Question 8

For each of the following, indicate whether the cost would typically be considered a product or period cost for the cost object given.
-Selling costs for the period

Accepted Answer

A)  Product
B)  PeriodC) A) and B)
D) undefined

Question 9

The following are some of the costs incurred by Cupcake Company. Identify them as either:
-Depreciation expense-factory

Accepted Answer

A)  Prime costs
B)  Conversion costs
C)  Both prime and conversion costs
D)  Neither prime nor conversion costsE) A) and B)
F) A) and C)

Question 10

The cost of goods sold for Michaels Manufacturing in the current year was $233,000. The January 1 finished goods inventory balance was $31,600, and the December 31 finished goods inventory balance was $24,200. Cost of goods manufactured during the period was

Accepted Answer

A)   $233,000
B)   $225,600
C)   $288,800
D)   $240,400E) None of the above
F) All of the above

Question 11

Work in process inventory on December 31 is $42,000. Work in process inventory decreased by 40% during the year. Total manufacturing costs incurred amount to $260,000. What is the cost of goods manufactured?

Accepted Answer

A)   $232,000
B)   $302,000
C)   $288,000
D)   $190,000E) A) and B)
F) C) and D)

Question 12

A report analyzing how many products need to be sold to cover operating costs is not typically a managerial accounting report.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following are reported on the income statement as part of cost of goods?

Accepted Answer

A)   administrative expenses
B)   period costs
C)   cost of goods manufactured
D)   operating expensesE) A) and B)
F) C) and D)

Question 14

Indirect costs incurred in a manufacturing environment that cannot be traced directly to a product are treated as

Accepted Answer

A)   period costs and expensed when incurred
B)   product costs and expensed when the goods are sold
C)   product costs and expensed when incurred
D)   period costs and expensed when the goods are soldE) All of the above
F) A) and B)

Question 15

Match the items below for a bakery to the type of cost (a-d) . Answers may be used more than once.
-Cupcake mix

Accepted Answer

A)  Direct materials
B)  Direct labor
C)  Factory overhead
D)  Nonmanufacturing costChallengingE) All of the above
F) B) and D)

Question 16

The following are some of the costs incurred by Cupcake Company. Identify them as either:
-Factory rent

Accepted Answer

A)  Prime costs
B)  Conversion costs
C)  Both prime and conversion costs
D)  Neither prime nor conversion costsE) A) and C)
F) B) and C)

Question 17

Which of the following will not be found on the balance sheet of a manufacturing company?

Accepted Answer

A)   cost of goods sold
B)   materials
C)   work in process
D)   finished goodsE) B) and C)
F) C) and D)

Question 18

Which of the following is most associated with financial accounting?

Accepted Answer

A)   can have both objective and subjective information
B)   can be prepared periodically, or as needed
C)   prepared in accordance with GAAP
D)   can be prepared for the entity or segmentE) B) and D)
F) None of the above

Question 19

Work in process inventory on December 31 of the current year is $44,000. Work in process inventory increased by 60% during the year. Cost of goods manufactured amounts to $275,000. What are the total manufacturing costs incurred in the current year?

Accepted Answer

A)   $291,500
B)   $302,000
C)   $275,750
D)   $233,750E) A) and C)
F) All of the above

Question 20

If the cost of materials is not a significant portion of the total product cost, the materials may be classified as part of factory overhead cost.

Accepted Answer

A) True 
 B)False

Exam 18: Introduction to Managerial Accounting

Which of the following are reported on the income statement as part of cost of goods?

Correct AnswerverifiedShow Answer

The cost of materials entering directly into the manufacturing process is classified as factory overhead cost.

Correct AnswerverifiedShow Answer

Work in process inventory on December 31 is $42,000. Work in process inventory decreased by 40% during the year. Total manufacturing costs incurred amount to $260,000. What is the cost of goods manufactured?

Correct AnswerverifiedShow Answer

All of the following are examples of indirect labor except

Correct AnswerverifiedShow Answer

The following are some of the costs incurred by Cupcake Company. Identify them as either: -Depreciation expense-factory

Correct AnswerverifiedShow Answer

For each of the following costs, classify them as either: -Factory equipment depreciation

Correct AnswerverifiedShow Answer

Indirect costs incurred in a manufacturing environment that cannot be traced directly to a product are treated as

Correct AnswerverifiedShow Answer

If the cost of materials is not a significant portion of the total product cost, the materials may be classified as part of factory overhead cost.

Correct AnswerverifiedShow Answer

Match the items below for a bakery to the type of cost (a-d) . Answers may be used more than once. -Cupcake mix

Correct AnswerverifiedShow Answer

Work in process inventory on December 31 of the current year is $44,000. Work in process inventory increased by 60% during the year. Cost of goods manufactured amounts to $275,000. What are the total manufacturing costs incurred in the current year?

Correct AnswerverifiedShow Answer

A report analyzing how many products need to be sold to cover operating costs is not typically a managerial accounting report.

Correct AnswerverifiedShow Answer

The following are some of the costs incurred by Cupcake Company. Identify them as either: -Factory rent

Correct AnswerverifiedShow Answer

For each of the following, indicate whether the cost would typically be considered a product or period cost for the cost object given. -Selling costs for the period

Correct AnswerverifiedShow Answer

Which of the following costs are conversion costs?

Correct AnswerverifiedShow Answer

The following are some of the costs incurred by Cupcake Company. Identify them as either: -Sprinkles for decoration (indirect material)

Correct AnswerverifiedShow Answer

Prime costs consist of factory overhead and direct labor.

Correct AnswerverifiedShow Answer

The plant manager's salary in a manufacturing business would be considered an indirect cost.

Correct AnswerverifiedShow Answer

Which of the following is most associated with financial accounting?

Correct AnswerverifiedShow Answer

The cost of goods sold for Michaels Manufacturing in the current year was $233,000. The January 1 finished goods inventory balance was $31,600, and the December 31 finished goods inventory balance was $24,200. Cost of goods manufactured during the period was

Correct AnswerverifiedShow Answer

Which of the following will not be found on the balance sheet of a manufacturing company?

Correct AnswerverifiedShow Answer

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