Question 1

Which of the following best describes the primary purpose of managerial accounting?

Accepted Answer

To provide information for internal decision makers to assist in planning, directing, and controlling operations.

Question 2

A company incurs the following costs in one month: $$10,000 for raw materials, 8$$,000 for assembly workers’ wages, and $5,000 for factory rent. What is the total manufacturing overhead?

Accepted Answer

$5,000

Question 3

Which of the following is an example of a period cost?

Accepted Answer

Advertising expense

Question 4

A manufacturing company has the following balances: Beginning Raw Materials Inventory $$12,000, Purchases of Raw Materials 25$$,000, Ending Raw Materials Inventory $7,000. What is the amount of direct materials used?

Accepted Answer

$$\12$$,000 + \$$25,000 - \7$$,000 = \$$30,000$$

Question 5

Which of the following best describes the difference between line and staff positions in an organization?

Accepted Answer

Line positions are directly involved in providing goods or services to customers, while staff positions support line positions.

Question 6

Which of the following is NOT a standard of ethical professional practice according to the Institute of Management Accountants (IMA)?

Accepted Answer

Profitability

Question 7

A company’s schedule of cost of goods manufactured includes the following: Direct Materials Used $$40,000, Direct Labor 30$$,000, Manufacturing Overhead $$20,000, Beginning Work-in-Process Inventory 5$$,000, Ending Work-in-Process Inventory $7,000. What is the cost of goods manufactured?

Accepted Answer

$$\40$$,000 + \$$30,000 + \20$$,000 + \$$5,000 - \7$$,000 = \$$88,000$$

Question 8

Which of the following costs would be classified as a conversion cost?

Accepted Answer

Direct labor and manufacturing overhead

Question 9

A company’s Finished Goods Inventory at the beginning of the year was $$15,000. During the year, the cost of goods manufactured was 120$$,000, and the ending Finished Goods Inventory was $10,000. What is the cost of goods sold?

Accepted Answer

$$\15$$,000 + \$$120,000 - \10$$,000 = \$$125,000$$

Question 10

Which of the following business trends is most closely associated with the triple bottom line?

Accepted Answer

Considering economic, social, and environmental impacts in decision making

Question 11

Which of the following is a direct cost for a tablet computer manufacturer?

Accepted Answer

Wages of assembly line workers

Question 12

A company produced 2,200 units and sold 2,000 units during the year. If the total cost of goods manufactured was $110,000, what is the unit product cost?

Accepted Answer

$$\frac{\110$$,000}{2,200} = \$$50$$

Question 13

Which of the following statements about the flow of product costs in a manufacturing company is correct?

Accepted Answer

Product costs flow from Raw Materials Inventory to Work-in-Process Inventory, then to Finished Goods Inventory, and finally to Cost of Goods Sold.

Question 14

Which of the following is an example of a manufacturing overhead cost?

Accepted Answer

Factory rent

Question 15

A merchandising company’s income statement differs from a manufacturing company’s income statement in which of the following ways?

Accepted Answer

A manufacturing company calculates cost of goods sold using the cost of goods manufactured, while a merchandising company uses the cost of inventory purchased.

Question 16

Which of the following actions would violate the IMA’s standard of integrity?

Accepted Answer

Recording revenue for goods not yet shipped to customers to inflate profits

Question 17

Which of the following best describes the value chain in Total Quality Management (TQM)?

Accepted Answer

A sequence of steps in which each adds value to the end product

Question 18

A service company provided 1,950 services at a total cost of $3,900. What is the cost per service?

Accepted Answer

$$\frac{\3$$,900}{1,950} = \$$2$$

Question 19

Which of the following is NOT a step in calculating the cost of goods manufactured?

Accepted Answer

Calculate cost of goods sold

Introduction to Managerial Accounting: Key Concepts and Cost Classifications

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