Cost Accounting Part 1

61 Questions | Total Attempts: 698

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Cost Accounting Part 1

Quiz Description


Questions and Answers
  • 1. 
    The business entity that converts purchased raw materials into finished goods by using labor, technology, and facilities is a:
    • A. 

      Manufacturer.

    • B. 

      Merchandiser.

    • C. 

      Service business.

    • D. 

      Not-for-profit service agency.

  • 2. 
    The business entity that purchases finished goods for resale is a:
    • A. 

      Manufacturer.

    • B. 

      Merchandiser.

    • C. 

      Service business.

    • D. 

      For-profit service business

  • 3. 
    The type of merchandiser who purchases goods from the producer and sells to stores who sell to the consumer is a:
    • A. 

      Manufacturer.

    • B. 

      Retailer.

    • C. 

      Wholesaler.

    • D. 

      Service business.

  • 4. 
    Examples of service businesses include:
    • A. 

      Airlines, architects, and hair stylists.

    • B. 

      Department stores, poster shops, and wholesalers.

    • C. 

      Aircraft producers, home builders, and machine tool makers.

    • D. 

      None of these are correct.

  • 5. 
    ISO 9000 is a set of international standards for:
    • A. 

      Determining the selling price of a product.

    • B. 

      cost control.

    • C. 

      Quality management.

    • D. 

      Planning,

  • 6. 
    Unit cost information is important for making all of the following marketing decisions except:
    • A. 

      Determining the selling price of a product.

    • B. 

      Bidding on contracts.

    • C. 

      Determining the amount of advertising needed to promote the product.

    • D. 

      Determining the amount of profit that each product earns.

  • 7. 
    The process of establishing objectives or goals for the firm and determining the means by which they will be met is:
    • A. 

      Controlling.

    • B. 

      Analyzing profitability.

    • C. 

      Planning.

    • D. 

      Assigning responsibility.

  • 8. 
    Control is the process of monitoring the company’s operations to determine whether the company’s objectives are being achieved.  Effective control is achieved through all of the following except:
    • A. 

      Periodically measuring and comparing company results.

    • B. 

      Periodically measuring and comparing company results.

    • C. 

      Constantly monitoring employees to ensure they do exactly as they are told.

    • D. 

      Taking necessary corrective action when variances warrant doing so.

  • 9. 
    Aaron Smith is the supervisor of the Machining Department of Bennett Corporation.  He has control over and is responsible for manufacturing costs traced to the department.  The Machining Department is an example of a(n):
    • A. 

      Cost center.

    • B. 

      Inventory center.

    • C. 

      Supervised work center.

    • D. 

      Worker’s center.

  • 10. 
    Which of the following items of cost would be least likely to appear on a performance report based on responsibility accounting for the supervisor of an assembly line in a large manufacturing situation?
    • A. 

      Direct labor

    • B. 

      Indirect materials

    • C. 

      Selling expenses

    • D. 

      Repairs and maintenance

  • 11. 
    Which of the following items of cost would be least likely to appear on a performance report based on responsibility accounting for the supervisor of an assembly line in a large manufacturing situation?
    • A. 

      Direct labor

    • B. 

      Supervisor's salary

    • C. 

      Materials

    • D. 

      Repairs and maintenance

  • 12. 
    Responsibility accounting would most likely hold a manager of a manufacturing unit responsible for:
    • A. 

      Cost of raw materials.

    • B. 

      Quantity of raw materials used.

    • C. 

      The number of units ordered.

    • D. 

      Amount of taxes incurred.

  • 13. 
    Which of the following statements best describes a characteristic of a performance report prepared for use by a production line department head?
    • A. 

      The costs in the report should include only those controllable by the department head.

    • B. 

      The report should be stated in dollars rather than in physical units so the department head knows the financial magnitude of any variances.

    • C. 

      The report should include information on all costs chargeable to the department, regardless of their origin or control.

    • D. 

      It is more important that the report be precise than timely.

  • 14. 
    Joshua Company prepares monthly performance reports for each department.  The budgeted amounts of wages for the Finishing Department for the month of August and for the eight-month period ended August 31 were $12,000 and $100,000, respectively.  Actual wages paid through July were $91,500, and wages for the month of August were $11,800.  The month and year-to-date variances, respectively, for wages on the August performance report would be:
    • A. 

      $200 F; $8,500 F

    • B. 

      $200 F; $3,300 U

    • C. 

      $200 U; $3,300 U

    • D. 

      $200 U; $8,500 F

  • 15. 
    As a result of recent accounting scandals involving companies such as Enron and World Com, the Sarbanes-Oxley Act of 2002 was written to protect shareholders of public companies by improving
    • A. 

      Management accounting.

    • B. 

      Corporate governance.

    • C. 

      Professional competence.

    • D. 

      The corporate legal process.

  • 16. 
    Which of the following is not a key element of the Sarbanes Oxley Act to improve corporate governance?
    • A. 

      The establishment of the Public Company Accounting Oversight Board

    • B. 

      Requiring a company’s annual report to contain an internal control report that includes management’s opinion on the effectiveness of internal control

    • C. 

      Severe criminal penalties for retaliation against “whistleblowers”

    • D. 

      Requiring that the company’s performance reports are prepared in accordance with generally accepted accounting principles

  • 17. 
    Taylor Logan is an accountant with the Tanner Corporation.  Taylor’s duties include preparing reports that focus on both historical and estimated data needed to conduct ongoing operations and do long-range planning.  Taylor is a(n)
    • A. 

      Certified financial planner.

    • B. 

      Management accountant.

    • C. 

      Financial accountant.

    • D. 

      Auditor.

  • 18. 
    The following data were taken from Mansfield Merchandisers on January 31: Merchandise inventory, January 1 $  90,000 Sales salaries    35,000 Merchandise inventory, January 31    65,000 Purchases   560,000 What was the Cost of goods sold in January?
    • A. 

      $585,000

    • B. 

      $650,000

    • C. 

      $620,000

    • D. 

      $535,000

  • 19. 
    Umberg Merchandise Company’s cost of goods sold last month was $1,350,000.  the Merchandise Inventory at the beginning of the month was $250,000 and there was $325,000 of Merchandise Inventory at the end of the month.  Umberg’s merchandise purchases were:
    • A. 

      $1,350,000

    • B. 

      $1,275,000

    • C. 

      $1,425,000

    • D. 

      $1,675,000

  • 20. 
    Ashley Corp. had finished goods inventory of $50,000 and $60,000 at April 1 and April 30, respectively, and cost of goods manufactured of $175,000 in April.  Cost of goods sold in April was:
    • A. 

      $165,000

    • B. 

      $175,000

    • C. 

      $185,000

    • D. 

      $225,000

  • 21. 
    The balance in Kayser Manufacturing Company’s Finished Goods account at November 30 was $825,000.  Its November cost of goods manufactured was $2,350,000 and its cost of goods sold in November was $2,455,000.  What was the balance in Kayser’s Finished Goods at November 1?
    • A. 

      $435,000

    • B. 

      $640,000

    • C. 

      $710,000

    • D. 

      $930,000

  • 22. 
    Inventory accounts for a manufacturer include all of the following except:
    • A. 

      Merchandise Inventory.

    • B. 

      Finished Goods.

    • C. 

      Work in Process.

    • D. 

      Materials.

  • 23. 
    For a manufacturer, the total cost of manufactured goods completed but still on hand is:
    • A. 

      Merchandise Inventory.

    • B. 

      Finished Goods.

    • C. 

      Work in Process.

    • D. 

      Materials.

  • 24. 
    For a manufacturer, manufacturing costs incurred to date for goods in various stages of production, but not yet completed is:
    • A. 

      Merchandise Inventory.

    • B. 

      Finished Goods.

    • C. 

      Work in Process.

    • D. 

      Materials.

  • 25. 
    For a manufacturer, the cost of all materials purchases and on hand to be used in the manufacturing process is:
    • A. 

      Merchandise Inventory.

    • B. 

      Finished Goods.

    • C. 

      Work in Process.

    • D. 

      Materials.

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