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  MULTIPLE CHOICE 1.Management accounting a.deals primarily with people and organizations outside of the business entity. b.requires only periodic reporting on a regular basis. c.uses any type of useful measurement unit, including physical as well as monetary measures. d.deals only with the double-entry recording system. 2.Which of the following types of information is not essential for a.
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21.Total fixed costs remain constant within a defined time period or range of activity. 22.Depreciation on factory equipment is a value-adding cost. 23.Nonvalue-adding costs increase the cost of a product. 24.Direct materials are the only materials in a product. 25.Because it is invisible, direct labor cannot be traced to products. 26.All labor costs can be.
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TRUE/FALSE 1.The types of computations for costs to be transferred out of Work in Process Inventory differ if the production process involves multiple departments rather than a single department. 2.Unlike a job order costing system, a process costing system is not restricted to one Work in Process Inventory account. 3.Unique products are produced.
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12.As the management accountant for Bynami Enterprises, Inc., you have been asked to prepare a statement of cost of goods manufactured at the end of the first quarter. Account balances at that time were as follows: Materials inventory, January 1, 20xx$  510,500 Work in process inventory, January 1, 20xx697,300 Finished goods inventory, January.
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7.Fill in the missing data for Company B: Company B Direct materials used$ 9,000 Direct labor cost4,000 Overhead(a) Total manufacturing costs25,000 Work in process inventory, Jan. 11,000 Work in process inventory, Dec. 313,500 Sales revenue40,000 Finished goods inventory, Jan. 1(b) Cost of goods manufactured(c) Cost of goods available for sale(d) Finished goods inventory, Dec. 314,000 Cost of goods sold26,500 Gross margin(e) Operating expenses(f) Net operating income5,500 8.Fill.
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  1.Complete the following chart by placing an “X” under the applicable column headings. Classify each cost as a fixed cost or a variable cost and as either a direct or indirect product cost or a period cost. ItemCost BehaviorProduct CostsPeriod Cost FixedVariableDirectIndirect Glue used in furniture Cost of workers sanding a product Wages of factory.
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21.The just-in-time philosophy emphasizes a.completing products on schedule. b.increasing production. c.finishing all products before starting new ones. d.eliminating waste. 22.Which of the following is not a result of adopting a just-in-time operating environment? a.Reduced materials waste b.Reduced production time c.Reduced total labor hours d.Reduced production costs 23.TQM can be used in a.merchandising firms. b.service firms. c.manufacturing firms. d.all of these. 24.Which of the following is.
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  MULTIPLE CHOICE 1.Which of the following would not be included in the cost of a manufactured product? a.Cost to ship products to a customer b.Cost of factory machinery used in production c.Cost to design the product d.Plant supervisor's salary 2.Which of the following is not included in the purchase cost of merchandise inventory? a.Purchase discounts b.Overhead costs c.Freight-in costs d.Purchase.
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51.In making the transition from financial accounting to management accounting, you must become accustomed to using the historical dollar as the primary unit of measurement. 52.Benchmarking enables a company to determine whether it is making continuous improvement in its operations without regard to competition. 53.Performance measures are limited to financial data. 54.“Hours of.
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41.(Direct Materials + Direct Labor + Overhead) / Total Number of Units Produced = Product Unit Cost. 42.Normal costing is the sum of actual direct materials, actual direct labor, and actual overhead. 43.Standard costing is based on actual direct materials and direct labor plus estimated overhead. 44.The product costs that appear in the.
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17.Assume your club makes and sells boxes of chocolate every year as a fundraising project for Valentine's Day. As the current director of projects, you are interested in improving the quality of the service and the product your club offers. You have just learned about continuous improvement. Discuss how your.
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31.A manager should write the purpose of a report before preparing it. 32.If a report is urgently needed, some accuracy may have to be sacrificed in the interest of timeliness. 33.A value chain includes only processes and services that add value to the final product or service. 34.Support services, such as legal services,.
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21.The following 2009 information relates to Raddatz, Inc.: Net Income$365,000 Depreciation Expense96,000 Amortization of Intangible Assets11,000 Beginning Accounts Receivable420,000 Ending Accounts Receivable439,000 Beginning Inventory516,000 Ending Inventory560,000 Beginning Prepaid Expenses48,000 Ending Prepaid Expenses42,000 Beginning Accounts Payable119,000 Ending Accounts Payable146,000 Purchase of Long-Term Assets for Cash616,000 Cash from Issuance of Long-Term Debt200,000 Issuance of Stock for Cash160,000 Issuance of Stock for Long-Term Assets110,000 Purchase of Treasury Stock64,000 Sale of.
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31.The balance scorecard a.is rarely used. b.produces formal reports. c.only applies to manufacturing companies. d.links the organization's perspectives with stakeholders. 32.Jillian Harmon supervises 5 cashiers at Jack's Market. In the past, each cashier served an average of 25 customers per hour. Two months ago, management remodeled the store and installed a new cash register system..
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10.At the beginning of 2010, Zuir Company's accounting department calculated the following estimates for the coming year's production: Estimated overhead$441,600 Direct labor hours9,200 hr During the year, Zuir Company experienced $440,000 in actual overhead costs and actually worked 9,100 direct labor hours. Zuir applies overhead to production using a predetermined overhead rate based.
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11.Financial accounting comprises all rules governing the accounting for and reporting of financial information that must be disclosed to people outside the company. 12.The analyses and flow of accounting data inside a company need not depend on the double-entry format. 13.Management accounting data may be gathered for small segments or large divisions.
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9.List three characteristics of a JIT operating environment. 10.A Taste of Italy is a pizza business that delivers only. A Taste of Italy's business objectives are as follows: 1. To be profitable and grow 2. To manage its food inventory carefully (especially the cheese!) 3. To provide fast and courteous service 4. To have repeat.
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51.From Jolier's year-end income statement, you observe that the finished goods inventory has doubled during the year. This would indicate that during the year Jolier a.sold more goods than were produced. b.produced more goods than last year. c.produced more goods than were sold. d.sold more goods than last year. 52.The income statement for a manufacturing.
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23.The activity in the Plant Assets and related Accumulated Depreciation accounts for 2009 is shown below. In addition, the income statement shows a gain on sale of plant assets of $16,000. Plant AssetsAccumulated Depreciation Beginning balance, 2009$234,000Beginning balance, 2009$124,000 Purchases120,0002009 Depreciation36,000 Disposals(82,000)     Disposals(26,000) Ending balance, 2009$272,000     Ending balance, 2009$134,000 Based on the information given, compute the amounts to.
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21.Which of the following costs is considered overhead? a.Indirect labor only b.Indirect materials only c.Indirect materials and indirect labor d.None of these 22.Which of the following is not an example of indirect materials? a.Wood in a desk b.Nails in a desk c.Screws in a desk d.Lubricants for machinery 23.The following are costs for a selected period: direct materials put into.
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21.The four stages of the management process are plan, perform, evaluate, and communicate. 22.The keys to successful report writing include identifying the who, what, when, and why of the report. 23.Management executes a plan by overseeing the daily operations of an organization. 24.Comparing actual performance with expected performance levels is an evaluation activity. 25.Management.
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11.Which of the following is not part of the "perform" stage in the management process? a.Matching human resources to the task to be performed b.Hiring and training personnel c.Identifying operating activities that minimize waste d.Controlling operations 12.Management accounting activities a.are synonymous with financial accounting activities. b.substitute for the management cycle. c.complement the management cycle. d.have nothing to do with.
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13.Accountants have ranked among the highest in ethics among business professions and other occupations. List and briefly describe five ethical standards that management accountants subscribe to that, in your opinion, help maintain the impression that accountants are highly ethical. 1. communicate information fairly and objectively. 14.Suppose a management accountant becomes aware of.
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31.Salaries of supervisory production personnel should be classified as direct labor costs. 32.A cost is classified as an overhead cost if it is not directly traceable to an end product or a cost object. 33.Lubrication used for machines is an example of a direct material. 34.Minor materials and other production supplies that cannot.
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11.If there is a credit balance in the Factory Payroll Payable at the end of the accounting period, it represents a.the amount by which applied payroll was greater than actual payroll. b.the amount by which actual payroll was greater than applied payroll. c.labor costs which have not yet been distributed. d.an amount that should.
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41.Total quality management focuses on reducing waste. 42.The main goal of total quality management is to reduce product costs. 43.The costs of quality consist entirely of rework costs and customer complaint costs. 44.Activity-based costing (ABC) is used most often to improve the assignment of overhead costs to products. 45.Activity-based management is an extension of.
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11.Prime costs consist of a.direct materials and overhead. b.direct labor and overhead. c.direct labor and indirect labor. d.direct materials and direct labor. 12.Conversion costs consist of a.direct materials and direct labor. b.direct labor and overhead. c.direct materials and overhead. d.direct labor and indirect labor. 13.The three costs in every product are a.direct materials, work in process, and overhead. b.direct materials, work in.
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TRUE/FALSE 1.Management accounting is not a subordinate activity to financial accounting. 2.Management accounting is the process of identifying, measuring, accumulating, analyzing, preparing, and communicating financial information used by management. 3.Financial accounting is defined as the use of management information  to plan, evaluate, and control within the organization and to ensure appropriate use and.
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14.The following information has been made available to you. Assume that overhead is applied on the basis of direct labor hours. Estimated overhead$1,638,000 Estimated direct labor hours390,000 Actual direct labor hours442,000 Actual overhead$1,862,000 a. Compute the predetermined overhead rate. b. Compute the amount of applied overhead for the year. c. Compute the amount of underapplied or overapplied.
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21.The ending balance in the Work in Process Inventory account is supported by individual Overhead account balances. 22.A zero balance in Finished Goods Inventory at the start of the period means all previously completed products have been shipped. 23.To prepare financial statements at the end of the accounting period, the actual overhead.
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TRUE/FALSE 1.Product costs for a manufacturing company consist of direct materials, direct labor, and overhead. 2.Period cost and product cost are synonymous terms. 3.The costs of marketing and delivering a product are not included in its inventory valuation. 4.For a manufactured product, all costs incurred to get the product ready for sale are included.
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31.Which of the following contains period costs? a.Work in Process b.Finished Goods c.Cost of Goods Sold d.Selling and administrative expenses 32.In a manufacturing environment, direct labor costs initially flow a.into the Materials Inventory account. b.directly to Cost of Goods Sold. c.into the Work in Process Inventory account. d.into the Finished Goods Inventory account. 33.In a manufacturing environment, costs of materials.
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61.The cost of goods manufactured is added to the beginning balance of Finished Goods Inventory to obtain the total cost of goods available for sale during the period. 62.The amount for cost of goods manufactured should be the same as the amount transferred from the Work in Process Inventory account to.
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  MULTIPLE CHOICE 1.The type of product costing system used by a company is dictated by the a.project manager. b.production process. c.company president. d.plant supervisor. 2.Product costs appear on the income statement in the form of a.cost of goods sold. b.materials inventory. c.sales commissions. d.none of these. 3.Accounting for the incurrence of __________ does not change significantly between job order costing and.
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  1.Management accounting differs from financial accounting in many ways. Indicate with an “X” in the appropriate column whether each of the following characteristics relates to financial accounting, management accounting, or neither. Financial AccountingManagement AccountingNeither Primary Users: Owners, stockholders, lenders, customers, governmental agencies Managers, lenders Managers, employees Report Format and Frequency: In conformance with GAAP whenever needed Flexible, driven.
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71.By using a predetermined overhead rate and an allocation base, such as direct labor dollars or hours, one can assign overhead costs by debiting the Overhead account and crediting the Work in Process Inventory account. 72.As actual overhead costs are incurred, the Overhead account is debited. 73.If overhead has been overapplied during.
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61.When there is an ethical conflict, the management accountant should resign if the immediate supervisor is involved with the conflict. 62.Practitioners of management accounting and financial management have a responsibility to communicate information fairly and objectively. 63.When unable to resolve an ethical conflict, the accountant should consider consulting with an attorney as.
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41.The cost of goods manufactured decreases which of the following accounts? a.Work in Process Inventory b.Finished Goods Inventory c.Overhead d.Cost of Goods Sold 42.Total manufacturing costs increase which of the following accounts? a.Cost of Goods Sold b.Work in Process Inventory c.Finished Goods Inventory d.Overhead 43.Total manufacturing costs are equal to a.Direct Materials + Direct Labor + Selling Costs. b.Direct Materials + Direct.
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11.Period costs are not considered when costing products for inventory. 12.Inventoriable cost is a synonym of period cost. 13.Manufacturing costs behave as variable or fixed costs. 14.The two primary types of cost behavior are fixed and variable. 15.Direct labor is a fixed cost because it always occurs. 16.Fixed costs per unit are constant along a.
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20.Carlson Manufacturing is a producer of plastic bottles for bottled water companies. In July of this year, the plant manager switched to a new supplier of raw materials. The materials have a lower cost, and because of their chemical composition, more bottles can be made per hour. The downside of.
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5.Use the information below for the year ended December 31, 20xx, to prepare the statement of cost of goods manufactured. InventoriesBeginningEnding Materials inventory$32,300$ 33,900 Work in process inventory40,50041,900 Direct materials purchased158,300 Total direct labor costs231,300 Total indirect labor costs45,200 Utilities27,100 Depreciation36,200 Small tools3,100 Factory insurance1,800 Factory supervision39,500 Miscellaneous overhead costs6,200 6.Use the information below for the year ended December 31, 20xx, to prepare.
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61.Predetermined overhead rates generally are useful for all but which of the following? a.Price determination b.Estimating production levels c.Inventory valuation d.Product costing 62.If overhead is applied on the basis of direct labor hours, and actual hours worked are less than budgeted, which of the following is true, assuming estimated overhead is correct? a.Overhead is probably overapplied. b.Overhead.
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81.A cost driver is a cost pool that increases with activity. 82.Cost allocation requires pooling of overhead costs and the selection of a cost driver. 83.Calculation of a product's overhead rate is done during the accounting period. 84.The overhead rate is equal to the total estimated overhead costs divided by the actual cost.
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51.As units are completed, their costs are transferred from the Work in Process Inventory account to the Finished Goods Inventory account. 52.A materials request form is prepared whenever the purchasing department orders materials. 53.The job order cost card reflects the product cost per unit. 54.Materials costs flow from the Materials Inventory to the.
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71.Lopar Company uses a predetermined overhead rate based on direct labor dollars. Lopar Company estimated that its 2010 overhead would total $938,000 and that 2010 direct labor costs would be $670,000. During 2010, actual overhead costs were $960,000, and actual direct labor costs were $700,000. By how much was Lopar's.
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11.In a job order costing system, the Factory Payroll account is a clearing account. 12.Costs for individual jobs are maintained on job order cost cards when job order costing is in use. 13.Job order cost cards for incomplete jobs make up the subsidiary ledger for the Finished Goods Inventory account. 14.When a job.
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3.The costs listed below are related to a manufacturer of all-natural ice cream. In the space provided, indicate whether the cost should be classified as direct materials (DM), direct labor (DL), or overhead (OH). _____ a. Maintenance on factory building _____ b. Cream _____ c. Mixing department wages _____ d. Vanilla _____ e. Factory supervisor's.
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