Question 1

Which of the following is the primary focus of financial accounting?

Accepted Answer

A)  providing information that managers need to make operational decisions
B)  providing summarized information on operational results to investors and creditors
C)  providing budgets for future periods
D)  providing highly detailed information on product lines,regions,and divisions

Question 2

Manufacturing companies produce their own products,but merchandising companies do not.

Accepted Answer

A) True 
 B)False

Question 3

The cost of goods sold for Frye Manufacturing in the year was $373,000.The January 1 Finished Goods Inventory balance was $30,200,and the December 31 Finished Goods Inventory balance was $24,000.Calculate the cost of goods manufactured during the year.

Accepted Answer

A)  $397,000
B)  $54,200
C)  $366,800
D)  $6,200

Question 4

The following information relates to Washington,Inc.:

How much were Washington's product costs?

Accepted Answer

A)  $658,250
B)  $369,000
C)  $549,000
D)  $92,920

Question 5

Which of the following statements is true of the flow of product and period costs for a manufacturer?

Accepted Answer

A)  When the manufacturing process is completed,the costs are transferred to the Work-in-Process Inventory account.
B)  The cost of the finished goods that the manufacturer sells becomes its Cost of Goods Sold on the income statement.
C)  Period costs remain in inventory accounts on the balance sheet until the product is sold.
D)  All product costs that have been paid are expensed and reported on the income statement at the end of the accounting period.

Question 6

The cost of direct materials cannot easily be traced to the manufactured product,and therefore,it is a component of manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 7

Jasper,Inc.reports the following cost information for March:

What is the cost of goods sold for March?

Accepted Answer

A)  $2,300
B)  $71,600
C)  $76,600
D)  $78,600

Question 8

The following information was obtained from MCB Manufacturing,Inc.:

Calculate MCB Manufacturing's total product costs.

Accepted Answer

A)  $159,020
B)  $514,500
C)  $115,000
D)  $155,000

Question 9

Which of the following correctly describes the accounting for administrative expenses of a manufacturing company?

Accepted Answer

A)  Administrative expenses are product costs and are expensed as incurred.
B)  Administrative expenses are period costs and are expensed as incurred.
C)  Administrative expenses are product costs and are expensed when the manufactured product is sold.
D)  Administrative expenses are period costs and are expensed when the manufactured product is sold.

Question 10

Define indirect materials and give two examples of indirect materials for a manufacturing company.

Accepted Answer

Indirect materials are used in making a ...

Question 11

List the three kinds of inventory accounts that are used by manufacturing companies.Briefly discuss what each account includes.

Accepted Answer

Raw Materials Inventory includes materia...

Question 12

Excellent,Inc.sells accounting textbooks.The following information summarizes Excellent's operating activities for the year:
  
Required: Prepare Excellent,Inc.'s income statement for the year ended December 31.

Accepted Answer

The answer of Excellent,Inc.sells accounting textbooks.The following information summarizes Excellent's...

Question 13

Which of the following represents the combined sum of direct materials and direct labor?

Accepted Answer

A)  conversion costs
B)  period costs
C)  prime costs
D)  fixed costs

Question 14

Managerial accounting provides financial statements that report results of operations,financial position,and cash flows both to managers and to external stockholders.

Accepted Answer

A) True 
 B)False

Question 15

How does a manufacturing company calculate unit product cost? Why do managers need to know the unit product cost?

Accepted Answer

Unit product cost is calculated by divid...

Question 16

Which of the following is a period cost for a manufacturing company?

Accepted Answer

A)  office rent
B)  wages of factory janitor
C)  insurance cost of production equipment
D)  raw materials

Question 17

Reed Productions has provided the following information for the year:

During the year,Reed produced 72,960 units of product.Calculate the unit product cost.(Round your answer to the nearest cent. )

Accepted Answer

A)  $7.73
B)  $6.63
C)  $7.60
D)  $8.45

Question 18

You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company's bonds.Which of the IMA standards appears to have been violated here?

Accepted Answer

A)  integrity
B)  confidentiality
C)  competence
D)  objectivity

Question 19

Which of the following is true of product costs?

Accepted Answer

A)  They are expensed in the period they are paid.
B)  For external reporting,GAAP requires that they be expensed before the products are sold.
C)  They are first recorded in an inventory account.
D)  For merchandising companies,product costs do not include freight costs.

Question 20

For external reporting purposes,GAAP requires companies to treat period costs as assets.

Accepted Answer

A) True 
 B)False

Exam 18: Introduction to Managerial Accounting

The following information relates to Washington,Inc.: How much were Washington's product costs?

Correct AnswerverifiedShow Answer

Jasper,Inc.reports the following cost information for March: What is the cost of goods sold for March?

Correct AnswerverifiedShow Answer

You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company's bonds.Which of the IMA standards appears to have been violated here?

Correct AnswerverifiedShow Answer

Managerial accounting provides financial statements that report results of operations,financial position,and cash flows both to managers and to external stockholders.

Correct AnswerverifiedShow Answer

Manufacturing companies produce their own products,but merchandising companies do not.

Correct AnswerverifiedShow Answer

Which of the following is true of product costs?

Correct AnswerverifiedShow Answer

The cost of goods sold for Frye Manufacturing in the year was $373,000.The January 1 Finished Goods Inventory balance was $30,200,and the December 31 Finished Goods Inventory balance was $24,000.Calculate the cost of goods manufactured during the year.

Correct AnswerverifiedShow Answer

Which of the following correctly describes the accounting for administrative expenses of a manufacturing company?

Correct AnswerverifiedShow Answer

Which of the following is a period cost for a manufacturing company?

Correct AnswerverifiedShow Answer

Which of the following statements is true of the flow of product and period costs for a manufacturer?

Correct AnswerverifiedShow Answer

Which of the following represents the combined sum of direct materials and direct labor?

Correct AnswerverifiedShow Answer

List the three kinds of inventory accounts that are used by manufacturing companies.Briefly discuss what each account includes.

Correct AnswerverifiedRaw Materials Inventory includes materia...View AnswerShow Answer

The following information was obtained from MCB Manufacturing,Inc.: Calculate MCB Manufacturing's total product costs.

Correct AnswerverifiedShow Answer

How does a manufacturing company calculate unit product cost? Why do managers need to know the unit product cost?

Correct AnswerverifiedUnit product cost is calculated by divid...View AnswerShow Answer

Reed Productions has provided the following information for the year: During the year,Reed produced 72,960 units of product.Calculate the unit product cost.(Round your answer to the nearest cent. )

Correct AnswerverifiedShow Answer

The cost of direct materials cannot easily be traced to the manufactured product,and therefore,it is a component of manufacturing overhead.

Correct AnswerverifiedShow Answer

Which of the following is the primary focus of financial accounting?

Correct AnswerverifiedShow Answer

For external reporting purposes,GAAP requires companies to treat period costs as assets.

Correct AnswerverifiedShow Answer

Excellent,Inc.sells accounting textbooks.The following information summarizes Excellent's operating activities for the year: Required: Prepare Excellent,Inc.'s income statement for the year ended December 31.

Correct AnswerverifiedShow Answer

Define indirect materials and give two examples of indirect materials for a manufacturing company.

Correct AnswerverifiedIndirect materials are used in making a ...View AnswerShow Answer

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Raw Materials Inventory includes materia...
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Unit product cost is calculated by divid...
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Indirect materials are used in making a ...
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