Question 1. Using managerial accounting reports to run operations is an example of which management responsibility?
Planning
Directing
Controlling
Decision making
Question 2. Which of the following statements regarding financial accounting and managerial accounting is correct?
Financial accounting must follow GAAP, whereas managerial accounting does not need to follow GAAP.
Financial accounting is concerned with the future, whereas managerial accounting is concerned with the past.
Managerial accounting information must be objective and reliable, whereas financial accounting information must be relevant.
Financial accounting is focused on decision making, whereas managerial accounting information is concerned with reporting historical transactions accurately.
Question 3. Which of the following professional standards applies to providing recommendations that are accurate and timely?
Integrity
Credibility
Confidentiality
Competence
Question 4. Which of the following is an inventoriable product cost?
Commissions paid on each unit sold
Depreciation on factory equipment
Cost of shipping products
Rent for the headquarters office building
Question 5. Which of the following is a variable cost?
The salary of the plant manager
Rent for the factory
Shipping products to customers
Insurance for the headquarters office building
Question 6. Which of the following is a conversion cost?
Interest paid on the headquarters office building
Costs to rent the factory
Advertising costs
Direct materials costs
Question 7. On December 31, 2015, XYZ Inc. has a balance in the Finished Goods Inventory account of $50,000. On January 1, 2015, the balance in the Finished Goods Inventory account was $75,000. On December 31, 2015, the balance in the Work-in-Process inventory account is $25,000. On January 1, 2015, the balance in the Work-in-Process inventory account is $10,000. Cost of goods manufactured is $160,000. How much is cost of goods sold?
$135,000
$145,000
$185,000
$175,000
Question 8. Which of the companies below would be most likely to use job-order costing?
A potato chip manufacturer
A custom aircraft manufacturer
A pharmaceutical manufacturer
A dairy farm
Question 9. ABC Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead cost and direct labor for August follows.
Estimated Actual
Overhead cost $270,000 $300,000
Direct labor hours 20,000 30,000
Direct labor cost $90,000 $60,000
How much is the predetermined overhead rate?
300%
500%
$10.00
$13.50
Question 10. During 2015, Thompson Company applied overhead using a job-order costing system at a rate of $15 per direct labor hour. Estimated direct labor hours for the year were 110,000, and estimated overhead for the year was $1,650,000. Actual direct labor hours for 2015 were 100,000, and actual overhead was $1,520,000. What is the amount of under- or over-applied overhead for the year?
$130,000 under-applied
$20,000 under-applied
$130,000 over-applied
$20,000 over-applied