Q1. Which of the following costs would be considered a period rather than a product cost in a manufacturing company:
a. Direct materials cost
b. Property tax on the corporate headquarters
c. Electric cost to light the factory
d. Depreciation expense on manufacturing equipment
Q2. Which of the following is a characteristic of managerial accounting?
a. Reports primarily on activities occurring prior to the current period
b. Focuses on the needs of investors.
c. No mandatory reporting rules
d. Is developed using only accounting information
Q3. Which of the following is a cost driver?
a. Deciding to conduct business in Brazil
b. Granting permission to customer service personnel to give away free product up to $25 to resolve customer complaints
c. Expanding available retail sales space by 500 square feet
d. All of the above
Q4. Identify the three cost categories in manufacturing:
a. Direct materials, direct labor, and manufacturing overhead
b. Direct materials, direct labor, and structural costs
c. Indirect materials, indirect labor, and period costs
d. All period costs, structural costs and selling expense
Q5. A graphical representation of what type of cost has zero cost with zero units?
a. Mixed cost
b. Variable cost
c. Fixed cost
d. Step cost
Q6. A process production manufacturer has beginning inventory of 10,000 units, 30% complete, and ending inventory of 8,000 units, 40% complete. There were 22,000 units started during the period. Determine the number of equivalent units of conversion in process.
a. 27,200
b. 20,800
c. 18,200
d. 25,000
Q7. Which of the following documents is used to accumulate all of the manufacturing costs assigned to a job:
a. Labor time report
b. Purchase order
c. Bill of materials
d. Job costing sheet
Q8. Custom Jeans Works is establishing its predetermined overhead rate for 2018. The measure of activity is the number of machine hours that the cutting machines operate which is estimated to be 16,250 for 2018. Based on the following, what rate should Custom Jeans Works utilize for its predetermined overhead rate in 2018?
Estimated Annual Expenses for 2018
Indirect materials $ 230,450
Indirect labor 398,000
Factory utilities 50,000
Sales commissions 125,000
Factory rent 74,000
Factory maintenance 16,000
Total $ 893,450
a. $39/machine hour
b. $47/machine hour
c. $63/direct labor hour
d. $63/machine hour
Q9. If an accounting department needs to hire one additional accountant for each increase in revenue of $3,000,000, this represents what time of cost to the company?
a. Mixed cost
b. Variable cost
c. Fixed cost
d. Step cost
Q10. Which of the following statements best represents job order costing?
a. Job order costing works best when there is production of identical units on a continuous basis
b. Job order costing works best for companies like Kraft Heinz and SanDisk
c. In job order costing, scheduling personnel preparing a production report for each job
d. In job order costing, a process cost sheet is used to accumulate the costs for each job