Acct2620

RISE Collaborative Workspace, a co-working space for women, just received a bill for janitorial cleaning services. This would be considered Manufacturing Overhead. a. true b. false

b

Activity-based costing can only be used for internal decision-making; it cannot be used to calculate COGS or inventory for the financial statements a company prepares for its investors and creditors. a. true b. false

a

Bibo's Balloons deals with over- or under- applied manufacturing overhead by transferring the balance to Cost of Goods Sold. Assuming that Bibo's Balloons under- applied manufacturing overhead by $200,000 during the year, the company should: a. increase COGS by $200,000 b. reduce COGS by $200,000 c. prorate the $200,000 among multiple accounts

a

Conversion costs consist of: a. direct labor + manufacturing overhead b. direct materials + manufacturing overhead c. direct materials + direct labor

a

HyperGlide Trampolines, which build trampolines that are ten times bouncier than the competition and coated with bacon grease, deals with over- or under- applied manufacturing overhead by transferring the balance to COGS. Assuming that HyperGlide over-applied manufacturing overhead by $80,000 during the year, the company should: a. reduce COGS by $80,000 b. increase COGS by $80,000 c. prorate the $80,000 among WIP inventory, Finished Goods Inventory, and COGS

a

Managerial Accounting is future-oriented whereas Financial Accounting is past-oriented a. true b. false

a

One disadvantage of Job-order Costing is that the cost of data entry can be quite high a. true b. false

a

Some costs that are fixed may change their behavior outside the relevant change. a. true b. false

a

Which of the following statements is FALSE? a. any cost other than direct materials and direct labor is manufacturing overhead b. indirect costs are costs that are NOT easily traceable to a cost object c. manufacturing overhead contains the cost of indirect materials d. manufacturing overhead contains the cost of indirect labor

a

Your friend Choco is concerned about the childhood obesity epidemic, so she decides to start a company called Fudge to the Rescue. She sells large blocks of fudge to children, but only after they sign a waiver pledging to reduce their broccoli consumption. For Choco's shop, the cost of fudge is probably: a. a variable cost b. a fixed cost

a

A roll of duct tape that a factory manager uses to fix old machines when they break down would most likely be categorized as: a. period cost b. manufacturing overhead c. direct materials d. direct labor

b

ABC Corporation purchases and uses bauxite to manufacture aluminum. The bauxite would be considered: a. period cost b. direct materials c. direct labor d. manufacturing overhead

b

All of the following are issues that could arise when Job-order Costing is used EXCEPT: a. the failure to close a job could lead to costs incorrectly being charged to that job b. the company that manufactures a wide variety of very different products won't be able to use Job-order Costing c. some manufacturing overhead costs are affected by seasonality d. some manufacturing overhead costs occur infrequently (e.g. year-end)

b

An employee just started a production run and has nothing to do for an hour. Thus, he spends an hour on Facebook. The time spent surfing Facebook is: a. overtime b. idle time c. wasted time

b

Caterpillar is a large manufacturing company that produces earth-moving equipment. Thus, the salary of Catepillar's Chief Marketing Office would be considered Manufacturing Overhead. a. true b. false

b

Conversion costs consist of: a. direct materials + manufacturing overhead b. direct labor + manufacturing overhead c. direct materials + direct labor

b

Due to increased automation, direct labor has beacuse an increasingly important part of the manufacturing process for most firms. a. true b. false

b

Financial Accounting and Managerial Accounting both require the use of GAAP. a. true b. false

b

Fontbonne University just received a bill for janitorial services. Fontbonne's accountant would categorize this cost as Manufacturing Overhead. a. true b. false

b

For a manufacturing company, all product costs are direct costs and all period costs are indirect costs. a. true b. false

b

From the perspective of a construction company, the salary of a construction worker who is physically helping to construct a building for a client by installing electrical wiring in the building would be considered: a. direct materials b. direct labor c. manufacturing overhead d. period cost

b

Managerial Accounting was created because: a. companies must create financial statements for investors and creditors b. the rise of large-scale factory production created demand for new types of accounting information c. auditors require that companies create financial statements d. the securities and exchange acts of 1933 and 1934 required that firms issue financial statements

b

One advantage of Job-order Costing is that it is easy for employees to keep track of the costs billed to each job. a. true b. false

b

One advantage of Job-order Costing is that it is easy for employees to keep track of the costs billed to each job. a. true b. false

b

One advantage of the weighted-average method of process costing is that it blends the costs of prior periods with the costs of the current period when calculating the cost per equivalent unit. This improves performance measurement and cost control. a. true b. false

b

Product costs are: a. all costs related to a product, from the initial idea for the product to the product's promotion and eventual sale to customers b. the costs of manufacturing a product c. the costs of manufacturing and marketing a product d. the costs of developing, manufacturing, and marketing a product

b

The basic concepts of Managerial Accounting: a. have been around for thousands of years, dating back to ancient civilizations b. were first created during the Industrial Revolution c. were laid out in a book written by a Venetian monk in the 15th century

b

The main purpose of Managerial Accounting is to: a. prepare the financial statements and accompanying notes b. create information that helps people make better decisions c. correctly track the company's financial data for purposes of tax reporting

b

Washington University in St. Louis just received a bill for janitorial cleaning services. This would be considered Manufacturing Overhead. a. true b. false

b

You decide to start your own consulting firm and rent a space at a startup incubator. For your company, the cost of rent is: a. a variable cost b. a fixed cost

b

A resource sacrificed or forgone to achieve a particular objective is a: a. an investment b. cost object c. cost

c

Companies use Managerial Accounting for all of the following reasons EXCEPT: a. to determine the cost of producing a unit or providing a service b. to determine whether it is worthwhile to serve a particular customer c. to comply with demands from investors and creditors for greater transparancy d. to analyze a company's performance by segment or product line

c

Conversion costs consist of: a. direct materials + direct labor b. direct materials + manufacturing overhead c. direct labor + manufacturing overhead

c

If your friend Abhishek wasn't in college right now, he could earn $50,000 this year at a full-time job. For Abhishek, the $50,000 is: a. an indirect cost b.. a sunk cost c. an opportunity cost

c

Product costs are: a. all costs related to a product, from the initial idea for the product to the product's promotion and eventual sale to customers b. any costs traceable to a product c. the costs of manufacturing a product d. the costs of manufacturing and marketing a product e. the costs of developing, manufacturing, and marketing a product

c

When computing the per-unit production cost in a system of process costing, you can't simply divide the total production cost by the total number of units. This is because: a. the units being produced are different b. the units being produced are identical c. not all units are 100% complete on the last day of the period

c

Which of the following is NOT a type of inventory held by manufacturing companies? a. finished goods inventory b. raw materials inventory c. LIFO inventory d. work-in-progress inventory

c

Which of the following statements about Job-order Costing is FALSE? a. a service company, such as an accounting firm, might use Job-order Costing b. a service company would charge direct costs and allocate indirect costs to jobs c. a service company would charge manufacturing costs to jobs d. a consulting engagement could be treated as a "job" for costing purposes e. all of the above statements are false

c

Which of the following statements is FALSE? a. manufacturing overhead contains the cost of indirect materials b. manufacturing overhead contains the cost of indirect labor c. any cost other than direct materials and direct labor is manufacturing overhead d. indirect costs are costs that are NOT easily traceable to a cost object

c

Which of the statements is TRUE? a. under no circumstances would a manufacturing company ever charge nonmanufacturing to a job b. if manufacturing overhead is over-applied, the company must go back to each job that occurred and adjust the amount of manufacturing overhead charged to the job c. an electronics manufacturer that builds a wide range of computers, tablets, and other electronic devices in low volumes would be most likely to determine per-unit cost using Job-order Costing d. if manufacturing overhead is consistently over- or under- applied, this suggests the company's cost accountant is incompetent

c

Activity-based costing is different from traditional costing systems in that: a. multiple cost pools are used b. some manufacturing costs may be excluded from the product cost c. it is not consistent with GAAP d. all of the above e. none of the above

d

Assume that a manufacturing company does NOT use the weighted-average method of process costing. Assuming you know nothing about the nature of the product being manufactured, how might this manufacturer calculate its per-unit product cost? a. operation costing b. FIFO method of process costing c. job-order costing d. any of the above methods are theoretically possible

d

For the typical manufacturing company that uses traditional Job-order Costing as discussed in class, the cost of a job does NOT include: a. actual manufacturing overhead costs b. selling, general, and administrative costs c. the cost of direct material purchases d. all of the above

d

For the typical manufacturing company that uses traditional Job-order Costing as discussed in class, the cost of a job does NOT include: a. selling, general, and administrative costs b. the cost of direct materials c. actual manufacturing overhead costs d. all of the above

d

Josie's Fabric has two production departments: Spinning and Weaving. After the product passes through the Spinning department, it enters the Weaving department. The costs associated with the product when it first enters the Weaving department (the costs that were incurred in the previous department) are known as: a. direct material costs b. conversion costs c. transferred-in costs d. manufacturing overhead costs e. binkie costs

d

Product costs are: a. any cost traceable to a product b. the costs of manufacturing and marketing a product c. the costs of developing, manufacturing and marketing a product d. the costs of manufacturing a product

d

The salary of a construction worker who is physically helping to construct a university building by laying the cement foundation of the building would be considered: a. period cost b. manufacturing overhead c. direct materials d. direct labor

d

The wages paid to a janitor who sweeps the floor at a chocolate factory would be considered: a. a period cost b. direct materials c. direct labor d. manufacturing overhead

d

Which of the following is NOT a product cost? a. the salary of the factory manager b. the cost of raw materials sued to build a product c. the salary of the worker who physically builds the product d. the sales commissions paid to the sales force who sell the product e. the cost of the electric bill for a factory

d

Which of the following is NOT a product cost? a. the salary of the worker who assembles the product b. the salary of the factory manager c. the cost of raw materials used to build a product d. depreciation expense for a printer in the sales office e. the cost of real estate property taxes for the factory

d

Which of the following is NOT a product cost? a. the salary of the worker who assembles the product b. the salary of the factory manager c. the cost of raw materials used to build a product d. the cost of real estate property taxes for a sales office e. depreciation expense for a printer used inside the factory

d

Which of the following statements is FALSE? a. with activity-based costing, you can assign nonmanufacturing costs to a product b. job-order costing does NOT assign the same production cost to each job c. a company that manufactures bottled water would most likely use process costing d. if a manufacturing company adopts a system of activity-based costing, it no longer needs to use a traditional system of costing

d

With a traditional costing system, the per-unit product cost may be distorted by: a. increased automation b. batch-level costs c. a large proportion of overhead relative to the allocation base, resulting in a high manufacturing rate d. all of the above

d

You start a company that manufactures mechanical dogs. On your company's Balance Sheet, inventory would be valued according to: a. FIFO b. LIFO c. either of the above methods would be fine d. none of the above

d

Transportation companies compute metrics such as cost per ton-mile. The calculation of this metric pertains to: a. auditing b. tax accounting c. SEC reporting reqiurements d. financial accounting e. managerial accounting

e

Which type of firms are required to use activity-based costing? a. manufacturing companies b. service companies c. retail companies d. all of the above e. none of the above

e

You start a company that manufactures board games. On you company's Balance Sheet, inventory would be valued according to: a. FIFO b. LIFO c. weighted average cost d. all of the above e. none of the above

e

You start a company that manufactures skateboards. On your company's Balance Sheet, inventory would be valued according to: a. FIFO b. LIFO c. Weighted average cost d. Any of the above methods would be fine e. None of the above

e