1.) Giant Manufacturing specializes in manufacturing bicycles. The company produces 1000 model Jaguar bicycles per month. Determine whether each of the following cost items should be Product Costs or Period Costs and if a Product cost, are they Direct Materials, Direct Labor, or Manufacturing Overhead.
QUESTION 1
Manufacturing overhead includes all of the following except:
A. real estate taxes on factory buildings.
B. depreciation on salesroom fixtures.
C. utilities for factory buildings.
D. wages paid for forklift operators moving direct materials.
QUESTION 2
The cost of direct materials to make automobiles would include the cost of the windshields.
True
False
QUESTION 3
Which of the following is not a difference between financial and management accounting?
A. Financial accounting is general purpose in nature, while management accounting is for a specific purpose.
B. The primary data for each is accumulated in different accounting systems.
C. Financial accounting information is historical in nature, while management accounting is future oriented.
D. Financial accounting is typically mandatory, while management accounting is optional.
QUESTION 4
In an automobile manufacturing company, manufacturing overhead includes all manufacturing costs except for those accounted for as direct labor.
True
False
QUESTION 5
Which of the following costs are expensed in the period incurred instead of being charged to the product?
A. Direct materials
B. Prime costs
C. Direct labor
D. Period costs
QUESTION 6
Which of the four elements listed below would not be considered a product cost?
A. Repairs and maintenance on factory equipment
B. Salary of the president of the company
C. Salaries of the factory supervisors
D. Salaries of janitors working in the factory
QUESTION 7
Period costs would include which of the following?
A. Insurance premium on plant
B. Annual depreciation on factory equipment
C. Overtime premium paid to production workers
D. Advertising costs per year
QUESTION 8
Management accounting seeks to provide useful information primarily to those outside an organization.
True
False
QUESTION 9
Which of the following costs are not selling costs?
A. Advertising costs to promote the company name; not a particular product
B. Delivery and storage costs for finished goods
C. Market research costs
D. Salaries of production workers
QUESTION 10
Since they must comply with generally accepted accounting principles, financial accounting reports are usually more detailed than managerial accounting reports.
True
False
QUESTION 11
An important cost to measure in a manufacturing company is the cost to manufacture a product.
True
False
QUESTION 12
Product costs are inventoriable costs.
True
False
QUESTION 13
The cost of indirect materials is not included in product cost.
True
False
QUESTION 14
The relevant range concept is essential in CVP analysis in order to:
A. maximize the data calculations.
B. present curvilinear relationships.
C. make assumptions about constant unit prices and variable unit costs within a range of activity.
D. All of the other answers are incorrect.
QUESTION 15
The break-even point is the point at which:
A. sales equals fixed costs plus variable costs.
B. fixed costs equal variable costs.
C. variable costs equal sales.
D. All of the other answers are correct.
QUESTION 16
Yu Co. sells a single product at $80 per unit. For output up to 80,000 units, its fixed costs are $400,000. Variable costs are $20 per unit. If 40,000 units are produced and sold, the company has net income (loss) of:
A. $1,050,000
B. $2,100,000
C. $1,600,000
D. $2,000,000
QUESTION 17
Kotel Company sells 10,000 units of a product for $40 with variable unit costs of $8 and fixed costs of $80,000. The contribution margin and contribution margin per unit are:
A. $320,000; $32
B. $360,000; $36
C. $150,000; $15
D. $280,000; $28
QUESTION 18
If a company wants to maximize net income, it should produce at its break-even point.
True
False
QUESTION 19
Other factors remaining constant, a reduction in fixed costs will decrease a company's break-even point.
True
False
QUESTION 20
The total contribution margin dollars at the break-even point are equal to the fixed costs.
True
False
QUESTION 21
CVP does not require that costs be accurately classified as fixed or variable.
True
False
QUESTION 22
The amount of variable cost per unit remains constant as the production level changes; the amount of fixed cost per unit changes inversely with the production level.
True
False
QUESTION 23
The break-even point will change if either fixed costs change or the selling price per unit changes.
True
False
QUESTION 24
Cost-volume-profit analysis assumes that selling price, variable cost per unit, and total fixed costs fluctuate through the relevant range.
True
False
QUESTION 25
Break-even analysis could be used by management:
A. to determine the additional sales volume required to cover a contemplated expenditure on advertising, all other factors remaining constant.
B. to determine the effect of a change in selling price on net income at various levels of sales.
C. to analyze the effect of substituting a production method that would decrease fixed costs but would at the same time increase variable costs per unit.
D. to accomplish all of the other answers.
QUESTION 26
In the Profit's Product Costs and Margin Clips video, how many days a week is Schuler's BBQ open?
7
6
5
3
QUESTION 27
In the Profit's Product Costs and Margin Clips video, Marcus thinks Schuler's should charge how much for an adult dinner?
$13.95
$15.00
$8.95
$12.00
QUESTION 28
In the Profit's Product Costs and Margin Clips video, Schuler's BBQ average food cost is 61%. What should it be?
40%
20%
50%
30%
QUESTION 29
In the Profit's Product Costs and Margin Clips video, the cost ot make an $85 arrangement at Maarse Florist is:
$22
$47
$60
$81
QUESTION 30
In the Profit's Product Costs and Margin Clips video, how much over the course of a year does Marcus estimate My Big Fat Greek Gyro will make if they switch from Frozen to Fresh French Fries?
$10,000
$100,000
$25,000
$50,000