Accounting 207 Exam 1

Which of the following is not true of job-order costing? a. It is used in firms that produce homogeneous products. b. The key document for accumulating manufacturing costs is the job-order cost sheet. c. The cost of each job is accumulated on the job-order cost sheet. d. All of these choices are correct. e. None of these choices

A

Which of the following statements is false? a. In normal costing, actual overhead costs always enter the work-in-process account. b. In normal costing, the cost of a job includes direct materials, direct labor, and applied overhead. c. Indirect labor is part of overhead. d. The use of normal costing means that overhead is applied to each job using a predetermined rate. e. None of these choices

A

When a job is completed but not sold, the accounts affected are: a. Raw Materials and Work in Process. b. Work in Process and Finished Goods. c. Finished Goods and Overhead Control. d. Work in Process and Cost of Goods Sold. e. Finished Goods and Cost of Goods Sold

B

Which of the following costs is not included on a job-order cost sheet? a. Applied plantwide overhead costs b. Actual plantwide overhead costs c. Direct materials costs d. Direct labor costs

B

Give an example of a management activity referred to as planning? A. Ensuring the most competent candidates are recruited by a company B. Tracking the cost of employee absence C. Developing a strategy for disposing of hazardous waste D. All of the above items are correct

C

Which of the following is true of normal costing? a. Normal costing does not solve the problems associated with actual costing. b. The applied overhead is not calculated on a job-specific basis in normal costing. c. Actual overhead costs are not assigned directly to jobs in normal costing. d. Normal costing uses only the indirect costs of direct materials. e. All of these choices are correct.

C

Value chain

Design, develop, produce, market, deliver, service

Conversion cost

Direct Labor + Manufacturing Overhead

Line position

Direct responsibility for the basic objectives of an organization

What is true about profit maximization?

It should be achieved through legal and ethical means

Staff position

Non-direct responsibility for organizations basic objectives

In a normal costing system, the cost of a job includes a.actual direct materials, actual direct labor, and estimated (applied) overhead. b.estimated direct materials, estimated direct labor, and estimated overhead. c.actual direct materials, actual direct labor, actual overhead, and actual selling cost. d.actual direct materials, actual direct labor, and actual overhead. e.None of these. Job-order costing requires the use of actual, not normal, costing.

a

The standards of ethical conduct for managerial accountants include: a.competence, confidentiality, integrity, and credibility. b.confidentiality, confidence, integrity, and observance. c.pursuit of excellence, credibility, and immediacy. d.caring for others, intuition, and respect for others.

a

Which of the following statements is true of managerial accounting? a.Managerial accounting attempts to provide information for controlling the organization's actions. b.Managerial accounting is subject to rules for external financial reporting. c.Managerial accounting provides historical information. d.Managerial accounting is the provision of accounting information for a company's external users.

a

Variable cost

a cost that rises or falls depending on how much is produced

Indirect labor includes: a.salary of the vice president of marketing. b.salary of a factory's supervisor. c.salary of the CEO. d.None of these choices are correct.

b

Materials in the raw materials account do not become direct materials a.until they are purchased from a vendor. b.until they are withdrawn from inventory for use in production. c.until the finished product is sold. d.None of these choices are correct.

b

The primary objective of managerial accounting is: a.to produce financial information that must comply with various accounting standards. b.to provide management with financial and nonfinancial information useful in planning, controlling, and decision making. c.to provide the Internal Revenue Service with financial and nonfinancial information about the taxable income of an organization. d.to produce information for external users, including investors, creditors, customers, suppliers, and government agencies.

b

Which of the following activities would not be an example of a value-added activity? a.Timely delivery of products b.Storage of finished products c.Customers being offered a variety of products d.Excellent customer service

b

Which of the following is not a common form of certification for managerial accountants? a.Certificate in Internal Auditing b.Certificate in External Auditing c.Certificate in Public Accounting d.Certificate in Management Accounting

b

Who among the following would occupy a line position in a hospital? a.A hospital administrator b.The chief of surgery c.The manager of the cafeteria d.None of these choices are correct.

b

Product costs: a.are manufacturing costs. b.include direct materials, direct labor, and manufacturing overhead. c.are costs that are included in the determining the value of the inventory. d.All of these choices are correct.

d

In terms of strategic positioning, which two general strategies may be chosen by a company? a.Revenue production and cost enhancement b.Activity-based costing and value chain emphasis c.Increasing customer value and decreasing supplier orientation d.Cost leadership and product differentiation e.Product differentiation and cost enhancement

d

Product (or manufacturing) costs consist of a.direct materials, direct labor, and selling costs. b.direct materials, direct labor, manufacturing overhead, and operating expense. c.administrative costs and conversion costs. d.prime costs and manufacturing overhead. e.selling and administrative costs.

d

Which of the following statements is true of a variable cost? a.A variable cost in total remains constant regardless of the level of output. b.A variable cost per unit changes in direct proportion to changes in output within the relevant range. c.A variable cost is a cost that is not linked to a company's output. d.A variable cost in total changes in direct proportion to changes in output within the relevant range.

d

Which of the following statements is true of financial accounting? a.Financial accounting is subject to externally imposed rules. b.Financial accounting is directed toward external users. c.Financial accounting provides information that can be objectively verified and audited. d.All of these statements are correct.

d

Which of the following statements is true of total quality management? a.It has replaced the acceptable quality attitudes of the past. b.It emphasizes the elimination of waste. c.It is a management philosophy in which manufacturers strive to create an environment that will enable workers to manufacture zero-defect products. d.All of these statements are correct.

d

Indirect labor

labor costs that are difficult to trace to specific products

Opportunity cost

the benefit given up or sacrificed when one alternative is chosen over another.