Question 1. The cost of indirect materials is not included in product cost.
True
False
Question 2
An important cost to measure in a manufacturing company is the cost to manufacture a product.
True
False
Question 3
Which of the four elements listed below would not be considered a product cost?
A. Salaries of the factory supervisors
B. Repairs and maintenance on factory equipment
C. Salaries of janitors working in the factory
D. Salary of the president of the company
Question 4
The cost of direct materials to make automobiles would include the cost of the windshields.
True
False
Question 5
The following data pertain to the Inntell Co.:
Materials inventory, 1/1/16................. $48,400
Materials inventory, 12/31/16............... 21,600
Materials purchases......................... 71,600
Work in process inventory, 1/1/16.......... 63,600
Work in process inventory, 12/31/16......... 49,200
Direct labor................................ 68,400
Manufacturing overhead...................... 97,200
Finished goods inventory, 1/1/16............ 66,400
Finished goods inventory, 12/31/16.......... 77,200
Cost of goods sold should be:
A. $206,800
B. $264,000
C. $267,600
D. $240,800
Question 6
Fixed costs vary directly in total amount with changes in the volume of production activity or output.
True
False
Question 7
Indirect materials are period costs.
True
False
Question 8
Which of the following costs is not included in manufacturing overhead?
A. Depreciation on factory buildings and equipment
B. Factory utility expenses
C. The salary of the supervisor over the personnel who perform direct labor
D. Direct materials costs
Question 9
A rule for management accounting might be: "different information for different purposes."
True
False
Question 10
The following data pertain to the Best Co.:
Materials inventory, 1/1/16................. $54,000
Materials inventory, 12/31/16............... 40,500
Materials purchases......................... 81,500
Work in process inventory, 1/1/16........... 28,500
Work in process inventory, 12/31/16......... 40,500
Direct labor................................ 34,000
Manufacturing overhead...................... 52,000
Finished goods inventory, 1/1/16............ 39,500
Finished goods inventory, 12/31/16.......... 11,000
Cost of goods sold should be:
A. $197,500
B. $184,000
C. $137,500
D. $181,000
Question 11
Which of the following costs are not selling costs?
A. Delivery and storage costs for finished goods
B. Market research costs
C. Salaries of production workers
D. Advertising costs to promote the company name; not a particular product
Question 12
Which statement is false? Indirect factory labor costs:
A. are costs that cannot or will not, for practical reasons, be traced to the product being manufactured.
B. may include fringe benefits of factory workers.
C. are included in manufacturing overhead.
D. are included in administrative costs.
Question 13
Certain manufacturing costs may, for practical reasons, not be traced directly to the product manufactured.
True
False
Question 14
If fixed costs are $48,000 and the contribution margin ratio is 40% for a product that sells for $20, what is the break-even point in units?
A. 8,333
B. 5,000
C. 6,000
D. 12,000
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
CVP analysis is a useful device to answer "What if?" questions about future operations.
True
False
Question 17
Fixed costs are $135,000, variable costs and price are $10 and $20 respectively. What is the net income on sales of 30,000 units?
A. $600,000
B. $200,000
C. $300,000
D. $165,000
Question 18
Sales are $1,000,000 for a product with a variable cost per unit of $6 and a sales price of $20. If fixed costs are $250,000, what is the contribution margin?
A. $400,000
B. $500,000
C. $200,000
D. $700,000
Question 19
A company wants to earn $60,000 on Product B. Its fixed costs are $40,000 and variable costs are $10 per unit. Product B sells for $20 per unit. The number of units of Product B that must be produced to reach the company's desired profit is:
A. 12,000 units.
B. 10,000 units.
C. 6,000 units.
D. 4,000 units.
Question 20
The margin of safety rate is calculated by dividing the margin of safety by current sales.
True
False
Question 21
Total variable costs tend to vary directly with changes in volume.
True
False
Question 22
In a cost-volume-profit chart, the intersection of the total cost line with the sales line indicates the break-even point.
True
False
Question 23
Mixed costs exhibit some of the characteristics of both fixed costs and variable costs.
True
False
Question 24
Assume that a company has fixed costs of $200,000, variable costs per unit of $48, and a selling price of $80 per unit. Its contribution margin per unit is $32.
True
False
Question 25
The margin of safety is the amount by which sales can decrease before a loss will be incurred.
True
False
Question 26
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
Question 27
In the Profit's Product Costs and Margin Clips video, Maarse Florist had a $20 profit on an $85 arrangement.
True
False
Question 28
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 29
In the Profit's Product Costs and Margin Clips video, Maarse Florist had a good understanding of product costs and margins and was pricing their products to maximize profits.
True
False
Question 30
In the Profit's Product Costs and Margin Clips video, the two primary costs of making a flower arrangement are raw materials and labor.
True
False