Question 1
The cost of a manufactured product generally consists of which of the following costs?
a. Direct materials cost and factory overhead cost
b. Direct materials cost and direct labor cost
c. Direct labor cost, direct materials cost, and factory overhead cost
d. Direct labor cost and factory overhead cost
Question 2
Which of the following is an example of direct labor cost for an airplane manufacturer?
a. Cost of wages of assembly worker
b. Cost of jet engines
c. Salary of plant supervisor
d. Cost of oil lubricants for factory machinery
Question 3
Which of the following is an example of a factory overhead cost?
a. Factory heating and lighting cost
b. Insurance premiums on salespersons' automobiles
c. Repair and maintenance cost on the administrative building
d. President's salary
Question 4
Which of the following is expensed as incurred in a manufacturing setting?
a. Direct materials used
b. Depreciation of factory buildings
c. Sales commissions
d. Factory supervisor's salary
Question 5
What is the purpose of the Statement of Cost of Goods Manufactured?
a. to determine the amounts transferred to finished goods
b. to determine the ending materials inventory
c. to determine the ending work in process inventory
d. all of the answers are true
Question 6
Which of the following budgets allow for adjustments in activity levels?
a. Static Budget
b. Flexible Budget
c. Continuous Budget
d. Zero-Based Budget
Question 7
McCabe Manufacturing Co.'s static budget at 8,000 units of production includes $40,000 for direct labor and $4,000 for electric power. Total fixed costs are $23,000. At 9,000 units of production, a flexible budget would show:
a. variable and fixed costs totaling $75,375
b. variable costs of $44,000 and $23,000 of fixed costs
c. variable costs of $49,500 and $23,000 of fixed costs
d. variable costs of $49,500 and $25,875 of fixed costs
Question 8
The production budgets are used to prepare which of the following budgets?
a. Sales in dollars
b. Direct materials purchases, direct labor cost, factory overhead cost
c. Operating expenses
d. Sales in units
Question 9
Principal components of a master budget include which of the following?
a. Direct materials budget
b. Sales budget
c. Production budget
d. All of the above
Question 10
The first budget customarily prepared as part of an entity's master budget is the:
a. cash budget
b. direct materials purchases
c. production budget
d. sales budget