St. Leo ACC 202 Principles of Accounting II Accounting Test 5

Question : A fixed cost: Student Answer: Requires the future outlay of cash and is relevant for future decision making. Does not change with changes in the volume of activity within the relevant range. Is directly traceable to a cost object. Changes with changes in the volume of activity within the relevant range. Has already been incurred and cannot be avoided so it is irrelevant for decision making.2. Question : Current information for the Austin Company follows: All raw materials used were traceable to specific batches of product. Austin Company’s cost of goods manufactured for the year is: Student Answer: $125,800. $128,600. $131,400. $137,000. $139,000.3. Question : The salary paid to the supervisor of an assembly line would normally be classified as: Student Answer: Direct labor. Indirect labor. A period cost. A general cost. An assembly cost.4. Question : Goods a company acquires to use in making products are called: Student Answer: Cost of goods sold. Raw materials inventory. Finished goods inventory. Goods in process inventory. Conversion costs.5. Question : Which of the following costs would not be classified as factory overhead? Student Answer: Property taxes on maintenance machinery. Expired insurance on factory equipment. Wages of the factory janitor. Metal doorknobs used on wood cabinets produced. Small tools used in production.6. Question : Which of the following are characteristic of all fraud? Student Answer: It is done to provide direct or indirect benefit to the employee. It violates the employee’s duties to his employer. It costs the employer money. It is secret. Items A through D are all characteristics of fraud. 7. Question : Products that are in the process of being manufactured but are not yet complete are called: Student Answer: Raw materials inventory. Conversion costs. Cost of goods sold. Goods in process inventory. Finished goods inventory.8. Question : Total manufacturing costs incurred during the year do not include: Student Answer: Direct materials used. Factory supplies used. Goods in process inventory, beginning balance. Direct labor. Depreciation of machinery.9. Question : An attitude of constantly seeking ways to improve company operations, including customer service, product quality, product features, the production process, and employee interactions, is called: Student Answer: Continuous improvement. Customer orientation. Just-in-time. Theory of constraints. Total quality measurement.10. Question : A direct costs is a cost that is: Student Answer: Identifiable as controllable. Variable with respect to the volume of activity. Fixed with respect to the volume of activity. Traceable to a cost object. Sunk with respect to a cost object.11. Question : Classifying costs by behavior involves: Student Answer: Identifying fixed cost and variable cost. Identifying cost of goods sold and operating costs. Identifying all costs. Identifying costs in a physical manner. Identifying both quantitative and qualitative cost factors. 12. Question : Products that have been completed and are ready to be sold by the manufacturer are called: Student Answer: Finished goods inventory. Goods in process inventory. Raw materials inventory. Cost of goods sold. Factory supplies.13. Question : A manufacturing statement is also known as a schedule or listing of the: Student Answer: Raw materials processed. Factory supplies used. Cost of goods manufactured. Total finished goods. Cost of goods sold. 14. Question : Managerial accounting is different from financial accounting in that: Student Answer: Managerial accounting is more focused on the organization as a whole and financial accounting is more focused on subdivisions of the organization. Managerial accounting never includes nonmonetary information. Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions. Managerial accounting is used extensively by investors, whereas financial accounting is used only by creditors.15. Question : Use the following data to determine the cost of goods manufactured. Student Answer: $65,800. $45,800. $49,500. $52,300. $47,100.