Select the correct answer:

1 The value chain of a manufacturer would tend to include activities related to:

A) manufacturing.

B) product design.

C) all of the answers are correct.

D) research and development.

E) marketing.

2 Harrison Industries began July with a finished-goods inventory of $48,000. The finished-goods inventory at the end of July was $56,000 and the cost of goods sold during the month was $125,000. The cost of goods manufactured during July was:

A) $104,000.

B) $125,000.

C) $133,000.

D) None of the answers is correct.

E) $117,000.

3 Shu Corporation recently computed total product costs of $567,000 and total period costs of $420,000, excluding $35,000 of sales commissions that were overlooked by the company's administrative assistant. On the basis of this information, Shu's income statement should reveal operating expenses of:

A)$567,000.

B) $420,000.

C) $602,000.

D) $35,000.

E) $455,000.

4 Farrina Manufacturing uses a predetermined overhead application rate of $8 per direct labor hour. A review of the company's accounting records for the year just ended discovered the following:

Underapplied manufacturing overhead: $7,200

Actual manufacturing overhead: $392,000

Budgeted labor hours: 50,000

Simone's actual labor hours worked totaled:

A) 48,100.

B) 49,900.

C) 49,100.

D) cannot be determined based on the information presented.

E) 50,900.

5 Which type of production process is likely used by a paint manufacturer to produce paint?

A) Batch.

B) Job Shop.

C) Continuous Flow.

D) Assembly.

E) Direct assembly.

6 Under- or overapplied manufacturing overhead at year-end is most commonly:

A) charged or credited to a special loss account.

B) charged or credited to Cost of Goods Sold.

C) prorated among Work-in-Process Inventory, Finished-Goods Inventory, and Cost of Goods Sold.

D) ignored because there is no effect on the Cash account.

E) charged or credited to Work-in-Process Inventory.

7 What would the cost of fire insurance for a manufacturing plant generally be categorized as?

A) Prime cost.

B) Direct material cost.

C) Product cost.

D) Direct labor cost.

E) Period cost.

8 Which of the following is correct regarding the changing role of managerial accounting?

A) Forward-looking goals have transformed managerial accountants into business advisors

B) The managerial accountant has been transformed into a financial historian in progressive companies.

C) Managerial accountants rarely have the title of analyst or take on leadership roles.

D) The managerial accountant is crunching more numbers than ever before in leading-edge companies.

E) Managerial accountants are typically isolated in separate departments.

9 The estimates used to calculate the predetermined overhead rate will virtually always:

A)result in underapplied overhead that is closed to Cost of Goods Sold if it is immaterial in amount.

B) result in overapplied overhead that is closed to Cost of Goods Sold if it is immaterial in amount.

C) result in either underapplied or overapplied overhead that is closed to Cost of Goods Sold if it is immaterial in amount.

D) prove to be correct.

E) result in a year-end balance of zero in the Manufacturing Overhead account.

10 Given the following information, what is the cost of unused capacity? Cost of material supplied is $8,600; Cost of material used is $8,000; Cost of material used per shelf is $8; Cost of material supplied per shelf is $8.60.

A) $0.60.

B) $1,000.

C) There is no unused capacity.

D) $600.

E) $6,000.

11 Conversion costs are:

A)prime costs.

B) direct material, direct labor, and manufacturing overhead.

C) direct material and direct labor.

D) period costs.

E) direct labor and manufacturing overhead.

12 Which of the following isnota drawback of actual costing?

A) Actual overhead costs may only be available after a production period has passed.

B) Costs avoid the estimation associated with predetermined overhead rates.

C) Costs may not be evenly spread throughout the year due to large payments for overhead costs.

D) All of these are drawbacks of actual costing.

E) Costs are subject to cyclicality.

13 Which of the following statements is true?

A)Product costs affect only the balance sheet.

B) Product costs eventually affect both the balance sheet and the income statement.

C) Period costs affect only the balance sheet.

D) Neither product costs nor period costs affect the Statement of Retained Earnings. This can also be a true statement if the period costs were prepaid (i.e., prepaid advertising, depreciation).

E) Product costs affect only the income statement.

14 Gonzales Company has developed an integrated system that coordinates the flow of all goods, services, and information into and out of the organization, working with raw material vendors as well as customers to improve service and reduce costs. The firm is said to be using:

A)participative management.

B) management by objectives (MBO).

C) strategic cost management.

D) top-down management.

E) supply chain management.

15 Which of the following manufacturers would most likely use job-order costing?

A) Chemical manufacturers.

B) Gasoline refiners.

C) Custom-furniture manufacturers.

D) Microchip processors.

E) Fertilizer manufacturers.

16 Guaranteed Appliance Co. produces washers and dryers in an assembly-line process. Labor costs incurred during a recent period were: corporate executives, $500,000; assembly-line workers, $180,000; security guards, $45,000; and plant supervisor, $110,000. The total of Guaranteed's direct labor cost was:

A) $110,000.

B) $235,000.

C) $155,000.

D) $180,000.

E) $735,000.

17 How should a company that manufactures automobiles classify its partially completed vehicles?

A)Cost of goods manufactured.

B) Supplies.

C) Work-in-process inventory.

D) Finished goods inventory.

E) Raw materials inventory.

18 When selecting a volume-based cost driver, the goal is to:

A) eliminate complexity by using a plantwide overhead rate for all of a firm's products.

B) choose an input that varies in a pattern that is most similar to the pattern with which overhead costs vary.

C) choose a period where a cost driver is at a low level so that overhead costs will be at a low level.

D) None of these are goals when selecting a volume-based cost driver.

E) choose labor hours for a computer-integrated manufacturing processes.

19 Metalica Company applies overhead based on machine hours. At the beginning of 20x1, the company estimated that manufacturing overhead would be $500,000, and machine hours would total 20,000. By 20x1 year-end, actual overhead totaled $525,000, and actual machine hours were 25,000. On the basis of this information, the 20x1 predetermined overhead rate was:

A) $20 per machine hour.

B) $25 per machine hour.

C) $0.04 per machine hour.

D) $0.05 per machine hour.

E) $21 per machine hour.

20 Which of the following isnotan element of competency?

A)To prepare clear reports after an analysis of relevant and reliable information.

B) To refrain from engaging in an activity that would discredit the accounting profession.

C) To perform duties in accordance with relevant technical standards.

D) To develop appropriate knowledge about a particular subject.

E) To perform duties in accordance with relevant laws.