management accounting

Take Test: MGM 5500 - First Test SU-2011

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Description	This is the first test for MGM 5500.  It covers Chapters 1 - 3. There are 21 questions, each worth 4.762. The test must be completed no later than Sunday, October 12, 2014 @ 8:00 p.m. Please use your time wisely. Good luck,
Instructions	The test is on-line.  The questions are Multiple Choice.  Please work out the problems and select what you believe is the proper response.  The test is meant to be taken on an individual basis without discussion or assistance from anyone else.  Note:  Once an answer is recorded it can NOT be changed.  Please review and make certain that you are comfortable with your response prior to entering it. The questions are based directly from the subject matter discussed in the textbook. You should be able to attain a high grade on this test.
Multiple Attempts	Not allowed. This test can only be taken once.
Force Completion	This test can be saved and resumed later.

Question Completion Status:

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Question 1

1. Some item or type of activity that is used to proportionately distribute manufacturing overhead cost to the product being produced is known as:

   	a.	a cost object
   	b.	a cost pool
   	c.	an allocation base
   	d.	manufacturing overhead

4.762 points  

Question 2

1. The correct journal entry to record the purchase of $320,000 of raw materials on account is:

   	a.	Direct Materials Expense               320,000          Accounts Payable                              320,000
   	b.	Raw Materials Inventory                320,000          Accounts Payable                              320,000
   	c.	Accounts Payable                            320,000           Raw Materials Inventory                     320,000
   	d.	Accounts Payable                             320,000             Direct Materials Expense                   320,000

4.762 points  

Question 3

1. Bad Apple, Inc., uses direct labor hours to allocate overhead costs.  If Bad Apple estimates $40,000 of overhead and 50,000 hours of direct labor this period, the overhead applied when 4,500 direct labor hours are used should be:

   	a.	$3,520
   	b.	$3,600
   	c.	$4,400
   	d.	$5,500

4.762 points  

Question 4

1. A cost that is common to more than one cost objective is a(n):

   	a.	indirect cost
   	b.	product cost
   	c.	direct cost
   	d.	period cost

4.762 points  

Question 5

1. A firm completed 5,000 units of X this period and is still working on 800 at the end of the period.  If the units remaining are 30% complete, the equivalent units of production this period is:

   	a.	5,240
   	b.	5,000
   	c.	800
   	d.	5,800

4.762 points  

Question 6

1. A debit will increase which one of the following accounts?

   	a.	Sales
   	b.	Accounts Payable
   	c.	Work-in-Process Inventory
   	d.	Wages Payable

4.762 points  

Question 7

1. Minnow Manufacturing uses direct labor hours to allocate manufacturing overhead.  Based on overhead cost of $40,000 and 10,000 hours of labor, the overhead cost allocated for each hour of labor would be:

   	a.	$0.25
   	b.	$1.00
   	c.	$4.00
   	d.	$5.00

4.762 points  

Question 8

1. Which of the following accounts would be decreased by a credit entry?

   	a.	Sales
   	b.	Accounts Payable
   	c.	Notes Payable
   	d.	Finished Goods Inventory

4.762 points  

Question 9

1. When product costs reflect the actual direct material costs, actual direct labor costs, and estimated overhead costs, the cost system being used is a(n):

   	a.	actual cost system
   	b.	normal cost system
   	c.	actual-estimated cost system
   	d.	direct-common cost system

4.762 points  

Question 10

1. The Sexton Company allocates manufacturing overhead to production based on direct labor hours.  The following information is available:

      Estimated manufacturing overhead           $227,520

      Actual manufacturing overhead                $225,760

      Estimated direct labor hours                        18,000

      Actual direct labor hours                             17,000 

   The company's overhead application rate should be:

    

   	a.	$12.64
   	b.	$13.28
   	c.	$12.95
   	d.	None of these answers is correct

4.762 points  

Question 11

1. The correct journal entry to record the transfer of $120,000 of raw materials into production is:

   	a.	Direct Materials Expense                  120,000                Work-In-Process Inventory            120,000
   	b.	Work-In-Process Inventory              120,000                 Accounts Payable                           120,000
   	c.	Work-In-Process Inventory                120,000                  Raw Materials Inventory                 120,000
   	d.	Accounts Payable                               120,000                   Direct Materials Expense                120,000

4.762 points  

Question 12

1. The general formula to allocate cost is:

   	a.	estimated overhead cost divided by cost pool
   	b.	cost pool divided by estimated overhead pool
   	c.	cost to be allocated divided by total occurrences of the allocation base
   	d.	cost base divided by estimated overhead pool

4.762 points  

Question 13

1. A cost object is identified to:

   	a.	determine the cost of that particular object
   	b.	determine the range of costs for that corporation
   	c.	determine if a product line should be improved due to technological change
   	d.	none of the answers is correct

4.762 points  

Question 14

1. When product costs reflect the actual direct material costs, actual direct labor costs, and actual overhead costs, the cost system being used is a(n):

   	a.	direct cost system
   	b.	normal costing system
   	c.	actual cost system
   	d.	common cost system

4.762 points  

Question 15

1. Assume that the equivalent units of production this month for Alabama Red's Hot Sauces are 8,350.  If the costs in beginning inventory were $450.00 and current manufacturing costs were $5,311.50, then the cost assigned to the 8,000 units completed would be:

   	a.	None of these answers is correct
   	b.	$5,761.50
   	c.	$5,120.00
   	d.	$5,520.00

4.762 points  

Question 16

1. A cost that is easily traced to an individual cost object is called a(n):

   	a.	common cost
   	b.	period cost
   	c.	direct cost
   	d.	indirect cost

4.762 points  

Question 17

1. The process of assigning manufacturing costs to manufactured products is called:

   	a.	allocation accounting
   	b.	management accounting
   	c.	financial accounting
   	d.	cost accounting

4.762 points  

Question 18

1. The narrow application of management accounting that deals with costing products is known as:

   	a.	cost allocation distribution
   	b.	cost accounting
   	c.	allocation accounting
   	d.	financial accounting

4.762 points  

Question 19

1. Any activity or item for which a separate cost measurement is desired by management is called a(n):

   	a.	cost object
   	b.	direct cost
   	c.	indirect cost
   	d.	common cost

4.762 points  

Question 20

1. Goods purchased but which have not yet entered into the production process are known as:

   	a.	merchandise inventory
   	b.	raw materials inventory
   	c.	work-in-process inventory
   	d.	finished goods inventory

4.762 points  

Question 21

1. A product held for sale by a retailer is known as a(n):

   	a.	common cost
   	b.	indirect cost
   	c.	liability
   	d.	asset

4.762 points  

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