QUESTION 1

Managerial accounting information generally pertains to subunits of a business and is very detailed.

True

False

QUESTION 2

Managerial accounting internal reports are prepared less frequently than are classified financial statements.

True

False

QUESTION 3

The Sarbanes-Oxley Act applies to both mangerial accounting and financial accounting.

True

False

QUESTION 4

Direct materials and direct labor are examples of product costs.

True

False

QUESTION 5

The value chain is all the activities associated with providing a product or service.

True

False

QUESTION 6

Managerial accounting does not encompass

	A.	accumulating and presenting data for management decsion making.
	B.	adhering to general accepted accounting principles.
	C.	determining cost behavior.
	D.	profit planning.

QUESTION 7

Financial statements for external users can be described as

	A.	user-specific.
	B.	general-purpose.
	C.	special-purpose.
	D.	managerial reports.

QUESTION 8

The reporting standard for internal financial reports is

	A.	relevance.
	B.	rule-of thumb standard.
	C.	generally accepted accounting principles.
	D.	determined by the auditors.

QUESTION 9

What activities and responsibilities are not associated with management's functions?

	A.	Planning
	B.	Accountability
	C.	Controlling
	D.	Directing

QUESTION 10

Both direct materials and indirect materials are

	A.	raw materials.
	B.	manufacturing overhead.
	C.	merchandise inventory.
	D.	sold directly to customers by a manufacturing company.

QUESTION 11

Which one of the following would not be classified as manufacturing overhead?

	A.	Indirect labor
	B.	Direct labor
	C.	Insurance on factory building
	D.	Indirect materials

QUESTION 12

Because of automation, which component of product cost is declining?

	A.	Direct labor
	B.	Direct materials
	C.	Manufacturing overhead
	D.	Advertising

QUESTION 13

Which one of the following is an example of a period cost?

	A.	A change in benefits for the union workers who work in the New York plant of a Fortune 1000 manufacturer.
	B.	Workers' compensation insurance on factory workers' wages allocated to the factory.
	C.	Advertising costs to promote a new product.
	D.	Depreciation of the factory equipment.

QUESTION 14

Which one of the following costs would not be inventoriable?

	A.	Income taxes
	B.	Factory insurance costs
	C.	Depreciation on the factory building
	D.	Indirect labor costs

QUESTION 15

Product costs consist of

	A.	direct materials and direct labor only.
	B.	direct materials, direct labor, and manufacturing overhead.
	C.	selling and administrative expenses.
	D.	overhead only.

QUESTION 16

Using the following information, compute the cost of direct materials used.

Raw materials inventory, January 1	$ 50,000
Raw materials inventory, December 31	75,000
Work in process, January 1	30,000
Work in process, December 31	20,000
Finished goods, January 1	60,000
Finished goods, December 31	48,000
Raw materials purchases	900,000
Direct labor	690,000
Factory utilities	230,000
Indirect labor	80,000
Factory depreciation	500,000
Operating expenses	630,000

	A.	$875,000.
	B.	$1,025,000.
	C.	$925,000.
	D.	$1,270,000.

QUESTION 17

Assuming the cost of direct materials used is $900,000, compute the total manufacturing costs using the information below.

Work in process, January 1	30,000
Work in process, December 31	20,000
Finished goods, January 1	60,000
Finished goods, December 31	48,000
Direct labor	690,000
Factory utilities	230,000
Indirect labor	80,000
Factory depreciation	500,000
Operating expenses	630,000

	A.	$1,710,000.
	B.	$2,340,000.
	C.	$2,400,000.
	D.	$3,030,000.

QUESTION 18

Assuming that the total manufacturing costs are $2,400,000, compute the cost of goods manufactured using the information below.

Work in process, January 1	30,000
Work in process, December 31	20,000
Finished goods, January 1	60,000
Finished goods, December 31	48,000
Direct labor	690,000
Factory utilities	230,000
Indirect labor	80,000
Factory depreciation	500,000
Operating expenses	630,000

	A.	$2,380,000.
	B.	$2,470,000.
	C.	$2,410,000.
	D.	$3,040,000.

QUESTION 19

Assuming that the cost of goods manufactured is $2,760,000 compute the cost of goods sold using the following information.

Work in process, January 1	30,000
Work in process, December 31	20,000
Finished goods, January 1	60,000
Finished goods, December 31	50,000
Direct labor	690,000
Factory utilities	230,000
Indirect labor	80,000
Factory depreciation	500,000
Operating expenses	630,000

	A.	$2,750,000.
	B.	$2,700,000.
	C.	$3,400,000.
	D.	$2,770,000.

QUESTION 20

A performance-measurement approach that uses both financial and nonfinancial measures to evaluate a company's operations in an integrated fashion is called

	A.	Activity-based costing system
	B.	Balanced scorecard system
	C.	Value chain system
	D.	Total quality management system