[1.]

The cost of lubricants used to grease a production machine in a manufacturing company is an example of a(an):

Select one:

a. Indirect material cost

b. None of the above

c. Period cost

d. Direct material cost

[2.]

Silk Pro Co. manufactures textiles. Silk's manufacturing costs last year included the following salaries and wages:

Loom operators .......................... $120,000

Factory foremen ........................ $45,000

Machinery repairmen ................ $30,000

What is the amount of direct labor included in this list?

Select one:

a. $150,000

b. $195,000

c. $120,000

d. $165,000

[3.]

Which of the following is true of a company that uses absorption costing?

Select one:

a. Unit product costs can change as a result of changes in the number of units manufactured.

b. Variable selling expenses are included in product costs.

c. Net operating income fluctuates directly with changes in sales volume.

d. Fixed production and fixed selling costs are considered to be product costs.

[4.]

In the middle of the year, the price of Lake Corporation's major raw material increased by 8%. How would this increase affect the company's break-even point and margin of safety?

Select one:

a. Break-even point: Decrease ; Margin of safety: Decrease

b. Break-even point: Increase ; Margin of safety: Increase

c. Break-even point: Decrease ; Margin of safety: Increase

d. Break-even point: Increase ; Margin of safety: Decrease

[5.]

Activity based costing (ABC) is considered to be a traditional costing method.

Select one:

True

False

[6.]

Which of the following budgets are prepared before the production budget?

Select one:

a. Direct materials purchase budget

b. Direct Labor budget

c. Sales budget

d. Direct materials usage budget

[7.]

In calculating the break-even point for a multi-product company, which of the following assumptions are commonly made?

I. Selling prices are constant.

II. Variable expenses are constant per unit.

III. The sales mix is constant.

Select one:

a. I and II

b. I and III

c. I, II, and III

d. II and III

[8.]

Although financial and managerial accounting differ in many ways, they are similar in that both rely on the same underlying financial data.

Select one:

True

False

[9.]

Managerial accounting is a branch of financial accounting and serves essentially the same purposes as financial accounting.

Select one:

True

False

[10.]

The sales price of a product less the total variable cost of the product is called contribution margin.

Select one:

True

False