71 Free Test Bank for Managerial Accounting 1st Edition by Oliver 

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Which of the following are period costs?

•  A. Current assets on the balance sheet
•  B. Costs incurred and expensed during the accounting period
•  C. Costs related to the manufacture of products
•  D. Current liabilities on the balance sheet

A merchandiser's purchases are equivalent to what for a manufacturer?

•  A. Materials inventory
•  B. Cost of goods manufactured
•  C. Work in process inventory
•  D. Cost of goods sold

Period costs do NOT include which of the following?

•  A. Sales commissions
•  B. Factory janitorial costs
•  C. Insurance on delivery vehicles
•  D. Advertising costs

Which of the following types of accounting is designed to meet the needs of decision-makers inside a company?

•  A. Financial accounting
•  B. Tax accounting
•  C. Management accounting
•  D. Auditing

Which of the following statements is incorrect?

•  A. The primary users of management accounting are the company’s managers.
•  B. Management accounting information is used to help managers plan and control their operations.
•  C. Management accounting information does not require an external audit.
•  D. Management accounting’s financial reports are restricted by generally accepted accounting principles.

Which statement is correct?

•  A. Management accounting uses the cash basis and financial accounting uses the accrual basis to record transactions.
•  B. Management accounting uses the cash basis to record transactions.
•  C. Financial accounting uses the cash basis to record transactions.
•  D. Both management accounting and financial accounting use the accrual basis to record transactions.

Which of the following is an example of direct labor?

•  A. Wages of assembly line personnel
•  B. Salary of vice president of production
•  C. Wages of factory security
•  D. Salary of production manager

Wright Company reports production costs for 2009 as follows: Direct materials used $375,000; Direct labor incurred $250,000; Manufacturing overhead incurred $400,000; Operating expenses $145,000. How much are Wright Company's period costs for 2009?

•  A. $250,000
•  B. $575,000
•  C. $145,000
•  D. $375,000

Goods that are partially completed by a manufacturer are referred to as:

•  A. Materials inventory.
•  B. Finished goods inventory.
•  C. Merchandise inventory.
•  D. Work in process inventory.

Which of the following is NOT a part of manufacturing overhead?

•  A. Indirect materials
•  B. Indirect labor
•  C. Factory insurance
•  D. Depreciation on delivery vehicles

A merchandising company’s:

•  A. expenses include both period costs and product costs.
•  B. expenses include only product costs.
•  C. expenses include only period costs.
•  D. income statement doesn’t include gross margin.

Which of the following best defines direct materials?

•  A. Used to determine total inventoriable product costs
•  B. Cannot be separately and conveniently traced through the manufacturing process to finished goods
•  C. Are not part of the finished product
•  D. Used to determine total manufacturing overhead

Inventory accounts for a manufacturer include which of the following?

•  A. Materials, work in process, and finished goods
•  B. Work in process, direct labor, and finished goods
•  C. Merchandise, materials, and finished goods
•  D. Work in process, materials, and manufacturing overhead

The following information pertains to Bright Toy Company's operating activities for 2009. The company sells light box toys and sold 10,000 units in 2009: Purchases $ 126,000; Selling and Administrative Expenses: 90,000; Merchandise inventory, 1/1/2009: 14,000; Merchandise inventory, 12/31/2009: 10,000; Sales Revenue 250,000. What is the cost of goods sold for 2009?

•  A. $104,000
•  B. $124,000
•  C. $130,000
•  D. $140,000

The following information pertains to Bright Toy Company's operating activities for 2009. The company sells light box toys and sold 10,000 units in 2009. Purchases: $ 126,000; Selling and Administrative Expenses: 90,000; Merchandise inventory, 1/1/2009: 14,000; Merchandise inventory, 12/31/2009: 10,000; Sales Revenue 250,000. What is the cost of goods available for sale for 2009?

•  A. $140,000
•  B. $126,000
•  C. $104,000
•  D. $130,000

Which of the following is NOT a product cost?

•  A. Indirect labor
•  B. Factory overhead
•  C. Indirect materials
•  D. Depreciation of corporate headquarters

Which of the following is an inventory account for a merchandise company?

•  A. Work in process inventory
•  B. Manufacturing overhead inventory
•  C. Merchandise inventory
•  D. Finished goods inventory

Which of the following describes a system in which suppliers deliver materials at the time they are needed and finished units are completed when customer orders need to be filled?

•  A. Supply chain management
•  B. Just-in-time (JIT.
•  C. Enterprise resource planning
•  D. Total quality management

Which of the following statements is incorrect?

•  A. Management uses accounting information to determine the cost of products and services.
•  B. Management uses accounting information to plan and control business operations.
•  C. Management uses accounting information to report the company's financial position and results of operations to external parties.
•  D. Financial accounting is more relevant to use for internal decision making purposes than is management accounting.

What is the name given to software systems that can integrate all of a company's worldwide functions, departments and data into a single system?

•  A. All in One Software
•  B. Enterprise Resource Planning
•  C. Total Integrated Software
•  D. Just-in-time

Which of the following is a philosophy of providing customers with superior products and services?

•  A. Just-in-time (JIT.
•  B. ERP
•  C. Supply chain management
•  D. Total quality management

Which of the following statements about managerial accounting is correct?

•  A. Managerial accounting reports are audited annually by Certified Public Accountants.
•  B. Managerial accounting reports help investors make decisions.
•  C. Managerial accounting reports provide detailed information on parts of a company.
•  D. Managerial accounting reports must follow Generally Accepted Accounting principles (GAAP..

Which of the following could be found on the income statement of a service company?

•  A. Rent expense
•  B. Cost of goods manufactured
•  C. Cost of goods sold
•  D. Manufacturing overhead

The following information pertains to Bright Toy Company's operating activities for 2009. The company sells light box toys and sold 10,000 units in 2009. Purchases $ 126,000; Selling and Administrative Expenses 90,000; Merchandise inventory, 1/1/2009 14,000; Merchandise inventory, 12/31/2009 10,000; Sales Revenue 250,000. What is the profit margin percentage?

•  A. 12%
•  B. 56%
•  C. 100%
•  D. 36%

Which of the following is NOT an objective of management accounting?

•  A. To provide information to business managers to assist them in planning for their business
•  B. To provide information to business managers to assist them in controlling their business
•  C. To provide information to shareholders to assist them with their investment decisions
•  D. To assist business managers with respect to providing a return to the owners of the business

Which of the following statements about financial accounting is correct?

•  A. Financial accounting helps investors make decisions.
•  B. Financial accounting reports do not influence investor behavior.
•  C. Financial provides detailed reports on parts of the company.
•  D. Financial accounting provides help in planning and controlling operations.

The following information pertains to Bright Toy Company's operating activities for 2009. The company sells light box toys and sold 10,000 units in 2009. Purchases $ 126,000; Selling and Administrative Expenses 90,000; Merchandise inventory, 1/1/2009 14,000; Merchandise inventory, 12/31/2009 10,000; Sales Revenue 250,000. What is the gross profit for 2009?

•  A. $120,000
•  B. $130,000
•  C. $140,000
•  D. $136,000

The following information pertains to Bright Toy Company's operating activities for 2009. The company sells light box toys and sold 10,000 units in 2009: Purchases $ 126,000; Selling and Administrative Expenses 90,000; Merchandise inventory, 1/1/2009 14,000; Merchandise inventory, 12/31/2009 10,000; Sales Revenue 250,000; What is the cost per light box sold in 2009?

•  A. $13.00
•  B. $12.40
•  C. $14.00
•  D. $10.40

Which of the following reports must be audited by certified public accountants?

•  A. Annual financial reports
•  B. Federal tax returns
•  C. State tax returns
•  D. Management accounting reports

Which of the following is a characteristic of a service company?

•  A. It transforms raw materials into finished goods.
•  B. It makes a product.
•  C. It does not have tangible products intended for sale.
•  D. It has a single category of inventory.

A service company’s:

•  A. expenses are all period costs.
•  B. expenses are all product costs.
•  C. income statement includes gross margin.
•  D. balance sheet includes finished goods inventory.

Which of the following costs would appear on the income statements for both a merchandiser and a manufacturer?

•  A. Direct labor incurred
•  B. Cost of goods manufactured
•  C. Direct materials used
•  D. Operating expenses

Which of the following statements does NOT describe today’s business environment?

•  A.The business environment is shifting toward a service economy.
•  B. Global competition requires businesses to adjust their business strategies.
•  C. E-commerce has allowed business managers the opportunity to slow down the their manufacturing and delivery times.
•  D. Enterprise resource planning systems have emerged to assist business manager with respect to integrating their worldwide functions.

What is total quality management?

•  A. A philosophy of supplying customers with superior products and services
•  B. An exchange of information with suppliers and customers to create efficient and effective processes
•  C. A software system that integrates a company's functions, departments and data into a single system
•  D. A system in which a company produces what it needs when it needs it

Manufacturing overhead includes which of the following?

•  A. Indirect labor and indirect materials
•  B. Indirect materials and direct materials
•  C. Direct materials and direct labor
•  D. Factory rent and direct labor

Which of the following statements is correct?

•  A. A decrease in finished goods means that cost of goods manufactured is greater than cost of goods sold.
•  B. A decrease in work in process means that cost of goods sold is greater than cost of goods manufactured.
•  C. A decrease in raw materials implies that the cost of materials used in production exceeds the cost of the materials purchased.
•  D. A decrease in work in process means that cost of goods manufactured was less than the manufacturing costs incurred.

The following information pertains to Bright Toy Company's operating activities for 2009. The company sells light box toys and sold 10,000 units in 2009: Purchases $ 126,000; Selling and Administrative Expenses 90,000; Merchandise inventory, 1/1/2009 14,000; Merchandise inventory, 12/31/2009 10,000; Sales Revenue 250,000. What is the operating income for 2009?

•  A. $250,000
•  B. $140,000
•  C. $30,000
•  D. $90,000