Accounting Exam 3

(!!!) Finished goods inventory on a pro-forma balance sheet would require that the number of units of budgeted ending inventory be identified from the: A. production budget B. sales budget C.cash budget D. direct materials purchases budget E. none of the above are correct

*A. production budget*

(!!!) Which of the following is not a characteristic of managerial accounting? A. focus on individual segments of the organization B. not regulated C. reasonable accuracy desired, but close counts D. focus on historical data E. all of the above are characteristics of managerial accounting

*D. focus on historical data*

Which of the following is not a product cost? A. administrative office supplies B. manufacturing equipment maintenance supplies C. freight costs associated with raw material purchases D. both (a) and (c) are correct E. all of the above are product costs

A. administrative office supplies

The cost of direct materials: A. is constant per unit but varies in total B. varies per unit (due to quantity discounts offered by vendors) and in total C. varies per unit but is constant in total D. is constant per unit and in total E. none of the above are correct

A. is constant per unit but varies in total

Failure to eliminate (i.e., close) an underapplication of manufacturing overhead will result in an: A. overstatement of net income B. overstatement of cost of goods sold C. understatement of net income D. both (a) and (b) are correct E. both (b) and (c) are correct

A. overstatement of net income

Which of the following statements is correct in describing manufacturing overhead costs? A. manufacturing overhead when combined with direct materials forms the conversion costs B. manufacturing overhead consists of all manufacturing costs except for prime costs C. manufacturing overhead is a period cost D. manufacturing overhead when combined with direct labor forms the prime costs E. more than one of the above statements is correct

B. manufacturing overhead consists of all manufacturing costs except for prime costs

A credit balance in the manufacturing overhead account means that A. actual manufacturing overhead costs exceeded applications to work in process B. actual manufacturing overhead costs must have been less than budgeted C. applied manufacturing overhead exceeded actual manufacturing overhead costs for the period D. both (a) and (b) are correct E. both (b) and (c) are correct

C. applied manufacturing overhead exceeded actual manufacturing overhead costs for the period

Which of the following costs would most likely be a fixed cost? A. direct materials cost B. direct labor cost C. building rental cost D. both (a) and (c) are correct E. all of the above are examples of fixed costs

C. building rental cost

An example of a manufacturing overhead cost would be: A. direct material cost B. factory production line wage costs C. indirect material cost D. utility costs for administrative offices E. both (c) and (d) are correct

C. indirect material cost

Variable costs: A. vary per unit and in total within the relevant range B. vary per unit and are fixed in total within the relevant range C. vary in total and are fixed per unit within the relevant range D. are fixed per unit and are fixed in total within the relevant range E. none of the above are correct

C. vary in total and are fixed per unit within the relevant range

Period costs include all: A. selling costs B. administrative costs C. production costs D. both (a) and (b) are correct E. all of the above are period costs as long as they are incurred in the period for which the financial statements are prepared

D. both (a) and (b) are correct

Factory utility costs should be included as part of A. period costs B. direct labor costs C. direct material costs D. indirect material costs E. none of the above are correct

E. none of the above are correct (should be product costs)