Financial and Managerial Accounting

1. Which one of the following characteristics would likely be associated with a just-in-time inventory method? (Points : 1)

       Ending inventory of work in process that would allow several production runs

       A backlog of inventory orders not yet shipped

       Minimal finished goods inventory on hand

       An understanding with customers that they may come to the showroom and select from inventory on hand

2. Manufacturing costs include (Points : 1)

       direct materials and direct labor only.

       direct materials and manufacturing overhead only.

       direct labor and manufacturing overhead only.

       direct materials, direct labor, and manufacturing overhead.

Question 3.3. Sales commissions are classified as (Points : 1)

       overhead costs

       period costs.

       product costs.

       indirect labor.

Question 4.4. On the costs of goods manufactured schedule, the item raw materials inventory (ending) appears as a(n) (Points : 1)

       addition to raw materials purchases.

       addition to raw materials available for use.

       subtraction from raw materials available for use.

       subtraction from raw materials purchases.

Question 5.5. The reporting standard for external financial reports is (Points : 1)

       industry-specific.

       company-specific.

       generally accepted accounting principles.

       department-specific.

Question 6.6. An important feature of a job order cost system is that each job (Points : 1)

       must be similar to previous jobs completed.

       has its own distinguishing characteristics.

       must be completed before a new job is accepted.

       consists of one unit of output.

Question 7.7. Factory labor costs (Points : 1)

       are accumulated in a control account.

       do not include pension costs.

       include vacation pay.

       are based on workers’ net pay.

Question 8.8. If manufacturing overhead has been overapplied during the year, the adjusting entry at the end of the year will show a (Points : 1)

       debit to Manufacturing Overhead.

       credit to Finished Goods Inventory

       debit to Cost of Goods Sold.

       credit to Work in Process Inventory.

Question 9.9. In computing equivalent units, ___________ is not part of the equivalent units of production formula. (Points : 1)

       units transferred out

       beginning work in process

       ending work in process

       None of these is correct.

Question 10.10. A production cost report (Points : 1)

       is prepared for each product.

       is prepared from a job cost sheet.

       will show quantity and cost data for a production department.

       will not identify a specific department if more than one department is involved in the production process.

Question 11.11. Differences between a job order cost system and a process cost system include all of the following except the (Points : 1)

       documents used to track costs.

       point at which costs are totaled.

       unit cost computations.

       flow of costs.

Question 12.12. Which would be an appropriate cost driver for the ordering activity? (Points : 1)

       Machine setups.

       Purchase orders.

       Machine hours.

       Inspections.

Question 13.13. Fixed costs normally will not include (Points : 1)

       property taxes.

       direct labor.

       supervisory salaries.

       depreciation on buildings and equipment.

Question 14.14. In CVP analysis, the term "cost" (Points : 1)

       includes only manufacturing costs.

       means cost of goods sold.

       includes manufacturing costs plus selling and administrative expenses.

       excludes all fixed manufacturing costs.

Question 15.15. The break-even point cannot be determined by (Points : 1)

       computing it from a mathematical equation.

       computing it using contribution margin.

       reading the prior year's financial statements.

       deriving it from a CVP graph.

Question 16.16. The CVP income statement (Points : 1)

       is distributed internally and externally.

       classifies costs by functions.

       discloses contribution margin in the body of the statement.

       will reflect a different net income than the traditional income statement.

Question 17.17. Which of the following is not a financial budget? (Points : 1)

       Capital expenditure budget

       Cash budget

       Manufacturing overhead budget

       Budgeted balance sheet

Question 18.18. In a production budget, total required units are the budgeted sales units plus (Points : 1)

       beginning finished goods units.

       desired ending finished goods units.

       desired ending finished goods units plus beginning finished goods units.

       desired ending finished goods units minus beginning finished goods units.

Question 19.19. Which one of the following sections would not appear on a cash budget? (Points : 1)

       Cash receipts

       Financing

       Investing

       Cash disbursements

Question 20.20. Which one of the following budgets would be prepared for a manufacturer but not for a merchandiser? (Points : 1)

       Direct labor budget

       Cash budget

       Sales budget

       Budgeted income statement

Question 21.21. A flexible budget (Points : 1)

       is prepared when management cannot agree on objectives for the company.

       projects budget data for various levels of activity.

       is only useful in controlling fixed costs.

       cannot be used for evaluation purposes because budgeted data are adjusted to reflect actual results.

Question 22.22. The accumulation of accounting data on the basis of the individual manager who has the authority to make day-to-day decisions about activities in an area is called (Points : 1)

       static reporting.

       flexible accounting.

       responsibility accounting.

       master budgeting.

Question 23.23. A measure frequently used to evaluate the performance of the manager of an investment center is (Points : 1)

       the amount of profit generated.

       the rate of return on funds invested in the center.

       the percentage increase in profit over the previous year.

       departmental gross profit.

Question 24.24. All of the following statements are correct about management by exception except it (Points : 1)

       enables top management to focus on problem areas that need attention.

       means that management has to investigate every budget difference.

       requires that there must be some guidelines for identifying an exception.

       means that top management's review of a budget report is focused primarily on differences between actual results and planned objectives.

Question 25.25. The cost of freight-in (Points : 1)

       is to be included in the standard cost of direct materials.

       is considered a selling expense.

       should have a separate standard apart from direct materials.

       should not be included in a standard cost system.

Question 26.26. The investigation of materials price variance usually begins in the (Points : 1)

       first production department.

       purchasing department.

       controller's office.

       accounts payable department.

Question 27.27. If the standard hours allowed are less than the standard hours at normal capacity, the volume variance (Points : 1)

       cannot be calculated.

       will be favorable.

       will be unfavorable.

       will be greater than the controllable variance.

Question 28.28. In incremental analysis, (Points : 1)

       only costs are analyzed.

       only revenues are analyzed.

       both costs and revenues may be analyzed.

       both costs and revenues that stay the same between alternate courses of action will be analyzed.

Question 29.29. Which decision will involve no incremental revenues? (Points : 1)

       Make or buy decision

       Drop a product line

       Accept a special order

       Additional processing decision

Question 30.30. Capital budgeting is the process (Points : 1)

       used in sell or process further decisions.

       of determining how much capital stock to issue.

       of making capital expenditure decisions.

       of eliminating unprofitable product lines.