(Test Bank) Fundamental Managerial Accounting Concepts

Edmonds, 10

Business

Test Bank

10th Edition

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Test Bank for Fundamental Managerial Accounting Concepts, The downloadable file consists of 866 pages, and the total size of the file is 4.63 MB. Purchase now only for highly discounted price.

Author(s): Edmonds

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Study Note Preview

Version 1 1 CHAPTER 1 1) Which of the following items are representative of managerial accounting? Note: Check all that apply. A) Financial statement in accordance with GAAP B) Monthly sales reports used internally to allocate funds to divisions C) Quarterly financial information sent to investors D) Audited financial statements submitted to bankers with credit application E) Budget projections used to make logistic decisions 2) Which of the following costs are not included in the cost of manufacturing a product? Note: Check all that apply. A) Marketing B) Production workers' wages C) Factory janitor's wages D) CEO salary E) Depreciation on manufacturing equipment 3) Which of the following is considered a downstream cost? Note: Check all that apply. A) Research and development B) Production wages C) Advertising cost D) Warranty cost E) Cost of internet in manufacturing plant 4) Which of the following are examples of inventory holding costs? Note: Check all that apply. Version 1 2 A) Cost of warehouse space B) Cost of shipping inventory to customers C) Research and development cost D) Cost of supervising inventory E) Inventory spoilage cost 5) Ashley Bradshaw is the manager of one department in a large store. In this capacity, which of the following kinds of information would she be interested in? A) Economic data B) Financial data C) Nonfinancial data D) Financial, economic, and nonfinancial data 6) All of the following are features of managerial accountingexcept: A) information is provided primarily to insiders such as managers. B) information includes economic and non-financial data as well as financial data. C) information is characterized by objectivity, reliability, consistency, and accuracy. D) information is reported continuously with a present or future orientation. 7) Choose the answer that isnot a distinguishing characteristic of financial accounting information. A) It is global information that reflects the performance of the whole company. B) It is focused primarily on the future. C) It is more concerned with financial data than physical or economic data. D) It is more highly regulated than managerial accounting information. Version 1 3 8) Managerial accounting information is limited or restricted by which of the following authorities or principles? A) Securities and Exchange Commission B) Generally Accepted Accounting Principles C) Managerial Accounting Standards Board D) Value-Added Principle 9) Select theincorrect statement regarding the relationship between type of user and type of information. A) Middle managers need more nonfinancial, or operational data than do senior executives. B) Assembly line supervisors need more immediate feedback on performance than do senior executives. C) Senior executives need less aggregated information than do lower-level managers. D) Senior executives use general economic information as well as financial information. 10) Which group would use managerial accounting data of XY Company? A) Stockholders B) Managers C) Executives D) Both managers and executives E) All of the groups would use managerial accounting data 11) Which of the following is a feature of managerial accounting information? Version 1 4 A) Information is not distributed to the public B) Information reports on the company as a whole C) Information is focused on the past D) Information is reported annually 12) Select thecorrect statement regarding managerial and financial accounting. A) Users of managerial accounting information desire greater aggregation than do users of financial accounting information. B) Both managerial and financial accounting use economic and physical data in addition to financial data. C) Financial accounting is more highly regulated than managerial accounting. D) Timeliness is more important in financial accounting than in managerial accounting. 13) Which of the following most exemplifies the value-added principle? A) An ongoing process where continuous improvement is the goal. B) A competitive management program that emphasizes quality. C) Information gathering and reporting activities should be restricted to those activities that add value in excess of their cost. D) Managerial accounting information is measured in economic, physical, and financial terms. 14) Which of the following costs would be classified as a direct cost for a company that produces motorcycles?Version 1 5 A) Rent of manufacturing facility that produces motorcycles. B) Seats used in the motorcycles. C) Wages of motorcycle assembly workers. D) Both seats used in the motorcycles and wages of motorcycle assembly workers are correct. 15) Which of the following is a product cost for a construction company? A) Cost of transporting raw materials to the job site B) Wages paid to the company's payroll clerk C) Rent of the company's main office D) All of these. 16) For a manufacturing company, product costs include all of the followingexcept: A) indirect material costs. B) warehousing costs of finished goods. C) direct labor costs. D) All of these are product costs. 17) During its first year of operations, Connor Company paid $51,640 for direct materials and $19,800 in wages for production workers. Lease payments and utilities on the production facilities amounted to $8,800. General, selling, and administrative expenses were $9,800. The company produced 6,800 units and sold 5,800 units for $16.80 a unit. The average cost to produce one unit is which of the following amounts? Version 1 6 A) $13.24 B) $11.80 C) $10.42 D) $13.83 18) During its first year of operations, Connor Company paid $50,000 for direct materials and $36,000 in wages for production workers. Lease payments and utilities on the production facilities amounted to $14,000. General, selling, and administrative expenses were $16,000. The company produced 5,000 units and sold 4,000 units for $30.00 a unit. The average cost to produce one unit is which of the following amounts? A) $20.00 B) $16.00 C) $18.40 D) $25.00 19) Green company incurred $58,500 in total manufacturing costs to produce 3,900 tea kettles. The company plans to sell the tea kettles for $52 per unit. Given this information, what is the average cost per unit? A) $37 B) $15 C) $67 D) $52 20) Green company incurred $20,000 in total manufacturing costs to produce 2,000 tea kettles. The company plans to sell the tea kettles for $40 per unit. Given this information, what is the average cost per unit? Version 1 7 A) $30 B) $40 C) $50 D) $10 21) During Year 2, Skip Company paid $24,900 for direct materials and $10,900 for production workers' wages. Lease payments and utilities on the production facilities amounted to $15,900 while general, selling, and administrative expenses totaled $5,900. Based on this information, what is the total manufacturing cost? A) $51,700 B) $26,800 C) $35,800 D) $57,600 22) During Year 2, Skip Company paid $24,000 for direct materials and $10,000 for production workers' wages. Lease payments and utilities on the production facilities amounted to $15,000 while general, selling, and administrative expenses totaled $5,000. Based on this information, what is the total manufacturing cost? A) $49,000 B) $54,000 C) $34,000 D) $25,000 23) During its first year of operations, Forrest Company paid $30,000 for direct materials and $50,000 in wages for production workers. Lease payments, utility costs, and depreciation on factory equipment totaled $15,000. General, selling, and administrative expenses were $20,000. The average cost to produce one unit was $2.50. How many units were produced during the period?Version 1 8 A) 40,000 B) 46,000 C) 38,000 D) None of these. 24) During its first year of operations, Forrest Company paid $14,040 for direct materials and $49,200 in wages for production workers. Lease payments, utility costs, and depreciation on factory equipment totaled $13,200. General, selling, and administrative expenses were $19,200. The average cost to produce one unit was $4.20. How many units were produced during the period? A) 19,629 B) 18,200 C) 22,771 D) None of these. 25) Why do accountants normally calculate cost per unit as an average? A) Determining the exact cost of a product is virtually impossible. B) Some manufacturing-related costs cannot be accurately traced to specific units of product. C) Even when producing multiple units of the same product, normal variations occur in the amount of materials and labor used. D) All of these are justifications for computing average unit costs. 26) Which of the following costs isnot considered a period cost?Version 1 9 A) Warehousing costs of raw materials B) Depreciation of delivery vehicles C) Salaries paid to company executives D) Freight paid on a purchase of raw materials 27) Select theincorrect statement regarding costs and expenses. A) Some costs are initially recorded as expenses while others are initially recorded as assets. B) Expenses are incurred when assets are used to generate revenue. C) Manufacturing-related costs are initially recorded as expenses. D) Non-manufacturing costs should be expensed in the period in which they are incurred. 28) Which of the following costs should be recorded as an expense? A) Salary of administrative employee B) Depreciation of manufacturing equipment C) Insurance for the factory building D) All of these are expenses. 29) Which of the following costs shouldnot be recorded as an expense? A) Insurance on factory building B) Sales commissions C) Product shipping costs D) Product advertising Version 1 10 30) Which of the following transactions would cause net income for the period to decrease? A) Paid $2,500 cash for raw material cost B) Purchased $8,000 of merchandise inventory C) Recorded $5,000 of depreciation on production equipment D) Used $2,000 of office supplies 31) Which of the following statements is true with regard to product costs versus general, selling, and administrative costs? A) Product costs associated with unsold units appear on the income statement as general expenses. B) General, selling, and administrative costs appear on the balance sheet. C) Product costs associated with units sold appear on the income statement as cost of goods sold. D) None of these are true. 32) Which of the following statements concerning product costs versus general, selling, and administrative costs isfalse? A) Product costs incurred during the period will initially appear as inventory on the balance sheet. B) General, selling, and administrative costs are always expensed when paid. C) Product costs may be divided between the balance sheet and income statement. D) General, selling, and administrative costs never appear as inventory on the balance sheet. 33) Buckhorn Company’s accounting records noted the following amounts for depreciation. What amount of depreciation would be categorized as a product cost? Depreciation on: Version 1 11 Factory building $65,500 Elevators in administrative building $10,500 Furniture in CEO’s office $5,500 Forklifts in factory $21,500 Trucks to deliver product to customers $9,500 A) $112,500 B) $96,500 C) $87,000 D) $65,500 34) Buckhorn Company’s accounting records noted the following amounts for depreciation. What amount of depreciation would be categorized as a product cost? Depreciation on: Factory building $65,000 Elevators in administrative building $10,000 Furniture in CEO’s office $5,000 Forklifts in factory $21,000 Trucks to deliver product to customers $9,000 A) $65,000 B) $86,000 C) $95,000 D) $110,000 35) Buckhorn Company’s accounting records noted the following amounts for company payroll costs. What amount of payroll would be categorized as a period cost? Payroll Costs: Marketing director salary $151,000 Factory manager salary $86,000 Commissions paid to sales staff $61,000 Administrative personnel wages $51,000 Wages of production workers $201,000 Version 1 12 A) $263,000 B) $288,000 C) $324,000 D) $550,000 36) Buckhorn Company’s accounting records noted the following amounts for company payroll costs. What amount of payroll would be categorized as a period cost? Payroll Costs: Marketing director salary $150,000 Factory manager salary $85,000 Commissions paid to sales staff $60,000 Administrative personnel wages $50,000 Wages of production workers $200,000 A) $320,000 B) $285,000 C) $260,000 D) $545,000 37) During Year 2, Skyland Company had sales of $4,280,000 and total product cost of $1,480,000. Assuming the company manufactured 740,000 units and sold 400,000 units, what is cost of goods sold for Year 2? A) $740,000 B) $1,480,000 C) $1,540,000 D) $800,000 38) During Year 2, Skyland Company had sales of $4,000,000 and total product cost of $1,500,000. Assuming the company manufactured 500,000 units and sold 200,000 units, what is cost of goods sold for Year 2? Version 1 13 A) $500,000 B) $600,000 C) $1,500,000 D) $1,600,000 39) During Year 2, Amos Company had sales of $996,000 and total product cost of $836,000. Assuming the company manufactured 209,000 units and sold 139,000 units, what is the total cost of the ending inventory? A) $249,000 B) $857,000 C) $139,000 D) $280,000 40) During Year 2, Amos Company had sales of $600,000 and total product cost of $400,000. Assuming the company manufactured 200,000 units and sold 150,000 units, what is the total cost of the ending inventory? A) $100,000 B) $300,000 C) $150,000 D) $450,000 41) Given the selected financial information for Storm Company, what is gross margin? Sales $1,300,000 Net income $215,000 Ending inventory $315,000 Cost of goods sold $750,000 Version 1 14 A) $985,000 B) $770,000 C) $1,085,000 D) $550,000 42) Given the selected financial information for Storm Company, what is gross margin? Sales $1,000,000 Net income $200,000 Ending inventory $300,000 Cost of goods sold $600,000 A) $800,000 B) $400,000 C) $700,000 D) $500,000 43) During its first year of operations, Silverman Company paid $8,065 for direct materials and $9,600 for production workers' wages. Lease payments and utilities on the production facilities amounted to $8,600 while general, selling, and administrative expenses totaled $4,100. The company produced 5,150 units and sold 3,100 units at a price of $7.60 a unit. What is Silverman's cost of goods sold for the year? A) $26,265 B) $13,101 C) $15,810 D) $21,765 44) During its first year of operations, Silverman Company paid $14,000 for direct materials and $19,000 for production workers' wages. Lease payments and utilities on the production facilities amounted to $17,000 while general, selling, and administrative expenses totaled $8,000. The company produced 5,000 units and sold 3,000 units at a price of $15.00 a unit. What is Silverman's cost of goods sold for the year? Version 1 15 A) $50,000 B) $24,600 C) $30,000 D) $41,000 45) During its first year of operations, Silverman Company paid $11,625 for direct materials and $11,000 for production workers' wages. Lease payments and utilities on the production facilities amounted to $10,000 while general, selling, and administrative expenses totaled $3,500. The company produced 7,250 units and sold 4,500 units at a price of $7.00 a unit. What is the amount of gross margin for the first year? A) $12,375 B) $ 11,250 C) $8,875 D) $31,500 46) During its first year of operations, Silverman Company paid $14,000 for direct materials and $19,000 for production workers' wages. Lease payments and utilities on the production facilities amounted to $17,000 while general, selling, and administrative expenses totaled $8,000. The company produced 5,000 units and sold 3,000 units at a price of $15.00 a unit. What is the amount of gross margin for the first year? A) $15,000 B) $24,000 C) $20,000 D) $45,000 47) During its first year of operations, Silverman Company paid $11,860 for direct materials and $10,900 for production workers' wages. Lease payments and utilities on the production facilities amounted to $9,900 while general, selling, and administrative expenses totaled $3,600. The company produced 7,100 units and sold 4,400 units at a price of $7.10 a unit. What is the amount of finished goods inventory on the balance sheet at year-end?