(Test Bank) Managerial Accounting

Garrison, 17

Business

Test Bank

17th Edition

• $10.00 $35.00

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Description

Test Bank for Managerial Accounting, The downloadable file consists of 153 pages, and the total size of the file is 0.67 MB. Purchase now only for highly discounted price.

Author(s): Garrison

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Study Note Preview

Version 1 1 Student name:__________ TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) A factory supervisor's salary would be classified as an indirect cost with respect to a unit of product. ⊚ true ⊚ false 2) A direct cost is a cost that can be easily traced to the particular cost object under consideration. ⊚ true ⊚ false 3) A cost can be direct or indirect. The classification can change if the cost object changes. ⊚ true ⊚ false 4) Wages paid to production supervisors would be classified as manufacturing overhead. ⊚ true ⊚ false 5) Selling costs are indirect costs. ⊚ true ⊚ false 6) The sum of all manufacturing costs except for direct materials and direct labor is called manufacturing overhead. ⊚ true ⊚ false Version 1 2 Thank you for your order, Copy the link below in your internet browser to download your order file complete. https://mega.nz/file/J5sjgQ4C#ZtITr11uu7Cs6evTBhF0daF4-J4R_bXsv6WINuUA_9M I would really appreciate it if you can leave a positive feedback. That would be really helpful for my store, and I will surely leave a positive feedback as well!! Thank you and have a wonderful day :)) Note: If there is any problem in the download link, like decryption key error, try download the file in a different browser, if you still have any problem, just send us email at getsmtb@msn.com Or you can also send us message on the customer message box in the website. Version 1 3 Thank you for your order, Copy the link below in your internet browser to download your order file complete. https://mega.nz/file/J5sjgQ4C#ZtITr11uu7Cs6evTBhF0daF4-J4R_bXsv6WINuUA_9M I would really appreciate it if you can leave a positive feedback. That would be really helpful for my store, and I will surely leave a positive feedback as well!! Thank you and have a wonderful day :)) Note: If there is any problem in the download link, like decryption key error, try download the file in a different browser, if you still have any problem, just send us email at getsmtb@msn.com Or you can also send us message on the customer message box in the website. Version 1 4 7) The three cost elements ordinarily included in product costs are direct materials, direct labor, and manufacturing overhead. ⊚ true ⊚ false 8) Administrative costs are indirect costs. ⊚ true ⊚ false 9) Depreciation is always considered a period cost for external financial reporting purposes in a manufacturing company. ⊚ true ⊚ false 10) Opportunity costs at a manufacturing company are not part of manufacturing overhead. ⊚ true ⊚ false 11) Conversion cost is the sum of direct labor cost and manufacturing overhead cost. ⊚ true ⊚ false 12) In a manufacturing company, all costs are period costs. ⊚ true ⊚ false 13) Advertising is not considered as a product cost even if it promotes a specific product.Version 1 5 ⊚ true ⊚ false 14) Selling and administrative expenses are period costs under generally accepted accounting principles. ⊚ true ⊚ false 15) Conversion cost equals product cost less direct materials cost. ⊚ true ⊚ false 16) Prime cost is the sum of direct materials cost and direct labor cost. ⊚ true ⊚ false 17) Product costs are also known as inventoriable costs. ⊚ true ⊚ false 18) Prime cost equals manufacturing overhead cost. ⊚ true ⊚ false 19) Conversion cost is the same thing as manufacturing overhead. ⊚ true ⊚ false 20) The cost of shipping parts from a supplier is considered a period cost.Version 1 6 ⊚ true ⊚ false 21) Depreciation on equipment a company uses in its selling and administrative activities would be classified as a period cost. ⊚ true ⊚ false 22) Indirect costs, such as manufacturing overhead, are variable costs. ⊚ true ⊚ false 23) If the activity level increases, then one would expect the fixed cost per unit to increase as well. ⊚ true ⊚ false 24) A fixed cost is a cost whose cost per unit varies as the activity level rises and falls. ⊚ true ⊚ false 25) Cost behavior is considered curvilinear whenever a straight line is a reasonable approximation for the relation between cost and activity. ⊚ true ⊚ false 26) A decrease in production will ordinarily result in a decrease in fixed production costs per unit. ⊚ true ⊚ false Version 1 7 Thank you for your order, Copy the link below in your internet browser to download your order file complete. https://mega.nz/file/J5sjgQ4C#ZtITr11uu7Cs6evTBhF0daF4-J4R_bXsv6WINuUA_9M I would really appreciate it if you can leave a positive feedback. That would be really helpful for my store, and I will surely leave a positive feedback as well!! Thank you and have a wonderful day :)) Note: If there is any problem in the download link, like decryption key error, try download the file in a different browser, if you still have any problem, just send us email at getsmtb@msn.com Version 1 8 Or you can also send us message on the customer message box in the website. 27) As activity decreases within the relevant range, fixed costs remain constant on a per unit basis. ⊚ true ⊚ false 28) The variable cost per unit depends on how many units are produced. ⊚ true ⊚ false 29) In account analysis, an account is classified as either variable or fixed based on an analyst’s prior knowledge of how the cost in the account behaves. ⊚ true ⊚ false 30) A step-variable cost is a cost that is obtained in large chunks and that increases or decreases only in response to fairly wide changes in activity. ⊚ true ⊚ false 31) Committed fixed costs remain largely unchanged in the short run. ⊚ true ⊚ false 32) Fixed costs expressed on a per unit basis do not change with changes in activity. ⊚ true ⊚ false Version 1 9 33) A fixed cost is constant if expressed on a per unit basis but the total dollar amount changes as the number of units increases or decreases. ⊚ true ⊚ false 34) If managers are reluctant to lay off direct labor employees when activity declines leads to a decrease in the ratio of variable to fixed costs. ⊚ true ⊚ false 35) Within the relevant range, a change in activity results in a change in variable cost per unit and total fixed cost. ⊚ true ⊚ false 36) When operations are interrupted or cut back, committed fixed costs are cut in the short term because the costs of restoring them later are likely to be far less than the short-run savings that are realized. ⊚ true ⊚ false 37) The concept of the relevant range does not apply to variable costs. ⊚ true ⊚ false 38) The cost of napkins put on each person's tray at a fast food restaurant is a variable cost with respect to how many persons are served. ⊚ true ⊚ false Version 1 10 39) A fixed cost fluctuates in total as activity changes but remains constant on a per unit basis over the relevant range. ⊚ true ⊚ false 40) The relevant range is the range of activity within which the assumption that cost behavior is strictly linear is reasonably valid. ⊚ true ⊚ false 41) Variable costs per unit are not affected by changes in activity. ⊚ true ⊚ false 42) The relevant range concept is applicable to mixed costs. ⊚ true ⊚ false 43) A variable cost remains constant if expressed on a unit basis. ⊚ true ⊚ false 44) Committed fixed costs represent organizational investments with a one-year planning horizon. ⊚ true ⊚ false Version 1 11 45) The following costs are all examples of committed fixed costs: depreciation on buildings, salaries of highly trained engineers, real estate taxes, and insurance expenses. ⊚ true ⊚ false 46) A fixed cost is not constant per unit of product. ⊚ true ⊚ false 47) Differential costs can only be variable. ⊚ true ⊚ false 48) The potential benefit that is given up when one alternative is selected over another is called a sunk cost. ⊚ true ⊚ false 49) The amount that a manufacturing company could earn by renting unused portions of its warehouse is an example of an opportunity cost. ⊚ true ⊚ false 50) A cost that differs from one month to another is known as a sunk cost. ⊚ true ⊚ false 51) In a traditional format income statement, the gross margin is sales minus cost of goods sold.Version 1 12 ⊚ true ⊚ false 52) In a traditional format income statement for a merchandising company, cost of goods sold is a variable cost that is included in the "Variable expenses" portion of the income statement. ⊚ true ⊚ false 53) In a contribution format income statement for a merchandising company, the cost of goods sold reports the product costs attached to the merchandise sold during the period. ⊚ true ⊚ false 54) Contribution format income statements are prepared primarily for external reporting purposes. ⊚ true ⊚ false 55) Contribution margin and gross margin mean the same thing. ⊚ true ⊚ false 56) In a traditional format income statement, the gross margin minus selling and administrative expenses equals net operating income. ⊚ true ⊚ false 57) Most companies use the contribution approach in preparing financial statements for external reporting purposes.Version 1 13 ⊚ true ⊚ false 58) Although the traditional format income statement is useful for external reporting purposes, it has serious limitations when used for internal purposes because it does not distinguish between fixed and variable costs. ⊚ true ⊚ false 59) The contribution format income statement is used as an internal planning and decision-making tool. Its emphasis on cost behavior aids cost-volume-profit analysis, management performance appraisals, and budgeting. ⊚ true ⊚ false 60) A contribution format income statement separates costs into fixed and variable categories, first deducting variable expenses from sales to obtain the contribution margin. ⊚ true ⊚ false 61) Traditional format income statements are widely used for preparing external financial statements. ⊚ true ⊚ false MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 62) Which of the following statements concerning direct and indirect costs is NOT true?Version 1 14 A) Whether a particular cost is classified as direct or indirect does not depend on the cost object. B) A direct cost is one that can be easily traced to the particular cost object. C) The factory manager’s salary would be classified as an indirect cost of producing one unit of product. D) A particular cost may be direct or indirect, depending on the cost object. 63) Direct costs: A) are incurred to benefit a particular accounting period. B) are incurred due to a specific decision. C) can be easily traced to a particular cost object. D) are the variable costs of producing a product. 64) Which of the following would most likely NOT be included as manufacturing overhead in a furniture factory? A) The cost of the glue in a chair. B) The amount paid to the individual who stains a chair. C) The workman’s compensation insurance of the supervisor who oversees production. D) The factory utilities of the department in which production takes place. 65) Rotonga Manufacturing Company leases a vehicle to deliver its finished products to customers. Which of the following terms correctly describes the monthly lease payments made on the delivery vehicle? Direct Cost Fixed Cost A) Yes Yes B) Yes No C) No Yes D) No No Version 1 15 A) Choice A B) Choice B C) Choice C D) Choice D Thank you for your order, Copy the link below in your internet browser to download your order file complete. https://mega.nz/file/J5sjgQ4C#ZtITr11uu7Cs6evTBhF0daF4-J4R_bXsv6WINuUA_9M I would really appreciate it if you can leave a positive feedback. That would be really helpful for my store, and I will surely leave a positive feedback as well!! Thank you and have a wonderful day :)) Version 1 16 Note: If there is any problem in the download link, like decryption key error, try download the file in a different browser, if you still have any problem, just send us email at getsmtb@msn.com Or you can also send us message on the customer message box in the website. 66) The costs of direct materials are classified as: Conversion cost Manufacturing cost Prime cost A) Yes Yes Yes B) No No No C) Yes Yes No D) No Yes Yes A) Choice A B) Choice B C) Choice C D) Choice D 67) Manufacturing overhead includes: A) all direct material, direct labor and administrative costs. B) all manufacturing costs except direct labor. C) all manufacturing costs except direct labor and direct materials. D) all selling and administrative costs. Version 1 17 68) Materials used in a factory that are not an integral part of the final product, such as cleaning supplies, should be classified as: A) direct materials. B) a period cost. C) administrative expense. D) manufacturing overhead. 69) The salary paid to the president of a company would be classified on the income statement as a(n): A) administrative expense. B) direct labor cost. C) manufacturing overhead cost. D) selling expense. 70) Which of the following is NOT a period cost? A) Depreciation of factory maintenance equipment. B) Salary of a clerk who handles customer billing. C) Insurance on a company showroom where customers can view new products. D) Cost of a seminar concerning tax law updates that was attended by the company’s controller. 71) The cost of electricity for running production equipment is classified as: Conversion cost Period cost A) Yes No B) Yes Yes C) No Yes D) No No Version 1 18 A) Choice A B) Choice B C) Choice C D) Choice D 72) The cost of lubricants used to grease a production machine in a manufacturing company is an example of a(n): A) period cost. B) direct material cost. C) indirect material cost. D) opportunity cost. 73) Wages paid to the supervisor of the warehouse where raw materials and parts are temporarily stored before being used in production is considered an example of: Direct Labor Period Cost A) Yes Yes B) Yes No C) No Yes D) No No A) Choice A B) Choice B C) Choice C D) Choice D 74) A factory supervisor’s wages are classified as: Indirect labor Fixed manufacturing overhead A) No No B) Yes Yes C) Yes No Version 1 19 D) No Yes A) Choice A B) Choice B C) Choice C D) Choice D 75) Product costs that have become expenses can be found in: A) period costs. B) selling expenses. C) cost of goods sold. D) administrative expenses. 76) The cost of direct materials is classified as a: Conversion cost Prime cost A) No No B) Yes No C) No Yes D) Yes Yes A) Choice A B) Choice B C) Choice C D) Choice D 77) Which of the following costs is classified as both a prime cost and a conversion cost? A) Direct materials. B) Direct labor. C) Variable overhead. D) Fixed overhead. Version 1 20 78) Which of the following is an example of a period cost in a company that makes clothing? A) Fabric used to produce men’s pants. B) Advertising cost for a new line of clothing. C) Factory supervisor’s salary. D) Monthly depreciation on production equipment. 79) All of the following are examples of product costs except: A) depreciation on the company’s retail outlets. B) salary of the plant manager. C) insurance on the factory equipment. D) rental costs of factory equipment. 80) Which of the following statements about product costs is true? A) Product costs are deducted from revenue when the production process is completed. B) Product costs are deducted from revenue as expenditures are made. C) Product costs associated with unsold finished goods and work in process appear on the balance sheet as assets. D) Product costs appear on financial statements only when products are sold. 81) Which of the following statements is correct in describing manufacturing overhead? A) Manufacturing overhead when combined with direct materials cost forms conversion cost. B) Manufacturing overhead consists of all manufacturing cost except for prime cost. C) Manufacturing overhead is a period cost. D) Manufacturing overhead when combined with direct labor cost forms prime cost. Version 1 21 82) Direct labor cost is classified as: Conversion cost Prime Cost A) Yes Yes B) No No C) No Yes D) Yes No A) Choice A B) Choice B C) Choice C D) Choice D 83) The fixed portion of the cost of electricity for a manufacturing facility is classified as a: Period cost Product Cost A) Yes Yes B) No No C) No Yes D) Yes No A) Choice A B) Choice B C) Choice C D) Choice D 84) Prime cost consists of: A) direct labor and manufacturing overhead. B) direct materials and manufacturing overhead. C) direct materials and direct labor. D) direct materials, direct labor and manufacturing overhead. Version 1 22 85) Depreciation on a personal computer used in the marketing department of a manufacturing company would be classified as: A) a product cost that is fixed with respect to the company’s output. B) a period cost that is fixed with respect to the company’s output. C) a product cost that is variable with respect to the company’s output. D) a period cost that is variable with respect to the company’s output. 86) Property taxes on a company’s factory building would be classified as a(n): A) product cost. B) opportunity cost. C) period cost. D) variable cost. 87) Factory overhead is typically a(n): A) mixed cost. B) fixed cost. C) variable cost. D) irrelevant cost. 88) As the level of activity increases, how will a mixed cost in total and per unit behave? In Total Per Unit A) Increase Decrease B) Increase Increase C) Increase No effect D) Decrease Increase E) Decrease No effect Version 1 23 A) Choice A B) Choice B C) Choice C D) Choice D E) Choice E 89) The following data have been collected for four different cost items.Cost Item Cost at 100 units Cost at 140 units W $8,000 $10,560 X $5,000 $ 5,000 Y $6,500 $ 9,100 Z $6,700 $ 8,580 Which of the following classifications of these cost items by cost behavior is correct? Cost W Cost X Cost Y Cost Z A) variable fixed mixed variable B) mixed fixed variable mixed C) variable fixed variable variable D) mixed fixed mixed mixed A) Choice A B) Choice B C) Choice C D) Choice D 90) Within the relevant range, variable costs can be expected to: A) vary in total in direct proportion to changes in the activity level. B) remain constant in total as the activity level changes. C) increase on a per unit basis as the activity level increases. D) increase on a per unit basis as the activity level decreases. Version 1 24 91) The relative proportion of variable, fixed, and mixed costs in a company is known as the company’s: A) contribution margin. B) cost structure. C) product mix. D) relevant range. 92) An example of a committed fixed cost is: A) management training seminars. B) a long-term equipment lease. C) research and development. D) advertising. 93) For the past 8 months, Jinan Corporation has experienced a steady increase in its cost per unit even though total costs have remained stable. This cost per unit increase may be due to _____________ costs if the level of activity at Jinan is _______________. A) fixed, decreasing B) fixed, increasing C) variable, decreasing D) variable, increasing 94) Which of the following statements is true when referring to fixed costs? A) Committed fixed costs arise from the annual decisions by management. B) As volume increases, unit fixed cost and total fixed cost will change. C) Fixed costs increase in total throughout the relevant range. D) Discretionary fixed costs can often be reduced to zero for short periods of time without seriously impairing the long-run goals of the company. Version 1 25 95) Which costs will change with a decrease in activity within the relevant range? A) Total fixed costs and total variable cost. B) Unit fixed costs and total variable cost. C) Unit variable cost and unit fixed cost. D) Unit fixed cost and total fixed cost. 96) Which of the following is correct concerning reactions to INCREASES in activity? Total Variable Cost Variable Cost Per Unit A) Increases Decreases B) Constant Decreases C) Decreases Constant D) Increases Constant Garrison 17e Rechecks 2020-09-09 A) Choice A B) Choice B C) Choice C D) Choice D 97) For an automobile manufacturer, the cost of a driver’s side air bag purchased from a supplier and installed in every automobile would best be described as a: A) fixed cost. B) mixed cost. C) step-variable cost. D) variable cost. 98) Fixed costs expressed on a per unit basis: