Managerial Accounting (20 MCQs)_Version 2

Managerial Accounting (20 MCQs)
Version 2

1. The following data are for a recent period's operations:
Beginning finished goods inventory $150,475
Ending finished goods inventory $145,750
Sales $400,000
Gross margin $120,000
The cost of goods manufactured was:
(Points : 2)
$115,275
$284,725
$275,275
$124,725

2. Which of the following is an example of a period cost? (Points : 2)
Fabric used to produce men's pants.
Advertising cost for a new product campaign.
Factory supervisor's salary.
Monthly depreciation of production equipment.

3. Which of the following descriptors refer to management accounting information? (Points : 2)
It is verifiable and reliable.
It is driven by rules.
It is prepared for shareholders.
It provides reasonable and timely estimates.

4. The Institute of Management Accountants (IMA): (Points : 2)
is a professional organization of management accountants
is a professional organization of financial accountants
issues standards for management accounting
issues standards for financial accounting

5. In July direct labor was 40% of conversion cost. If the manufacturing overhead cost for the month was $34,000 and the direct materials cost was $23,000, the direct labor cost was: (Points : 2)
$22,667
$15,333
$51,000
$34,500

6. Product costs are expensed on the income statement when: (Points : 2)
raw materials for the product are purchased
raw materials are requisitioned for the product
the product completes the manufacturing process
the product is sold

7. Management accounting reports might include information about: (Points : 2)
customer complaints.
net income for the year on budgeted income statement.
total assets on budgeted balance sheet.
All of the above are correct.

8. Financial accounting: (Points : 2)
focuses on the future and includes activities such as preparing next year's operating budget
must comply with GAAP (generally accepted accounting principles)
reports include detailed information on the various operating segments of the business such as product lines or departments
is prepared for the use of department heads and other employees

9. The following costs were incurred in July:
Direct materials $35,000
Direct labor $13,000
Manufacturing overhead $15,000
Selling expense $14,000
Administrative expenses $30,000

Prime costs during the month totaled: (Points : 2)
$48,000
$28,000
$107,000
$63,000

10. All of the following are examples of product costs except: (Points : 2)
depreciation on the company's retail outlets.
salary of the plant manager.
insurance on the factory equipment.
rental costs of the factory facility.

11. One consequence of a change from a push to a properly implemented pull production system can be: (Points : 2)
an increase in work in process inventories.
an extremely difficult cultural change due to enforced idleness when demand falls below production capacity.
an increased mismatch between what is produced and what is demanded by customers.
an increase in raw materials inventories.

12. Which of the following is NOT a period cost? (Points : 2)
Monthly depreciation of the equipment in a fitness room used by factory workers.
Salary of a billing clerk.
Insurance on a company showroom, where current and potential customers can view new products.
Cost of a seminar concerning tax law updates that was attended by the company's controller.

13. During the month of July, direct labor cost totaled $12,000 and direct labor cost was 30% of prime cost. If total manufacturing costs during July were $86,000, the manufacturing overhead was: (Points : 2)
$46,000
$40,000
$28,000
$74,000

14. Management accounting: (Points : 2)
focuses on estimating future revenues, costs, and other measures to forecast activities and their results.
provides information about the company as a whole.
reports information that has occurred in the past that is verifiable and reliable.
provides information that is generally available only on a quarterly or annual basis.

15. The five step framework used to guide Six Sigma improvement efforts includes all of the following EXCEPT: (Points : 2)
Analyze.
Control.
Digitize.
Measure.

16. The phase of accounting concerned with providing information to managers for use in planning and controlling operations and in decision making is called: (Points : 2)
throughput time.
managerial accounting.
financial accounting.
controlling.

17. Conversion costs consist of: (Points : 2)
direct and indirect labor.
direct labor and direct materials.
direct labor and manufacturing overhead.
prime costs and manufacturing overhead.

18. Which of the following is NOT one of the five steps in the lean thinking model discussed in the text? (Points : 2)
Continuously pursue perfection in the business process.
Identify value in specific products/services.
Implement an enterprise system.
Create a pull system that responds to customer orders.

19. The Institute of Management Accountants (IMA): (Points : 2)
is a professional organization of management accountants
is a professional organization of financial accountants
issues standards for management accounting
Both a and c are correct.

20. A key element of any organization's strategy is identifying: (Points : 2)
its potential shareholders
its target customers
competitor's products
employee needs
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