1. Costs that flow directly to the current income statement are called:
- Period costs.
- Balance sheet costs.
- Product costs.
- Capitalized costs.
- General costs.
2. Which of the following items are management concepts that were created to improve companies' performances?
- Total quality management.
- Customer orientation.
- Continuous improvement.
- Just-in-time manufacturing.
- All of the above are ways that management can improve companies' performances.
3. Factory overhead costs normally include all of the following except:
- Factory rent.
- Indirect material costs.
- Machinery oil.
- Selling costs.
- Indirect labor costs.
4. Which of the following costs would not be classified as factory overhead?
- Property taxes on maintenance machinery.
- Metal doorknobs used on wood cabinets produced.
- Wages of the factory janitor.
- Expired insurance on factory equipment.
- Small tools used in production.
5. The three major cost components of a manufactured product are:
- General, selling, and administrative costs.
- Direct materials, direct labor, and factory overhead.
- Differential costs, opportunity costs, and sunk costs.
- Marketing, selling, and administrative costs.
- Indirect labor, indirect materials, and miscellaneous factory expenses.
6. Managerial accounting is different from financial accounting in that:
- Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions.
- Managerial accounting is used extensively by investors, whereas financial accounting is used only by creditors.
- Managerial accounting is more focused on the organization as a whole and financial accounting is more focused on subdivisions of the organization.
- Managerial accounting is mainly used to set stock prices.
- Managerial accounting never includes nonmonetary information.
7. Which of the following statements is correct concerning the Days' sales in raw materials inventory?
- Most companies generally prefer a high ratio.
- Reveals how much raw materials inventory is available in terms of the number of days' sales.
- Reveals how many times a company turns over its raw materials inventory in a period.
- The ratio does not need to be calculated as it is not important for a manufacturer.
- Is calculated by taking the Raw materials used/Average raw materials inventory.
8. A manufacturing firm's cost of goods manufactured is equivalent to a merchandising firm's:
- Cost of goods purchased.
- Ending merchandise inventory.
- Cost of goods sold.
- Beginning merchandise inventory.
- Cost of goods available.
9. A financial report that summarizes the amounts and types of costs that were incurred in the manufacturing process during the period is a:
- Managerial statement.
- Manufacturing statement.
- Merchandise statement.
- Materiality statement.
- Monetary statement.
10. Materials that are used in support of the production process but are not clearly identified with units or batches of product are called:
- General materials.
- Indirect materials.
- Direct materials.
- Secondary materials.
- Materials inventory.
11. An internal control system consists of the policies and procedures managers use to do all of the following except:
- Protect assets.
- Ensure reliable accounting.
- Urge adherence to company policies.
- Determine pricing for products.
- Promote efficient operations.
12. Period costs for a manufacturing company would flow directly to:
- Factory overhead.
- The current balance sheet.
- The current manufacturing statement.
- The current income statement.
- Job cost sheet.
13. Labor costs that are or batches of product because the labor is used to convert raw materials into finished products called are:
- Finished labor.
- Direct labor.
- Sunk labor.
- Indirect labor.
- All labor.
14. Another title for goods in process inventory is:
- Indirect materials inventory.
- Conversion costs.
- Direct materials inventory.
- Raw materials inventory.
- Work in process inventory.
15. Managerial accounting information:
- Is used mainly by external users.
- Has little to do with controlling costs.
- Can be used for control purposes but not for planning purposes.
- Involves gathering information about costs for planning and control decisions.
- Is generally the only accounting information available to managers.
16. Total manufacturing costs incurred during the year do not include:
- Direct labor.
- Direct materials used.
- Depreciation of machinery.
- Goods in process inventory, beginning balance.
- Factory supplies used.
17. A classification of costs that is useful for assigning responsibility to and evaluating managers is:
- Classification by controllability.
- Classification by relevance.
- Classification by behavior.
- Classification by function.
- Classification by traceability.
18. A mixed cost:
- Requires the future outlay of cash and is relevant for future decision making.
- Does not change with changes in the volume of activity within the relevant range.
- Contains a combination of fixed costs and variable costs.
- Has already been incurred and cannot be avoided so it is irrelevant for decision making.
- Is directly traceable to a cost object.
19. The model whose goal is to eliminate waste while satisfying the customer and providing a positive return to the company is:
- Continuous improvement.
- Managerial accounting.
- Lean business model.
- Customer orientation.
- Total quality management.
20. Product costs:
- Are expenditures necessary and integral to finished products.
- Include selling and administrative expenses.
- Are costs that do not vary with the volume of activity.
- Are costs that vary with the volume of activity.
- Are expenditures identified more with a time period rather than with finished products.