1. The main focus of managerial accounting is:
a. The determination of net income
b. The preparation of financial statements
c. Documenting cash flows
d. Decision making
2. Which of the following is not an objective of Management accounting?
a. to provide information for planning, controlling, evaluating, and continuous
improvement.
b. To prepare external reports for investors, creditors, government agencies, and
other outside users.
c. To provide information for decision making.
d. To provide information for costing of services, products, and other objects of
interest to management.
3. Which of the following statements is true about managerial accounting?
a. Managerial accounting reports must follow GAAP.
b. Managerial accounting reports aid potential investors.
c. Managerial accounting reports provide detailed internal information.
d. Managerial accounting reports are audited by CPAs.
Ben Furniture Company manufactures furniture at its Florence, Italy factory. Some of its costs
from the past year include:
Depreciation on sales office $11,000
Depreciation on factory equipment $16,000
Factory supervisor salary $52,500
Sales commissions $23,000
Lubricants used in factory equipment $3,000
Insurance costs for factory $21,000
Wages paid to factory maintenance workers $115,000
Fabric used to upholster furniture $7,000
Freight in on raw materials $2,500
Costs of delivery to customers $9,000
Wages paid to assembly line workers $132,500
Lumber used to build product $72,000
Utilities in factory $44,500
Utilities in sales office $26,500
4. Manufacturing overhead costs for Ben Furniture Company totaled:
a. $122,000
b. $324,000
c. $228,000
d. $252,000
5. The value chain is used by
Test Prep Exam 1- 2/7/2018
a. Service, manufacturing, and merchandising businesses.
b. Only service and merchandising businesses.
c. Only service and manufacturing businesses.
d. Only manufacturing and merchandising businesses.
6. Which of the following is an example of overhead expense in a factory?
a. Wages of administrators in the corporate office
b. Wages of factory maintenance personnel
c. Salaries of sales persons
d. Wages of machine operators
7. Indirect manufacturing costs should be included in manufacturing overhead
a. True
b. False
Rustic Living Furniture Company manufactures furniture at its central Kentucky factory. Some
of its costs from the past year include:
Wages paid to maintenance workers $60,000
Fabric used to upholster furniture $80,100
Wages paid to assembly line workers $100,300
Lumber used to build product $15,700
Sales commissions $7,400
Insurance costs for factory $21,000
Freight – in on raw materials $3,600
Utilities in factory $12,600
Factory supervisor salary $60,200
Depreciation on factory equipment $18,700
Utilities in sales office $26,300
Costs of delivery to customers $8,200
Depreciation on sales office $1,800
Lubricants used in factory equipment $100
8. Product costs for Rustic Living Furniture Company totaled
a. $372,300
b. $278,400
c. $369,200
d. $347,700
Lucky Cow Dairy provided the following expense information for May:
Assembly – line workers’ wages $72,000
Caps for milk bottles $3,200
Reconfiguring the assembly line $125,900
Customer support hotline $10,300
Delivery expenses $20,000
Depreciation on factory equipment $75,900
Plastic milk bottles $52,200
Salaries of salespeople $63,600
Salaries of research scientists $70,400
Customer toll – free order line $6,200
9. What is the total cost for the production category of the value chain?
a. $233,600
b. $203,300
c. $499,700
d. $322,200
10. Inventoriable product costs for a manufactured product include
a. Marketing and research and development costs
b. The costs of direct materials and direct labor only
c. The costs of direct materials, direct labor, and manufacturing overhead
d. None of the above
Fit Apparel Company reports the following data for its first year of operation.
Cost of goods manufactured $650,500
Beginning work in progress inventory $0
Ending work in progress inventory $91,000
Direct materials used $85,900
Manufacturing overhead $100,400
Beginning finished goods inventory $0
Ending finished goods inventory $70,200
11. What is cost of goods sold?
a. $836,800
b. $580,300
c. $655,600
d. $650,500
Selected information for Greek Food Producers is presented in the following table (all data in
thousands)
Beginning raw materials inventory $350
Ending raw materials inventory $250
Direct labor $300
Operating expenses $700
Purchases of direct materials $420
Beginning work in progress inventory $420
Ending work in progress inventory $630
Sales Revenue $4,800
Manufacturing overhead $760
Beginning finished goods inventory $310
Ending finished goods inventory $280
12. What is operating income?
a. $4,100
b. $2,700
c. $3,280
d. $4,800
Selected information regarding a company’s most recent quarter follows (all data in thousands)
Direct labor $520
Beginning work in progress inventory $360
Ending work in progress inventory $350
Cost of goods manufactured $1,570
Manufacturing overhead $860
13. What is the cost of direct materials used for the quarter?
a. $1,580
b. $860
c. $510
d. $180
14. Alexandra Corporation had actual manufacturing overhead costs for the most recent year
of $27,500. Manufacturing overhead is allocated using a predetermined manufacturing
overhead rate of $1.75 per direct labor hour. Direct labor cost is $18 per hour. At the end
of the year, Alexandra Corporation found it had overallocated manufacturing overhead by
$1,000. How much manufacturing overhead was allocated in total during the year?
a. $27,500
b. $26,500
c. $1,000
d. $28,500
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