Online Tutorial Quiz

Please answer all questions

1		Management accounting is the design and use of accounting information systems inside the company to achieve the company's objectives.
			A)	True
			B)	False
2		A value chain is the linked activities and resources necessary to create and deliver the product or service to a customer.
			A)	True
			B)	False
3		A benchmark study is designed to show an organization how its costs and processes compare to others in the industry.
			A)	True
			B)	False
4		Management accounting is subject to the same generally accepted accounting principles (GAAP) as financial accounting.
			A)	True
			B)	False
5		The reporting entities of management accounting are segments of the organization rather than the organization as a whole.
			A)	True
			B)	False
6		In order to provide data necessary for management accounting functions, two accounting information systems are maintained; one for financial accounting and one for management accounting.
			A)	True
			B)	False
7		Manufacturing costs are often divided into four broad categories.
			A)	True
			B)	False
8		Manufacturing costs are not immediately recorded as costs of the current accounting period.
			A)	True
			B)	False
9		Product costs and period costs are synonymous terms.
			A)	True
			B)	False
10		Assigning product cost to the costs of creating inventory violates the matching principle of accounting.
			A)	True
			B)	False
11		Most manufacturers typically account for three types of inventory.
			A)	True
			B)	False
12		Virtually every manufacturing company uses a periodic inventory system.
			A)	True
			B)	False
13		Because credits to the Direct Labor account occur throughout the period, it is possible to have an ending credit balance in the Direct Labor account.
			A)	True
			B)	False
14		When recording the end-of-period adjustment for deferred insurance, the portion of insurance expense that is related to factory operations should be debited to the Manufacturing Overhead account.
			A)	True
			B)	False
15		The three product or manufacturing costs of direct material, direct labor, and manufacturing overhead are also known as direct manufacturing costs.
			A)	True
			B)	False
16		Manufacturing overhead is allocated to production or assigned to products in proportion to some activity base.
			A)	True
			B)	False
17		The activity base for overhead application is called a cost driver.
			A)	True
			B)	False
18		Once a cost driver is identified, it is normally applied universally to all production departments.
			A)	True
			B)	False
19		The cost of warehousing finished goods is a manufacturing cost.
			A)	True
			B)	False
20		A schedule of the cost of finished goods manufactured accompanies the income statement as one of the formal financial statements of a manufacturer.
			A)	True
			B)	False
21		A schedule of the cost of finished goods manufactured shows the total cost of finished goods manufactured, and therefore cannot provide any detail about the per-unit cost of the product.
			A)	True
			B)	False
22		Which of the following is a manufacturing cost?
			A)	Direct material
			B)	Direct labor
			C)	Manufacturing overhead
			D)	All of the above
			E)	None of the above
23		Which of the following is a period cost?
			A)	Direct materials
			B)	Sales commissions
			C)	Direct labor
			D)	Factory rent
			E)	Factory utilities
24		Which of the following inventories is classified as a current asset on the balance sheet?
			A)	Finished goods inventory
			B)	Work in process inventory
			C)	Direct materials inventory
			D)	Office supplies inventory
			E)	All of the above
25		Which of the following journal entries is used to purchase direct materials when using a perpetual inventory system?
			A)	Materials Inventory, debit, and Accounts Payable, credit
			B)	Purchases, debit, and Accounts Payable, credit
			C)	Purchases, debit, and Cash, credit
			D)	Materials Inventory, debit, and Work in Process, credit
			E)	Materials Inventory, debit, and Manufacturing Overhead, credit

Consider the following:
Office and general salaries $40,000
Direct labor 80,000
Factory insurance 8,000
Sales commissions 12,000
Office insurance 2,000
Factory utilities 8,000

26		What amount was debited to Manufacturing Overhead?
			A)	$ 80,000
			B)	$ 96,000
			C)	$ 16,000
			D)	$150,000
			E)	$ 18,000

Consider the following:
Beginning Materials Inventory $ 15,000
Purchases of material 60,000
Ending Materials Inventory 8,000
Beginning Direct Labor 70,000
Ending Direct Labor (5,000)
Total manufacturing overhead 90,000
Beginning Work in Process Inventory 4,000
Costs transferred to Finished Goods 230,000

27		What was the ending balance of the Work in Process account?
			A)	$10,000
			B)	$ 6,000
			C)	$ 2,000
			D)	$14,000
			E)	$ 8,000

Consider the following:
Direct materials used $ 50,000
Direct labor applied 80,000
Manufacturing overhead applied 120,000
Ending Work in Process Inventory 10,000
Ending Finished Goods Inventory 20,000

28		There was no beginning balance in Work in Process Inventory or in Finished Goods Inventory. What was the cost of goods sold?
			A)	$220,000
			B)	$240,000
			C)	$250,000
			D)	$200,000
			E)	None of the above

29		Which of the following categories of cost are not included under the broad umbrella of manufacturing overhead?
			A)	Indirect labor
			B)	Machinery and equipment costs
			C)	Plant occupancy costs
			D)	Cost of regulatory compliance
			E)	Indirect selling expenses
30		If estimated manufacturing overhead costs are $450,000 and estimated direct labor hours, which have a causal effect on manufacturing overhead costs, are 90,000, what is the overhead application rate?
			A)	$5 per labor hour
			B)	$9 per labor hour
			C)	$5 per hour of manufacturing overhead
			D)	Cannot be determined from the information provided
			E)	None of the above
31		Estimated manufacturing overhead costs are $450,000 and estimated direct labor hours, which have a causal effect on manufacturing overhead costs, are 90,000. Actual manufacturing costs were $420,000. Actual direct labor hours were 82,000. What is the ending balance of the Manufacturing Overhead account?
			A)	A credit balance of $10,000
			B)	A debit balance of $10,000
			C)	A zero balance
			D)	$410,000
			E)	None of the above

Consider the following:
Beginning work in process inventory $ 20,000
Direct material used $ 50,000
Direct labor used 80,000
Manufacturing overhead 120,000
Ending work in process inventory 10,000
Cost of finished goods manufactured 260,000

32		What are the total manufacturing costs?
			A)	$270,000
			B)	$260,000
			C)	$280,000
			D)	$250,000
			E)	$240,000

Consider the following:
Beginning work in process inventory $ 20,000
Total manufacturing costs 250,000
Ending work in process inventory 10,000
Cost of finished goods manufactured 260,000
Beginning finished goods inventory 40,000
Sales 500,000
Gross profit 220,000

33		What was the balance of the ending finished goods inventory?
			A)	$ 10,000
			B)	$280,000
			C)	$ 20,000
			D)	$ 30,000
			E)	Zero balance

Consider the following:
Beginning work in process inventory $ 20,000
Total manufacturing costs 250,000
Ending work in process inventory 10,000
Beginning finished goods inventory 40,000
Sales 500,000
Gross profit 220,000

34		What is the average per unit cost of the 50,000 units produced?
			A)	$ 5.60
			B)	$ 5.20
			C)	$ 5.40
			D)	$ 4.40
			E)	$10.00