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Trang 1168 Test Bank for Managerial Accounting Tools for
Business Decision Making 6th Edition
True False Questions Free Text Questions
-Mutiple Choice Questions - Page 1
Managerial accounting does not encompass
1 a.calculating product cost.
2 b.calculating earnings per share.
3 c.determining cost behavior.
4 d.profit planning.
The work of factory employees that can be physically and directly associated with converting raw materials into finished goods is
Trang 2A manufacturing company reports cost of goods manufactured
as a(n)
1 a.current asset on the balance sheet.
2 b.administrative expense on the income statement.
3 c.component in the calculation of cost of goods sold on the income statement.
4 d.component of the raw materials inventory on the balance sheet.
Financial statements for external users can be described as
1 a.the product must be finished and in stock.
2 b.the product must be expensed based on its percentage-of-completion.
3 c.the product to which they attach must be sold.
4 d.all accounts payable must be settled.
Product costs consist of
1 a.direct materials and direct labor only.
2 b.direct materials, direct labor, and manufacturing overhead.
3 c.selling and administrative expenses.
4 d.period costs.
The major reporting standard for presenting managerial
accounting information is
1 a.relevance.
Trang 32 b.generally accepted accounting principles.
3 c.the cost principle.
4 d.the current tax law.
Which one of the following is not a direct material?
1 a.A tire used for a lawn mower
2 b.Plastic used in the covered case for a home PC
3 c.Steel used in the manufacturing of steel-radial tires
4 d.Lubricant for a ball-bearing joint for a large crane
The managerial function of controlling
1 a.is performed only by the controller of a company.
2 b.is only applicable when the company sustains a loss.
3 c.is concerned mainly with operating a manufacturing segment.
4 d.includes performance evaluation by management.
Directing includes
1 a.providing a framework for management to have criteria to terminate employees when needed.
2 b.running a department under quality control standards universally accepted.
3 c.coordinating a company's diverse activities and human resources to produce a smooth-running operation.
4 d.developing a complex performance ranking system to give certain high performers good raises.
As inventoriable costs expire, they become
1 a.selling expenses.
2 b.gross profit.
3 c.cost of goods sold.
4 d.sales revenue.
Trang 4Managerial accounting information is generally prepared for
Which one of the following represents a period cost?
1 a.The VP of Sales' salary and benefits
2 b.Overhead allocated to the manufacturing operations
3 c.Labor costs associated with quality control
4 d.Fringe benefits associated with factory workers
Which one of the following is not considered as material costs?
1 a.Partially completed motor engines for a motorcycle plant
2 b.Bolts used in manufacturing the compressor of an engine
3 c.Rivets for the wings of a new commercial jet aircraft
4 d.Lumber used to build tables
Manufacturing costs that cannot be classified as either direct materials or direct labor are known as
1 a.period costs.
2 b.nonmanufacturing costs.
3 c.selling and administrative expenses.
4 d.manufacturing overhead.
Trang 5For the work of factory employees to be considered as direct labor, the work must be conveniently and
1 a.materially associated with raw materials conversion.
2 b.periodically associated with raw materials conversion.
3 c.physically associated with raw materials conversion.
4 d.promptly associated with raw materials conversion.
The reporting standard for external financial reports is
1 a.industry-specific.
2 b.company-specific.
3 c.generally accepted accounting principles.
4 d.department-specific.
Which of the following is not a manufacturing cost category?
1 a.Cost of goods sold
Trang 64 d.Indirect manufacturing costs
What activities and responsibilities are not associated with management's functions?
1 a.Planning
2 b.Accountability
3 c.Controlling
4 d.Directing
Cotter pins and lubricants used irregularly in a production
process are classified as
Trang 7A distinguishing feature of managerial accounting is
1 a.external users.
2 b.general-purpose reports.
3 c.very detailed reports.
4 d.quarterly and annual reports.
Sales commissions are classified as
Managerial accounting information
1 a.pertains to the entity as a whole and is highly aggregated.
2 b.pertains to subunits of the entity and may be very detailed.
3 c.is prepared only once a year.
4 d.is constrained by the requirements of generally accepted accounting principles.
Trang 8In determining whether planned goals are being met, a manager
is performing the function of
1 a.planning.
2 b.follow-up.
3 c.directing.
4 d.controlling.
Planning is a function that involves
1 a.hiring the right people for a particular job.
2 b.coordinating the accounting information system.
3 c.setting goals and objectives for an entity.
4 d.analyzing financial statements.
The wages of a timekeeper in the factory would be classified as
1 a.a period cost.
2 b.direct labor.
3 c.indirect labor.
4 d.compliance costs.
Management accountants would not
1 a.assist in budget planning.
2 b.prepare reports primarily for external users.
3 c.determine cost behavior.
4 d.be concerned with the impact of cost and volume on profits.
Which one of the following costs would not be inventoriable?
Trang 9Both direct materials and indirect materials are
1 a.raw materials.
2 b.manufacturing overhead.
3 c.merchandise inventory.
4 d.sold directly to customers by a manufacturing company.
Because of automation, which component of product cost is declining?
1 a.Beginning FG inventory + cost of goods purchased – ending FG inventory.
2 b.Ending FG inventory – cost of goods manufactured + beginning FG inventory.
3 c.Beginning FG inventory – cost of goods manufactured – ending FG inventory.
4 d.Beginning FG inventory + cost of goods manufactured – ending FG inventory.
Which of the following statements about internal reports is not true?
1 a.The content of internal reports may extend beyond the double-entry accounting system.
2 b.Internal reports may show all amounts at market values.
3 c.Internal reports may discuss prospective events.
4 d.Most internal reports are summarized rather than detailed.
Trang 10Which of the following are period costs?
1 a.Raw materials
2 b.Direct materials and direct labor
3 c.Direct labor and manufacturing overhead
Direct materials and direct labor of a company total $8,000,000
If manufacturing overhead is $4,000,000, what is direct labor cost?
1 a.$4,000,000
2 b.$8,000,000
3 c.$0
4 d.Cannot be determined from the information provided
Manufacturing costs include
1 a.direct materials and direct labor only.
2 b.direct materials and manufacturing overhead only.
3 c.direct labor and manufacturing overhead only.
4 d.direct materials, direct labor, and manufacturing overhead.
Internal reports must be communicated
1 a.daily.
2 b.monthly.
3 c.annually.
Trang 114 d Managerial accounting applies to all types of firms.
Which of the following is not classified as direct labor?
1 a.Bottlers of beer in a brewery
2 b.Copy machine operators at a copy shop
3 c.Wages of supervisors
4 d.Bakers in a bakery
As current technology changes manufacturing processes, it is likely that direct
1 a.labor will increase.
2 b.labor will decrease.
3 c.materials will increase.
4 d.materials will decrease.
Trang 12The management function that requires managers to look ahead and establish objectives is
In an analogous sense, external user is to internal user as
generally accepted accounting principles are to
Trang 13Which one of the following is an example of a period cost?
1 a.A change in benefits for the union workers who work in the New York plant of a Fortune 1000 manufacturer
2 b.Workers' compensation insurance on factory workers' wages allocated to the factory
3 c.A box cost associated with computers
4 d.A manager's salary for work that is done in the corporate head office
Managerial accounting reports can be described as
1 a.general-purpose.
2 b.macro-reports.
3 c.special-purpose.
4 d.classified financial statements.
Which one of the following would not be classified as
Trang 14Dolan Company's accounting records reflect the following
inventories: Dec 31, 2013Dec 31, 2012; Raw materials
inventory$310,000$260,000; Work in process
inventory300,000160,000; Finished goods
inventory190,000150,000 During 2013, $600,000 of raw
materials were purchased, direct labor costs amounted to
$500,000, and manufacturing overhead incurred was $480,000 If Dolan Company's cost of goods manufactured for 2013
amounted to $1,390,000, its cost of goods sold for the year is
1 a.$1,500,000.
2 b.$1,250,000.
3 c.$1,350,000.
4 d.$1,430,000.
Benson Inc.'s accounting records reflect the following
inventories: Dec 31, 2012Dec 31, 2013; Raw materials
inventory$ 80,000$ 64,000; Work in process
inventory104,000116,000; Finished goods
inventory100,00092,000 During 2013, Benson purchased
$1,060,000 of raw materials, incurred direct labor costs of
$200,000, and incurred manufacturing overhead totaling
$128,000 How much is total manufacturing costs incurred
during 2013 for Benson?
1 a.$1,392,000
2 b.$1,404,000
3 c.$1,388,000
4 d.$1,400,000
Trang 15Dolan Company's accounting records reflect the following inventories:Dec 31, 2013Dec 31, 2012; Raw materials
inventory$310,000$260,000; Work in process
inventory300,000160,000; Finished goods
inventory190,000150,000 During 2013, $600,000 of raw
materials were purchased, direct labor costs amounted to
$500,000, and manufacturing overhead incurred was $480,000 The total raw materials available for use during 2013 for Dolan Company is
1 a.$910,000.
2 b.$460,000.
3 c.$550,000.
4 d.$860,000.
The subtotal, "Cost of goods manufactured" appears on
1 a.a merchandising company's income statement.
2 b.a manufacturing company's income statement.
3 c.both a manufacturing and a merchandising company's income statement.
4 d.neither a merchandising nor a manufacturing company's income statement.
Walker Company reported the following year-end information: Beginning work in process inventory $ 46,000; Beginning raw materials inventory 24,000; Ending work in process inventory 50,000; Ending raw materials inventory 20,000; Raw materials purchased 830,000; Direct labor 240,000; Manufacturing
overhead100,000 How much is Walker’s cost of goods
manufactured for the year?
1 a.$834,000
2 b.$1,174,000
Trang 163 c.$1,170,000
4 d.$1,178,000
What is work in process inventory generally described as?
1 a.Costs applicable to units that have been started in production but are only partially completed
2 b.Costs associated with the end stage of manufacturing that are almost always
complete and ready for customers
3 c.Costs strictly associated with direct labor
4 d.Beginning stage production costs associated with labor costs dealing with bringing in raw materials from the shipping docks
Kushman Combines, Inc has $20,000 of ending finished goods inventory as of December 31, 2013 If beginning finished goods inventory was $10,000 and cost of goods sold was $50,000, how much would Kushman report for cost of goods manufactured?
1 a.$70,000
2 b.$10,000
3 c.$60,000
4 d.$40,000
Cost of goods sold
1 a.only appears on merchandising companies' income statements.
2 b.only appears on manufacturing companies' income statements.
3 c.appears on both manufacturing and merchandising companies' income statements.
4 d.is calculated exactly the same for merchandising and manufacturing companies.
Trang 17Ogleby Inc.'s accounting records reflect the following
inventories: Dec 31, 2012Dec 31, 2013; Raw materials
inventory$120,000$ 96,000; Work in process inventory156,000 174,000Finished goods inventory150,000 138,000 During 2013, Ogleby purchased $840,000 of raw materials, incurred direct labor costs of $150,000, and incurred manufacturing overhead totaling $192,000 How much is total manufacturing costs
incurred during 2013 for Ogleby?
1 a.$1,188,000
2 b.$1,206,000
3 c.$1,182,000
4 d.$1,200,000
Benson Inc.'s accounting records reflect the following
inventories: Dec 31, 2012Dec 31, 2013; Raw materials
inventory$ 80,000$ 64,000; Work in process inventory 104,000 116,000; Finished goods inventory100,000 92,000 During 2013, Benson purchased $1,160,000 of raw materials, incurred direct labor costs of $200,000, and incurred manufacturing overhead totaling $128,000 Assume Benson’s cost of goods
manufactured for 2013 amounted to $1,360,000 How much would it report as cost of goods sold for the year
1 a.$1,368,000
2 b.$1,400,000
3 c.$1,460,000
4 d.$1,352,000
Trang 18Laflin Company reported the following year-end information: Beginning work in process inventory $1,080,000; Beginning raw materials inventory300,000; Ending work in process
inventory900,000; Ending raw materials inventory480,000; Raw materials purchased960,000; Direct labor800,000;
Manufacturing overhead720,000 Laflin Company's cost of
goods manufactured for the year is
1 a.ending inventory in a merchandising company.
2 b.beginning inventory in a merchandising company.
3 c.cost of goods available for sale in a merchandising company.
4 d.cost of goods purchased in a merchandising company.
If the amount of "Cost of goods manufactured" during a period exceeds the amount of "Total manufacturing costs" for the period, then
1 a.ending work in process inventory is greater than or equal to the amount of the beginning work in process inventory.
2 b.ending work in process is greater than the amount of the beginning work in process inventory.
3 c.ending work in process is equal to the cost of goods manufactured.
4 d.ending work in process is less than the amount of the beginning work in process inventory.
Trang 19Dolan Company's accounting records reflect the following
inventories: Dec 31, 2013Dec 31, 2012; Raw materials
inventory$310,000$260,000; Work in process
inventory300,000160,000; Finished goods
inventory190,000150,000 During 2013, $600,000 of raw
materials were purchased, direct labor costs amounted to
$500,000, and manufacturing overhead incurred was $480,000 Dolan Company's total manufacturing costs incurred in 2013 amounted to
2 b.appears in the manufacturing overhead section.
3 c.is not listed because it is not a product cost.
4 d.is not an inventoriable cost.
Cost of goods manufactured is calculated as follows:
1 a.Beginning WIP + direct materials used + direct labor + manufacturing overhead + ending WIP.
2 b.Direct materials used + direct labor + manufacturing overhead – beginning WIP + ending WIP.
3 c.Beginning WIP + direct materials used + direct labor + manufacturing overhead – ending WIP.
Trang 204 d.Direct materials used + direct labor + manufacturing overhead – ending WIP – beginning WIP.
Worth Company reported the following year-end information: beginning work in process inventory, $180,000; cost of goods manufactured, $816,000; beginning finished goods inventory,
$252,000; ending work in process inventory, $220,000; and ending finished goods inventory, $264,000 Worth Company's cost of goods sold for the year is
1 a.addition to raw materials purchases.
2 b.addition to raw materials available for use.
3 c.subtraction from raw materials available for use.
4 d.subtraction from raw materials purchases.
Trang 21Benson Inc.'s accounting records reflect the following
inventories: Dec 31, 2012Dec 31, 2013; Raw materials
inventory$ 80,000$ 64,000; Work in process
inventory104,000116,000; Finished goods
inventory100,00092,000 During 2013, Benson purchased
$1,160,000 of raw materials, incurred direct labor costs of
$200,000, and incurred manufacturing overhead totaling
$128,000 How much raw materials were transferred to
production during 2013 for Benson?
Mutiple Choice Questions - Page 3
If the total manufacturing costs are greater than the cost of goods manufactured, which of the following is correct?
1 a.Work in Process Inventory has increased.
2 b.Finished Goods Inventory has increased.
3 c.Work in Process Inventory has decreased.
4 d.Finished Goods Inventory has decreased.
The inventory accounts that show the cost of completed goods
on hand and the costs applicable to production that is only partially completed are, respectively
1 a.Work in Process Inventory and Raw Materials Inventory.
Trang 222 b.Finished Goods Inventory and Raw Materials Inventory.
3 c.Finished Goods Inventory and Work in Process Inventory.
4 d.Raw Materials Inventory and Work in Process Inventory.
For a manufacturing firm, cost of goods available for sale is computed by adding the beginning finished goods inventory to
1 a.cost of goods purchased.
2 b.cost of goods manufactured.
3 c.net purchases.
4 d.total manufacturing costs.
Using the following information, compute the cost of direct materials used.Raw materials inventory, January 1 $30,000; Raw materials inventory, December 31 60,000; Work in process,
January 1 27,000; Work in process, December 31 18,000;
Finished goods, January 1 60,000; Finished goods, December
31 48,000; Raw materials purchases 1,500,000; Direct labor
690,000; Factory utilities 225,000; Indirect labor 75,000; Factory depreciation 500,000; Operating expenses 630,000
1 a.$1,590,000.
2 b.$1,530,000.
3 c.$1,500,000.
4 d.$1,470,000.
Trang 23Edmiston Company reported the following year-end
information: beginning work in process inventory, $80,000; cost
of goods manufactured, $780,000; beginning finished goods inventory, $50,000; ending work in process inventory, $70,000; and ending finished goods inventory, $40,000 How much is Edmiston’s cost of goods sold for the year?
1 a.Finished Goods Inventory has increased.
2 b.Work in Process Inventory has increased.
3 c.Finished Goods Inventory has decreased.
4 d.Work in Process Inventory has decreased.
Given the following data for Mehring Company, compute (A) total manufacturing costs and (B) cost of goods
manufactured:Direct materials used$230,000Beginning work in process$30,000; Direct labor 150,000Ending work in process 15,000; Manufacturing overhead 225,000Beginning finished goods 38,000; Operating expenses 263,000Ending finished