Managerial Accounting - Exercises

1.A portion of a company's inventory is shown below:

Sales$350,000

Cost of Goods Sold:

Beginning Inventory$ 15,000

Purchases250,000

Cost of Goods Available for Sale 265,000

Less: Ending Inventory13,000

Cost of Goods Sold252,000

Gross Profit$ 98,000

What type of company is illustrated?

A.Service Corporation

B.Merchandising Corporation

C.Manufacturing Corporation

D.Not-for-profit Corporation

2.

Which of the following is NOT a value chain activity?

A. Research & Development

B. Production

C. Distribution

D. Quality Control

3.Which of the following is a direct cost in the production of tire jacks for a machine shop?

A.Utilities

B.Taxes

C.Steel

D.Rent

4.Which of the following is an indirect cost in the construction cost of a home for a building company?

A.Insurance

B.Paint

C.Lumber

D.Carpeting

5.Which of the following companies has all costs along the value chain accounted for as period costs?

A.Service Corporation

B.Merchandising Corporation

C.Manufacturing Corporation

D.None of the above

6.A manufacturer would treat direct materials, direct labour, and overhead as:

A.inventoriable product costs.

B.period costs.

C.both inventoriable product and period costs.

D.neither inventoriable product nor period costs.

7.Which of the following is NOT a relevant cost when buying new manufacturing equipment?

A.Sales tax

B.Cost of machine being replaced

C.Purchase price

D.Insurance on the machine

8.

Which of the following is a fixed cost for a plant that manufactures iPods?

A. Plastic used to make the cases

B. Employee wages for assembly

C. Computer chip used in each iPod

D. Straight-line depreciation on stamping machine used to form iPod cases

9.

Which of the following is a variable cost for a plant that manufactures iPods?

A. Advertising costs

B. Salary of payroll clerk

C. Straight line depreciation of warehouse building

D. Wire used for the headphones

10.Rocketspray's manufacturing costs for July are:

* Materials cost: $4,000

* Labour cost: $3,200

* Overhead: $800

A. $3

B. $5

C. $20

D. $24

If Rocketspray's one plant employee manufactured 10 bottles per hour, and worked 8 hours per day for 20 days in July, what is the cost per bottle?