Question 1

The aspects of the management process are listed below. Match each phase to the appropriate description.
_____ Planning
_____ Directing
_____ Controlling
_____ Improving
_____ Decision making
a) Used by managers for continuous improvement
b) Managers must decide how to respond to unfavorable performances
c) Used by management to develop the organization's objectives and goals
d) Monitoring the operating results of implemented plans and comparing actual results
e) Managers run their day to day activities

Accepted Answer

The answer of The aspects of the management process are...

Question 2

Product costs are also referred to as inventoriable costs.

Accepted Answer

A) True 
 B)False

Question 3

Managerial accounting reports must be useful to the user of the information.

Accepted Answer

A) True 
 B)False

Question 4

What is the primary criterion for the preparation of managerial accounting reports?

Accepted Answer

A)   Relevance of the reports
B)   Meet the manager needs
C)   Timing of the reports
D)   Cost of the reports

Question 5

Labor costs that are directly traceable to the product are part of factory overhead.

Accepted Answer

A) True 
 B)False

Question 6

A company sells goods for $150,000 that cost $60,000 to manufacture. Which statement(s)  are true?

Accepted Answer

A)   The company will recognize sales on the balance sheet of $150,000.
B)   The company will recognize $90,000 gross profit on the balance sheet.
C)   The company will decrease finished goods by $60,000.
D)   All of these are true.

Question 7

Period costs include:

Accepted Answer

A)   current assets on the balance sheet
B)   current liabilities on the balance sheet
C)   operating costs that are shown on the income statement when products are sold
D)   operating costs that are shown on the income statement in the period in which they are incurred

Question 8

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 expenses when incurred
D)   period costs and expensed when the goods are sold

Question 9

An example of a period cost is:

Accepted Answer

A)   advertising expense
B)   indirect materials
C)   depreciation on factory equipment
D)   property taxes on plant facilities

Question 10

Managers use managerial information to evaluate performance of a company's operation.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is an example of direct labor cost for an airplane manufacturer?

Accepted Answer

A)   Cost of oil lubricants for factory machinery
B)   Cost of wages of assembly worker
C)   Salary of plant supervisor
D)   Cost of jet engines

Question 12

The statement of cost of goods manufactured is an extension of the income statement for a manufacturing company.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an example of a factory overhead cost?

Accepted Answer

A)   Repair and maintenance cost on the administrative building
B)   Factory heating and lighting cost
C)   Insurance premiums on salespersons' automobiles
D)   President's salary

Question 14

The controller's staff consists of management accountants responsible for systems and procedures, general accounting, budgets, taxes, and cost accounting.

Accepted Answer

A) True 
 B)False

Question 15

Goods that are partially completed by a manufacturer are referred to as:

Accepted Answer

A)   merchandise inventory
B)   work in process inventory
C)   finished goods inventory
D)   materials inventory

Question 16

Which of the following is the principle reason for preparing managerial accounting reports?

Accepted Answer

A)   Usefulness to management
B)   Cost of preparation
C)   Clarity
D)   GAAP

Question 17

The following are all product costs except:

Accepted Answer

A)   Direct materials
B)   Sales and administrative expenses
C)   Direct labor
D)   Factory overhead

Question 18

All of the following are examples of indirect labor except:

Accepted Answer

A)   maintenance personnel
B)   janitorial personnel
C)   machine operators
D)   plant managers

Question 19

Which of the following items would not be classified as part of factory overhead?

Accepted Answer

A)   Direct labor used
B)   Amortization of manufacturing patents
C)   Production supervisors' salaries
D)   Factory supplies used

Question 20

Rent expense incurred on a factory building would be treated as a(n) :

Accepted Answer

A)   indirect cost
B)   period cost
C)   product cost
D)   both A and C are correct

Exam 18: Managerial Accounting Concepts and Principles

The following are all product costs except:

Correct Answer
verified

Product costs are also referred to as inventoriable costs.

Correct Answer
verified

The controller's staff consists of management accountants responsible for systems and procedures, general accounting, budgets, taxes, and cost accounting.

Correct Answer
verified

The statement of cost of goods manufactured is an extension of the income statement for a manufacturing company.

Correct Answer
verified

Labor costs that are directly traceable to the product are part of factory overhead.

Correct Answer
verified

Rent expense incurred on a factory building would be treated as a(n) :

Correct Answer
verified

An example of a period cost is:

Correct Answer
verified

Which of the following is an example of a factory overhead cost?

Correct Answer
verified

Managers use managerial information to evaluate performance of a company's operation.

Correct Answer
verified

Correct Answer
verified

Which of the following items would not be classified as part of factory overhead?

Correct Answer
verified

Goods that are partially completed by a manufacturer are referred to as:

Correct Answer
verified

Managerial accounting reports must be useful to the user of the information.

Correct Answer
verified

A company sells goods for $150,000 that cost $60,000 to manufacture. Which statement(s) are true?

Correct Answer
verified

Which of the following is an example of direct labor cost for an airplane manufacturer?

Correct Answer
verified

Which of the following is the principle reason for preparing managerial accounting reports?

Correct Answer
verified

All of the following are examples of indirect labor except:

Correct Answer
verified

Period costs include:

Correct Answer
verified

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

Correct Answer
verified

What is the primary criterion for the preparation of managerial accounting reports?

Correct Answer
verified

Exam 18: Managerial Accounting Concepts and Principles

The following are all product costs except:

Correct AnswerverifiedShow Answer

Product costs are also referred to as inventoriable costs.

Correct AnswerverifiedShow Answer

The controller's staff consists of management accountants responsible for systems and procedures, general accounting, budgets, taxes, and cost accounting.

Correct AnswerverifiedShow Answer

The statement of cost of goods manufactured is an extension of the income statement for a manufacturing company.

Correct AnswerverifiedShow Answer

Labor costs that are directly traceable to the product are part of factory overhead.

Correct AnswerverifiedShow Answer

Rent expense incurred on a factory building would be treated as a(n) :

Correct AnswerverifiedShow Answer

An example of a period cost is:

Correct AnswerverifiedShow Answer

Which of the following is an example of a factory overhead cost?

Correct AnswerverifiedShow Answer

Managers use managerial information to evaluate performance of a company's operation.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following items would not be classified as part of factory overhead?

Correct AnswerverifiedShow Answer

Goods that are partially completed by a manufacturer are referred to as:

Correct AnswerverifiedShow Answer

Managerial accounting reports must be useful to the user of the information.

Correct AnswerverifiedShow Answer

A company sells goods for $150,000 that cost $60,000 to manufacture. Which statement(s) are true?

Correct AnswerverifiedShow Answer

Which of the following is an example of direct labor cost for an airplane manufacturer?

Correct AnswerverifiedShow Answer

Which of the following is the principle reason for preparing managerial accounting reports?

Correct AnswerverifiedShow Answer

All of the following are examples of indirect labor except:

Correct AnswerverifiedShow Answer

Period costs include:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What is the primary criterion for the preparation of managerial accounting reports?

Correct AnswerverifiedShow Answer

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