Multiple choice

1. Which of the following costs is a fixed cost?

a. sellers commission b. cost of utilities c. direct labor cost d. advertising cost

2.Which of the following costs are part of items in process?

a. manufacturing overhead costs b. marketing manager salary c. depreciation of office photocopiers d. salary of maintenance employees of administrative offices

3. The salary of a factory security guard is classified as:

a. indirect product cost b. direct product cost c. period cost d. opportunity cost

4. The company Seguridad PR is dedicated to the manufacture of motorcycle helmets. During the month of March, the cost of manufactured goods was $85,000. If the finished goods inventory at the beginning of the month was $30,000 and the finished goods inventory at the end of the month was $10,000. How much was your cost of goods sold during March?

a. $65,000 b. $105,000 c. $115,000 d. $45,000

5. The general manager of the Los Pollos Hermanos Company needs a report of sales by product for the past month. Should the US GAAP (Generally Accepted Accounting Principles) rules be followed in the preparation of the report?

a. TRUE b. fake

6. A manufacturer of luxury umbrellas wants to sell his product for $500 per unit, with a profit margin of 30% on sales. What is the maximum cost that this builder is willing to incur in the production of these umbrellas?

a.$400 b. $650 c. $150 d. $350

7. What part of the IMA Code of Ethics would be violated if a management accountant disclosed information about the marketing strategies of a competing company?

a. Objectivity b. Competence c. Integrity d. confidentiality

8. Kuat Drive Yards Enterprises made the following projections (estimates) for the year 2023: Manufacturing overhead $100,000 Direct labor hours 15,000 The company used 6,000 direct labor hours. It uses normal costing and determines the allocation rate (predetermined overhead rate) based on the number of direct labor hours. The company incurred $9,000 of manufacturing overhead costs during that month. What is the allocation rate (default rate) that ABC Companies will use for manufacturing overhead? a.$6.67 per hour b. $0.15 per hour c. $11.11 per hour d. $16.67 per hour

9. The functions of authorizing transactions, recording transactions, and physical custody of assets should be assigned to different employees. Assigning those functions among employees is known as:

a. separation of tasks b. Performance evaluations c. physical controls d. proper authorization

10. Which of the following is a mixed cost?

a. Water service expense b. Raw material. c. manager salary d. fumigation cost

11. Assume that Empresas Prepas Colgados decides to use activity-based accounting instead of the traditional method to allocate manufacturing overhead costs, the company

a. Divide manufacturing overhead costs (CIM) into homogeneous groups b. It will identify the activities that are related to indirect manufacturing costs. c. All the answers are correct. d. You will use more computations for CIM allocation than if you use the traditional method.

12. Management accounting information depends

a. of the requirements of the Department of the Treasury. b. the type of decisions made by different departments in an organization. c. of the FASB requirements d. of the requirements of the Securities and Exchange Commission

13. Which of the following accounts is reported as an asset on a manufacturer's statement of financial position?

a. Finished Goods Inventory b. Direct Materials Inventory c. All the answers are correct. d. Work-in-Process Inventory

14. Below is the result of operations of Empresas Pins International for the month of September: Sales (2,500 units) $8,900 Variable costs (3,600) Fixed costs (5,100) Net income $200 If the selling price per unit increases by 15%, net income would increase by:

a. $30 b. $795 c. $1,335 d. It has no effect on net income.

15. A manufacturing company offers the following information: Direct material cost $6.00 per unit Direct labor $4.25 Variable manufacturing overhead $2.70 Fixed manufacturing overhead $3.00 Clerk salary $60,000 Advertising expenses $65,000 What is the total manufacturing cost (product cost) per unit?

a. $11.70 b. $12.95 c. $15.95 d. $10.25

16. The cost of maintaining the patio and parking lot of the administrative offices is:

a. period cost b. Product cost-indirect c. Product costs-direct

17. What are the components of internal control? a. monitoring, recording and punishment. b. risk and control activities. c. monitoring, control activities, risk assessment and control environment. d. risk assessment and control activities.

18. Suppose your computer has just broken down and you are considering repairing it or buying a new one. The cost of computer repair is considered:

a. a product cost b. sunk cost c. an opportunity cost d. a differential cost

19. Which of the following premises is true about the Sarbanes Oxley Act of 2002?

a. did not alter the management of auditor-client relations. b. creates less stringent internal control procedures. c. applies to all companies (public companies) that must file financial statements with the SEC. d. It arises because companies were losing money by implementing what was required by laws that preceded it.

20. The company Camisas para Universitarios, Inc. is considering launching a new model of sports shirts on the market. How would you classify the ink used to print the logos?

a. direct material b. period cost c. direct labor d. manufacturing overhead cost