ACC 213 Chapter 1
In a small manufacturing facility, one welder is needed for every 200 hours of machine-hours or fewer in a month. The welder is paid a monthly salary of $2,500. If the total monthly requirement is 1,300 machine-hours, the total salaried employee expense is _________
$17,500
Audio Corporation purchased $20,000 of DVDs during the current year. The company had DVD inventory of $15,000 at the beginning of the year. An end of the year audit revealed that the company had DVD inventory of $10,000. The amount that would be reported as cost of goods sold in the income statement for the current year is ________
$25,000
Davidson Company has sales of $100,000, variable cost of goods sold of $40,000, variable selling expenses of $15,000, variable administrative expenses of $5,000, fixed selling expenses of $7,000, and fixed administrative expenses of $9,000. What is Davidson's contribution margin?
$40,000
Cyber Devices manufactures PCTV products that enable people to watch television content on their computers. It sells its product to retailers for $50. A tuner component that goes into each of these devices costs $5 to acquire. The total variable cost at an activity level of 1,000 units equals _______
$5,000
Which of the following statements about opportunity costs is not correct? - An opportunity cost is the potential benefit that is given up when one alternative is selected over another - An opportunity cost cannot be changed by any decision made now or in the future - Opportunity costs are not usually found in accounting records - Opportunity costs are costs that must be explicitly considered in every decision a manager makes
An opportunity cost cannot be changed by any decision made now or in the future
A ___________ is a cost that is incurred to support a number of cost objects but cannot be traced to them individually
Common cost
Cost of X-ray film used in the old machine
Differential cost
Cost of electricity to run the X-ray machines
Differential cost
Cost of the new color laser printer
Differential cost
The cost of maintaining the old machine
Differential cost
Adventure Holiday sells thousands of tour packages each month through its various branches. A branch manager's salary would be a(n) _________ of the branch
Direct cost
Cost: Lab tests by outside contractor Cost Object: A particular department
Direct cost
Cost: Lab tests by outside contractor Cost Object: A particular patient
Direct cost
Cost: Prescription drugs Cost Object: A particular patient
Direct cost
Cost: The salary of the head of pediatrics Cost Object: The pediatric department
Direct cost
Cost: Wages of pediatric nurses Cost Object: The pediatric department
Direct cost
Which of the following is common to both prime cost and conversion cost? - Manufacturing overhead - Direct materials - Nonmanufacturing costs - Direct labor
Direct labor
The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed below are some of the costs that the company incurs. For each cost, indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, selling, or an administrative cost. The cost of a hard drive installed in a computer.
Direct materials cost
Emphasizes financial consequences of past activities
Financial accounting
Adventure Holiday sells thousands of tour packages each month through its various branches. A branch manager's salary would be a(n) _________ of selling a tour package
Indirect cost
Cost: Heating the hospital Cost Object: The pediatric department
Indirect cost
Cost: Hospital chaplain's salary Cost Object: A particular patient
Indirect cost
All of the following are pillars of managerial accounting except: - Controlling - Decision-making - Planning - Maximizing profit
Maximizing profit
The salary of the head of the Laboratory Department
None
Property taxes associated with a company's administrative facility are considered
Nonmanufacturing costs
Benefits from a new DNA analyzer
Opportunity cost
Advertising costs
Period cost
Depreciation on salespersons' cars
Period cost
Depreciation on chairs and tables in the factory lunchroom
Product cost
Factory supervisors' salaries
Product cost
Planning involves ____
Setting goals and objectives
If a firm increases its activity level, _____________
Some costs will change, other costs will remain the same
Cost of the old X-ray machine
Sunk cost
Which observation is true of period costs?
They are expensed in the period in which they are incurred
Average cost per cup of coffee served =
Total cost / Cups of coffee served in a week
The traditional income statement uses which of the following cost categories? - Variable expenses and fixed expenses - Cost of Goods Sold and fixed expenses - Operating expenses and selling and administrative expenses - Cost of goods sold and selling and administrative expenses
- Cost of goods sold and selling and administrative expenses
The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed below are some of the costs that the company incurs. For each cost, indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, selling, or an administrative cost. The salary of the company's accountant
Administrative cost
Manufacturing costs include all of the following categories except ______ - Administrative costs - Direct labor - Direct materials - Manufacturing overhead
Administrative costs
_____________ is sometimes called "touch labor"
Direct labor
Emphasizes objectivity
Financial accounting
Not required to follow GAAP
Managerial accounting
The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed below are some of the costs that the company incurs. For each cost, indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, selling, or an administrative cost. Depreciation on equipment used to test assembled computers before release to customers
Manufacturing overhead cost
The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed below are some of the costs that the company incurs. For each cost, indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, selling, or an administrative cost. The salary of the assembly shop's supervisor
Manufacturing overhead cost
Items such as indirect materials, indirect labor, maintenance, and repairs on production equipment, depreciation, and insurance on manufacturing facilities are included in ___________
Manufacturing overhead costs
The _____________ requires that the costs incurred to generate a particular revenue should be recognized as expenses in the same period that the revenue is recognized
Matching principle
Rent on the space occupied by radiology
None
The salary of the head of the Radiology Department
None
Cost of leasing the corporate jet used by the company's executives
Period cost
Materials used for boxing products for shipment overseas (units are not normally boxed)
Period cosy
Soap and paper towels used by factory workers at the end of the shift
Product cost
The cost of packaging the company's product
Product cost
Workers' compensation insurance for factory employees
Product cost
A fixed cost is a cost which __________
Remains constant in total with changes in the level activity
The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed below are some of the costs that the company incurs. For each cost, indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, selling, or an administrative cost. The cost of advertising in the Puget Sound Computer User newspaper.
Selling cost
Which of the following is always an irrelevant cost? - Differential cost - Sunk cost - Opportunity cost
Sunk cost
In the equation, Y = a + bX, X represents __________
The level of activity
Salaries of personnel who work in the finished goods warehouse
Period cost
The cost of renting rooms at a Florida resort for the annual sales conference
Period cost
The wages of the receptionist in the administrative offices
Period cost
Cost: The salary of the head of pediatrics Cost Object: A particular pediatric patient
Indirect cost
Which of the following is not a business management perspective that goes beyond the numbers to enable intelligent planning, controlling, and decision-making? - Enterprise risk management perspective - Lean production perspective - Corporate social responsibility perspective - Leadership perspective
Lean Production perspective
The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed below are some of the costs that the company incurs. For each cost, indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, selling, or an administrative cost. The wages of employees who assemble computers from components
Direct labor cost
Emphasize decisions affecting the future
Managerial accounting
Materials that become an integral part of the finished product and whos costs can be conveniently traced to the finished product are called _______
Direct materials
Emphasizes relevance
Managerial accounting
Which of the following is true of the contribution approach? - It is mainly used for external reporting purposes - It separates costs into fixed and variable categories - It is not useful for merchandising companies - It calculates gross margin by deducting cost of goods sold from sales.
It separates costs into fixed and variable categories
Heat, water, and power consumed in the factory
Product cost
How should the wages of a sheet metal worker in a fabrication plant be classified?
Product cost
Lubricants used for machine maintenance
Product cost
Rent on equipment used in the factory
Product cost
Differential costs are always
Relevant in making business decisions
The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed below are some of the costs that the company incurs. For each cost, indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, selling, or an administrative cost. Sales commission is paid to the company's salespeople
Selling cost