Course Introduction
Managerial Accounting
Textbook Exam Questions
Managerial Accounting provides students with the concepts, techniques, and tools necessary to analyze financial and non-financial information for internal decision-making purposes. This course covers fundamental topics such as budgeting, cost behavior and analysis, performance measurement, variance analysis, and responsibility accounting. Students will learn how to prepare and interpret managerial reports to support planning, controlling, and strategic decision-making processes in various organizational settings. Emphasis is placed on using accounting data to solve real-world business problems and improve operational efficiency.
Recommended Textbook
College Accounting Chapters 1 to 30 15th Edition by John Price
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Page 2
Chapter 1: Accounting: The Language of Business
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Q1) An act passed in response to the wave of corporate accounting scandals is the
A)Sorbine-Oxide Act.
B)Sardonic-Oxone Act.
C)Saxon-Ordanly Act.
D)Sarbanes-Oxley Act.
Answer: D
Q2) The following are all government agencies except the A)IRS.
B)FBI.
C)SEC.
D)AICPA.
Answer: D
Q3) Accounting is often referred to as the language of ________. Answer: business
Q4) A partnership has ________ owners. Answer: two or more
Q5) List the "Big Four" public accounting firms in the United States. Answer: Deloitte & Touche, Ernst & Young, KPMG, and PricewaterhouseCoopers
Q6) The owners of a corporation are called ________.
Answer: stockholders or shareholders
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Chapter 2: Analyzing Business Transactions
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Q1) Which financial statement is reported as of a specific date?
A)Statement of Changes in Financial Position
B)Income Statement
C)Statement of Owner's Equity
D)Balance Sheet
Answer: D
Q2) The Balance Sheet heading includes each of the following except:
A)firm's address.
B)title of the report.
C)date of the report.
D)firm's name.
Answer: A
Q3) Choose the option below that reflects the correct order in which to prepare the three financial statements
A)Income Statement; Statement of Owner's Equity; Balance Sheet.
B)Statement of Owner's Equity; Balance Sheet; Income Statement.
C)Income Statement; Balance Sheet; Statement of Owner's Equity.
D)Balance Sheet; Income Statement; Statement of Owner's Equity.
Answer: A
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Page 4
Chapter 3: Analyzing Business Transactions Using T Accounts
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Q1) When charge customers pay cash to apply against their accounts, the amount is recorded:
A)on the left side of the Cash account and the right side of the Fees Income account. B)on the left side of the Cash account and the right side of the Accounts Receivable account.
C)on the left side of the Accounts Payable account and the right side of the Cash account.
D)on the left side of the Cash account and the left side of the Accounts Receivable account.
Answer: B
Q2) Which of the following would cause the Debit column and the Credit column of the Trial Balance to be unequal?
A)Placing the Prepaid Rent balance in the Credit column
B)Placing the Rent Expense balance in the Debit column
C)Placing the Fees Income balance in the Credit column
D)Placing the Office Equipment balance in the Debit column
Answer: A
Q3) Expense accounts are increased on the ________ side of the account. Answer: debit or left
Page 5
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Chapter 4: The General Journal and the General Ledger
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Q1) The journal entry to record a payment made in January for rent for the months of February and March would include:
A)a debit to Rent Expense, and a credit to Sue Snow, Capital.
B)a debit to Sue Snow, Drawing and a credit to Rent Expense.
C)a debit to Rent Expense and a credit to Cash.
D)a debit to Prepaid Rent and a credit to Cash.
Q2) The journal entry to record the receipt of cash from credit clients would include:
A)a debit to Cash and a credit to Fees Income.
B)a debit to Cash and a credit to Accounts Receivable.
C)a debit to Accounts Receivable and a credit to Cash.
D)a debit to Fees Income and a credit to Cash.
Q3) The process of transferring data from a journal to a ledger is known as ________.
Q4) The process of recording transactions in a journal is referred to as ________.
Q5) A ________ is referred to as a record of original entry.
Q6) A description should accompany each entry made in the ________.
Q7) When posting, the ________ is recorded in the Posting Reference column of the journal.
Q8) The______ is referred to as the record of final entry.
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Chapter 5: Adjustments and the Worksheet
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Q1) Which of the following statements is correct?
A)Accumulated Depreciation--Equipment is presented in the Liabilities section of a balance sheet.
B)The cost of supplies used is reported on the statement of owner's equity.
C)The cost of supplies used represents an operating expense of the business.
D)At the time of their acquisition, prepaid expenses are recorded in expense accounts.
Q2) The balance of the owner's drawing account is extended to the Income Statement Debit column of the worksheet.
A)True
B)False
Q3) If long-term assets are not adjusted, expenses on the income statement:
A)will be overstated.
B)will be understated.
C)will not be affected.
D)may be either overstated or understated.
Q4) Preparation of a worksheet eliminates the necessity of preparing an income statement and a balance sheet.
A)True
B)False
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Chapter 6: Closing Entries and Teh Postclosing Trial Balance
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Q1) The entry to close the Depreciation Expense account would include a debit to:
A)the Income Summary and a credit to Cash.
B)the Income Summary account and a credit to the Depreciation Expense account.
C)the Cash account and a credit to the Income Summary account.
D)the Depreciation Expense account and a credit to the Income Summary account.
Q2) From the following list identify the accounts that will appear on the post-closing trial balance by placing an X before those accounts.
________ A. Accounts Payable
________ B. Accounts Receivable
________ C. Accumulated Depreciation
________ D. Cash
________ E. Depreciation Expense
________ F. Equipment
________ G. Fees Income
________ H. Allie Lee, Capital
________ I. Allie Lee, Drawing
________ J. Salaries Expense
________ K. Supplies
________ L. Supplies Expense
________ M. Utilities Expense
Page 8
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Chapter 7: Accounting for Sales and Accounts Receivable
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Q1) Kay Sadia sold merchandise for $15,200 subject to a 7% sales tax. The entry in the sales journal will include a credit to Sales for
A)$14,136.00
B)$12,664.00
C)$15,200.00
D)$16,264.00
Q2) Selected balances from the general ledger of the Loren Company on March 31, 2019, are listed below. Use the appropriate data to prepare the Revenue section of the firm's income statement for the month ended March 31, 2019.
\(\begin{array}{ll}
\text { Sales } & \$ 16,250 \\
\text { Accounts Receivable } & 6,250 \\
\text { Sales Returns and Allowances } & 1,550 \\
\text { Sales Tax Payable } & 68
\end{array}\)
Q3) In some states, a firm receives a discount for paying the amount of sales tax due on time.
A)True
B)False
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Page 9
Chapter 8: Accounting for Purchases and Accounts Payable
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Q1) The Picture Perfect Camera Shop had the following transactions for the month of August 2019. Record the transactions on page 7 of a purchases journal and page 9 of a general journal. Total, prove, and rule the purchases journal as of August 31.
Aug. 1 Purchased cameras for $3,500 plus a freight charge of $160 from the Mason Company, Invoice 532, dated July 29, net payable in 60 days.
6 Purchased color film for $475 from Digital Company, Invoice 989, dated August 4, net payable in 30 days.
10 Purchased camera cases for $925 from Raven Company, Invoice 668, dated August 8; terms are 2/10, n/30.
15 Returned defective cameras to Mason Company and received Credit Memorandum 205 for $540. The cameras were originally purchased on Invoice 532 of July 29.
20 Purchased cameras for $3,575 plus freight of $90 from Braemer Cameras, Invoice 2093, dated August 18; terms are 1/10, n/60.
23 Received Credit Memorandum 597 for $60 from Raven Company. The amount is an allowance for slightly damaged but usable goods purchased on Invoice 668 dated August 8.
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Page 10
Chapter 9: Cash Receipts, Cash Payments, and Banking Procedures
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Q1) When a bank deducts any amount other than a paid check or electronic payment from a depositor's account, it issues a form called a(n)________memorandum.
Q2) A(n)-------is a form received from the bank showing all transactions recorded in the depositor's account during the month.
Q3) Which of the following statements is not correct?
A)The cash register proof is used to enter the cash sales and sales tax in the cash receipts journal.
B)The entry to record the receipt of a promissory note to replace an open account is recorded in the cash receipts journal.
C)In accounting, the term "cash" includes checks, money orders, and funds on deposit in a bank as well as currency and coins.
D)The cash receipts journal has separate columns for debits to Cash, credits to Accounts Receivable, and credits to Sales and Sales Tax Payable.
Q4) If the amount of cash available for deposit is less than the amount listed on the audit tape taken from the cash register, the Cash Short or Over account is________.
Q5) Checks written by a firm that were paid by the bank are called ________ checks.
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Chapter 10: Payroll Computations, Records, and Payment
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Q1) A person who is hired by a company and who is under the control and direction of the employer is called a(n)________.
Q2) When a firm records its payroll, the amount of federal income tax withheld from employees is entered as a liability.
A)True
B)False
Q3) A worker who is paid an agreed amount for each week or month or year, regardless of the actual hours worked, is said to be paid on a(n)________basis.
Q4) The total amount earned by the employee is called the A)payroll.
B)gross pay.
C)take home pay.
D)net pay.
Q5) The employer records the amount of federal income taxes withheld from employees in the________ account.
Q6) Employers are required to pay for ________ insurance that will reimburse employees for losses suffered from job-related injuries.
Q7) FICA tax is commonly referred to as ________ tax.
Page 12
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Chapter 11: Payroll Taxes, Deposits, and Reports
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Q1) Alfred Spindle earned gross wages of $1,850 for the week ended June 21, 2019. His gross wages year to date, prior to his June 21 paycheck, were $42,620. He had $136 withheld from his pay for federal income taxes, and $86 for health insurance. Social Security and is 6.2% and Medicare tax is 1.45%; the federal unemployment tax rate is 0.6% and the state unemployment tax rate is 4.2%, both on a maximum of $7,000 per each employee's annual earnings. The journal entry to record the employer payroll tax expense associated with Alfred's June 21, 2019, paycheck would include
A)A debit to Payroll Tax Expense
B)A debit to FICA Tax Payable
C)A debit to Unemployment Compensation Tax Payable
D)A credit to Payroll Tax Expense
Q2) The entry to record a deposit of federal income taxes withheld and social security and Medicare taxes, would include a
A)debit one or more liability accounts and credit an asset account.
B)debit one or more expense accounts and credit one or more liability accounts.
C)debit an expense account and credit one or more liability accounts.
D)debit an asset account and credit an expense account.
Q3) Form ________ is often referred to as a withholding statement.
Q4) State Unemployment Tax Payable is ________ when the tax is paid to the state.
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Chapter 12: Accruals, Deferrals, and the Worksheet
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Q1) The procedure that most nearly attains the objective of matching revenues and expenses to specific accounting periods is called the________ basis of accounting.
Q2) Millie's Bakery employees earn $4,500 a week for a five-day work week and are paid every Friday. If December 31 falls on a Wednesday, calculate the amount that is owed and select the adjusting entry needed to record the owed but unpaid salaries as of December 31.
A)a debit to Salaries Payable for $900 and a credit to Salaries Expense for $900.
B)a debit to Salaries Expense for $2,700 and a credit to Salaries Payable for $2,700.
C)a debit to Income Summary for $2,700 and a credit to Salaries Payable for $2,700.
D)a debit to Salaries Expense for $4,500 and a credit to Salaries Payable for $4,500.
Q3) Allowance for Doubtful Accounts is
A)deducted from Sales in the Revenue section of the income statement.
B)listed in the Operating Expenses section of the income statement.
C)subtracted from Accounts Receivable in the Asset section of the balance sheet.
D)added to Accounts Receivable in the Assets section of the balance sheet.
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14
Chapter 13: Financial Statements and Closing Procedures
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Q1) Teresa Davis is the owner of a convenience shop. The firm had a net income of $4,500 for the year. What accounts are debited and credited to transfer the net income to the owner's capital account during the closing process?
Q2) Which of the following accounts is not closed at the end of the accounting period?
A)Merchandise Inventory
B)Purchases
C)Rent Expense
D)Sales
Q3) Interest Expense is classified as a(n):
A)Administrative Expense
B)Other Expense
C)Selling Expense
D)Other Income
Q4) Jeannine Coulson is the owner of a book store. During the year she made withdrawals of cash totaling $9,000. What accounts are debited and credited to close the owner's drawing account?
Q5) On a classified balance sheet, Accounts Payable would appear in the________ section.
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Chapter 14: Accounting Principles and Reporting Standards
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Q1) The ________ principle requires that if income is to be properly measured, all expired costs associated with the earning of revenue must be deducted from the revenue in the same accounting period.
Q2) The separate entity assumption permits businesses to record property and equipment as assets that will provide benefits in future periods.
A)True
B)False
Q3) Which of the following statements is NOT true?
A)The SEC has authority to accept or reject financial accounting principles and standards developed by the FASB.
B)The Sarbanes-Oxley Act places great emphasis on internal controls and fraud prevention.
C)Because of the Sarbanes-Oxley Act, it is probable that the FASB's conceptual framework will become less important in developing accounting principles and standards.
D)The American Institute of CPA's has in the past had strong influence on the development of accounting principles.
Q4) How are the concepts of materiality and cost-benefit related?
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Page 16
Chapter 15: Accounts Receivable and Uncollectible Accounts
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Q1) On December 31, prior to adjustment, Allowance for Doubtful Accounts has a credit balance of $430. An analysis of the accounts receivable aging estimates $1,900 of probable losses from uncollectible accounts. The adjusting entry needed to record the estimated losses from uncollectible accounts is
A)$430.
B)$1,900.
C)$2,330.
D)$1,470.
Q2) The allowance method may be used to record bad debt losses for income tax purposes.
A)True
B)False
Q3) What is the type of account and normal balance of Allowance for Doubtful Accounts?
A)Contra asset, credit
B)Liability, credit
C)Asset, debit
D)Contra asset, debit
Q4) The longer an account is past due, the ________ likely it is to be collected.
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Chapter 16: Notes Payable and Notes Receivable
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Q1) The amount of cash paid on the maturity date on a $9,000 face value, 60-day note bearing interest at 8 percent is-------- .
Q2) Compute the amount of interest owed on a 5-month, 7 percent note for $12,000.
Q3) A firm purchased equipment for $6,000 on credit and issued a 120-day note bearing interest at 9 percent as evidence of the debt. The journal entry to record the issuance of the note is:
A)debit Equipment for $6,000, debit Interest Expense for $180 and credit Notes Payable for $6,180.
B)debit Equipment for $6,180, credit Interest Expense for $180, and credit Notes Payable for $6,000.
C)debit Equipment for $6,000, and credit Notes Payable for $6,000.
D)debit Equipment for $6,540, and credit Accounts Payable for $6,540.
Q4) A 2-month note dated January 1, 2019, will mature on the same date as a 60-day note dated January 1, 2019.
A)True B)False
Q5) Find the due date of a 90-day note issued on June 6, 2019.
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Chapter 17: Merchandise Inventory
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Q1) In order to apply the matching concept, inventory costing methods, once selected, cannot be changed to an alternative method.
A)True B)False
Q2) If a firm uses the FIFO method of inventory valuation for tax purposes, it must use the FIFO method for financial accounting.
A)True B)False
Q3) The use of the FIFO method of inventory valuation
A)results in a matching of current inventory costs against sales revenue.
B)results in the most current costs in ending inventory.
C)results in a lowest reported net income in a time of rising prices.
D)results in a highest reported net income in a time of falling prices.
Q4) Inventory can only be valued at the lower of cost or net realizable value if the inventory cost was determined using the FIFO methods.
A)True B)False
Q5) What is inventory shrinkage? What could cause inventory shrinkage?
Q6) Explain what taking a physical inventory is and why it is done.
Page 19
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Chapter 18: Property, Plant, and Equipment
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Q1) For financial accounting purposes, when an asset is traded in for a similar asset, a gain is reported if the trade-in allowance exceeds the book value of the asset traded in.
A)True
B)False
Q2) Which of the following is true regarding recording the trade in of one asset for a similar asset for financial reporting purposes?
A)record only the loss
B)record only the gain
C)record both the loss and the gain
D)record neither the loss nor the gain
Q3) The declining-balance method and the sum-of-the-years'-digits method are referred to as-------------methods of depreciation.
Q4) In 2019, Lucky Mining Company paid $1,200,000 for mining rights. It is estimated that a total of 1,000,000 kilograms of ore are available to be extracted. During 2019, 135,000 kilograms of ore were mined. What is the amount of Depletion Expense recorded in the adjusting entry for 2019?
Q5) Patents, trademarks, and copyrights are examples of --------------assets.
Q6) The normal balance of Accumulated Depreciation is a(n)----------- .
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Chapter 19: Accounting for Partnerships
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Q1) Roy Reynolds and Mike Truesdale are partners. To expand the expertise of their business, they have agreed to admit Jennie Fellows to the partnership on January 1, 2019. The capital account balances on January 1, 2019, after revaluation of assets, are Reynolds, $80,000, and Truesdale, $60,000. Net income or net loss is shared equally. On page 20 of a general journal, record the admission of Fellows to the partnership on January 1, 2019, assuming that Fellows invests $46,000 for 20 percent interest in the business. Omit the descriptions.
Q2) Danny Ortiz and Angela Hufford are partners, and each has a capital balance of $25,000. To gain admission to the partnership, Derek Peters pays $15,000 directly to Ortiz for one-half of his equity. After the admission of Peters, Ortiz' share of the partnership equity will be
A)$40,000.
B)$15,000.
C)$32,500.
D)$12,500.
Q3) If plant equipment is transferred from a sole proprietorship to a partnership, the related--------------accounts start with zero balances in the partnership records.
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Page 21
Chapter 20: Corporations: Formation and Capital Stock Transactions
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Q1) Chicagoland Landscape Company, a newly organized corporation, received a bill from its lawyers for $10,000 for time spent in organizing the company.
1. How should these costs be treated in the company's accounting records? Why?
2. How should they be treated for federal income tax purposes?
Q2) A corporation received a subscription for 1,000 shares of 10 percent, $100 par-value preferred stock at $103 a share. The entry to record this transaction consists of a debit to Subscriptions Receivable-Preferred for $103,000 and a credit to:
A)Preferred Stock for $100,000 and a credit to Retained Earnings for $3,000.
B)Preferred Stock Subscribed for $100,300.
C)Preferred Stock Subscribed for $100,000 and a credit to Paid-in Capital in Excess of Par Value-Preferred Stock for $3,000.
D)Preferred Stock Subscribed for $100,000 and a credit to Gain on Sale of Preferred Stock for $3,000.
Q3) Contreras Corporation issued 16,000 shares of its no-par-value common stock (stated value, $4)for cash at $28 a share. Record the issuance of the stock on page 1 of a general journal. Omit the description.
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Page 22
Chapter 21: Corporate Earnings and Capital Transactions
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Q1) The amount of capital acquired from capital stock transactions is referred to as-------- .
Q2) Corporations are subject to the same tax filing deadlines as individual taxpayers.
A)True
B)False
Q3) The entry to record the distribution of a stock dividend includes a debit to Common Stock Dividend Distributable.
A)True
B)False
Q4) Retained Earnings represents the net income earned throughout the years less amounts paid out as dividends.
A)True
B)False
Q5) A 3-for-2 stock split will triple the reported dollar amount of stockholders' equity. A)True B)False
Q6) The Dividends Payable account appears on the balance sheet as a(n)------- .
Q7) A corporation's own capital stock that has been reacquired is called--------- .
Page 23
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Chapter 22: Long-Term Bonds
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Q1) A company issued 10-year, 8% bonds with a par value of $1,000,000. The company received $980,000 upon issuance. Using the straight-line method, the amount of interest expense for the first semi-annual interest period is:
A)$41,000.
B)$42,000.
C)$40,000.
D)$39,000.
Q2) Coupon bonds are often referred to as------------ bonds.
Q3) The difference between the face value and the selling price of a 10-year discounted bond issued two years after authorization, is amortized for A)10 years.
B)8 years.
C)2 years.
D)The difference is not amortized, only interest is amortized.
Q4) Using borrowed funds to earn a profit greater than the interest that must be paid on the borrowed funds is called trading on the equity, or----------- .
Q5) In the interest formula (I = Prt)the Prt stands for---------- .
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Chapter 23: Financial Statement Analysis
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Q1) In vertical analysis, it is customary to express each item on the balance sheet as a percentage of either the total assets or the total of liabilities and stockholders' equity.
A)True
B)False
Q2) What is a ratio that measures financial strength?
A)ratio of stockholders' equity to total liabilities
B)current ratio
C)working capital
D)rate of return on sales
Q3) Percentages of a base amount rather than dollar amounts are given for the items on-----------statements.
Q4) All of the following are shortcomings of financial statement analyses except:
A)accounts reflect historical costs instead of market values.
B)trend analysis uses a common base year for comparative purposes.
C)the dollar is considered a stable monetary unit.
D)accounting policies and procedures differ among companies.
Q5) If the cost of goods sold is 65 percent of net sales, gross profit on sales would be----------- percent of net sales.
Q6) In horizontal analysis, the earlier period is called the ----------period.
Page 25
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Chapter 24: The Statement of Cash Flows
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Q1) Windwhirl Company reported net income of $150,000 and a $5,000 gain on the sale of equipment. The cash received from the sale of equipment was $27,000. Windwhirl issued additional shares of stock for $237,000, paid off a $196,000 bond issue recorded at par and paid $51,000 in dividends during the year. Calculate the net cash provided or (used)by financing activities.
A)($5,000).
B)$17,000.
C)($10,000).
D)$162,000.
Q2) increase in Wages Payable
A)source
B)use
C)neither
Q3) decrease in Supplies
A)source
B)use
C)neither
Q4) Using the information provided, prepare the cash flows from financing activities for The Dolmen Company.
Q5) Why is the Statement of Cash Flows important?
Page 26
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Chapter 25: Departmentalized Profit and Cost Centers
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Q1) Ace Company sells a variety of merchandise and wants to evaluate contribution margin by product line for the Plumbing, Outdoor Products, and Hardware departments. Gross profit for each of these departments was $285,000; $78,000 and $137,000, respectively. Direct expenses for each department were $136,000; $37,000; and $72,000, respectively. Indirect expenses were allocated to each department at 60% of the direct expense for each segment. The contribution margin of Plumbing was:
A)$203,400.
B)$149,000.
C)$94,600.
D)$67,400.
Q2) Shigley and Lothian, CPAs, allocate the expenses of the duplicating center to the Audit Department and the Tax Department, based on the number of copies that each department requests. During 2019, the Audit Department requested 80,000 copies and the Tax Department requested 120,000 copies. Total expenses of the duplicating center were $640,000 in 2019. How much of the duplicating center's expenses will be allocated to the Audit Department and the Tax Department?
Q3) Maintenance Department
A)Cost
B)Profit
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Page 27
Chapter 26: Accounting for Manufacturing Activities
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Q1) Amounts paid to factory repair and maintenance employees are considered direct labor.
A)True
B)False
Q2) The Indirect Labor account is closed by crediting Indirect Labor and debiting:
A)Wages Payable.
B)Income Summary.
C)Wages Expense.
D)Manufacturing Summary.
Q3) Reversing entries are required by:
A)the Internal Revenue Service.
B)Generally Accepted Accounting Principles.
C)the International Accounting Standards Board.
D)none of these.
Q4) The cost of goods manufactured for a fiscal period is reported on:
A)both the income statement and the balance sheet.
B)both the statement of the cost of goods manufactured and the balance sheet.
C)both the statement of cost of goods manufactured and the income statement.
D)the statement of cost of goods manufactured only.
Q5) The salary paid to a factory supervisor is classified as ----------.
Page 28
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Chapter 27: Job Order Cost Accounting
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Q1) Wilson Enterprises applies overhead based on direct labor cost. The company estimates that their overhead for the year will be $240,000, and direct labor cost to be $300,000. Actual direct labor cost for Martinez Manufacturing was $316,000 and actual overhead costs were $254,000. At the end of the year, manufacturing overhead was:
A)Overapplied by $1,400.
B)Underapplied by $1,400.
C)Overapplied by $1,200.
D)Underapplied by $1,200.
Q2) The McGreen Company employees worked 12,200 hours last year with an average hourly rate of $13 per hour. The overhead was $793,000. If overhead is based on direct labor costs, then the overhead rate per direct labor dollar is
A)$13.00
B)$5.00
C)$65.00
D)$0.20
Q3) A(n)-----------accounting system is normally used when standard types of products are made in continuous operations.
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29
Chapter 28: Process Cost Accounting
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Q1) Calculate the equivalent production units from the information given.
Q2) The equivalent units of production are calculated on the Units of Production report. A)True
B)False
Q3) In the manufacturing overhead subsidiary ledger, a departmental cost sheet is set up for each production department and each service department.
A)True
B)False
Q4) In a process cost accounting system, the average unit cost of a product is determined by dividing the appropriate costs by
A)the number of units placed in production during the period.
B)In a process cost accounting system, the average unit .
C)the number of units transferred to another department.
D)the number of units transferred to the finished goods inventory.
Q5) An ending work in process inventory of 600 units that are 45 percent complete is calculated as-----------equivalent units of production.
Q6) Prepare a cost of production report for the Fabricating Department.
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Page 30
Chapter 29: Controlling Manufacturing Costs: Standard Costs
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Q1) As the level of activity increases, the variable cost per unit of activity
A)increases.
B)decreases.
C)may increase or decrease.
D)does not change.
Q2) The labor time (efficiency)variance and the labor------------ variance together make up the total labor variance.
Q3) The best estimate of the monthly fixed cost is:
A)$37,000
B)$43,000
C)$52,000
D)$70,000
Q4) A budget prepared using several differing levels of activity is a
A)fixed budget.
B)manufacturing cost budget.
C)flexible budget.
D)budget performance report.
Q5) Costs in excess of established standards are----------- .
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Q6) Costs that tend to change in total directly with the volume of manufacturing activity are called------------costs.
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Chapter 30: Cost-Revenue Analysis for Decision Making
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Q1) Common costs are allocated to each segment of a business to determine the segment's contribution margin.
A)True
B)False
Q2) Fixed manufacturing costs are written off as current expenses of the period in which they occurred when using
A)absorption costing.
B)standard costing.
C)direct costing.
D)differential costing.
Q3) On an income statement prepared with a direct costing approach, the excess of sales over the cost of goods sold, based on variable costs only, is referred to as
A)the manufacturing margin.
B)the marginal gross profit on sales.
C)the marginal income on sales.
D)the contribution margin.
Q4) Under----------- costing, a portion of fixed manufacturing overhead is deferred to future periods as part of the inventory value.
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