Download Cornerstones of Managerial Accounting 6th Edition Mowen Test Bank PDF

TitleCornerstones of Managerial Accounting 6th Edition Mowen Test Bank
TagsCost Of Goods Sold Gross Margin Inventory Cost
File Size490.4 KB
Total Pages66
Document Text Contents
Page 1

Chapter 2 - Basic Managerial Accounting Concepts



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1. It is beneficial to assign indirect costs to cost objects.

a. True

b. False


True


2. Price must be greater than cost in order for the firm to generate revenue.

a. True

b. False


False


3. Accumulating costs is the way that costs are measured and recorded.

a. True

b. False


True


4. Assigning costs involves the way that a cost is linked to some cost object.

a. True

b. False


True


5. Assigning costs tells the accountant who spent the money.

a. True

b. False


False


6. A cost object is any item such as products, customers, departments, regions, and so on, for which costs are
measured and assigned.

a. True

b. False


True


7. Costs are directly, ndirectly, associated with cost objects.

a. True

b. False


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Page 2

Chapter 2 - Basic Managerial Accounting Concepts



ANSWER: False


8. Direct costs are those costs that cannot be easily and accurately traced to a cost object.

a. True

b. False


ANSWER: False

RATIONALE:

Page 33

Chapter 2 - Basic Managerial Accounting Concepts






150. Information from the records of Place, Inc., for December is as follows:


Sales $820,000
Selling and administrative expenses 140,000
Direct materials purchases 176,000
Direct labor 200,000
Factory overhead 270,000
Direct materials, December 1 24,000
Work in process, December 1 50,000
Finished goods, December 1 46,000
Direct materials, December 31 28,000
Work in process, December 31 56,000
Finished goods, December 31 38,000




Net income for the month of December is:

a. $644,000.

b. $36,000.

c. $636,000.

d. $180,000.


b

SUPPORTING CALCULATIONS:
COGM = ($24,000 + $176,000 − $28,000) + $200,000 + $270,000 + $50,000 − $56,000 = $636,000
COGS = $636,000 + $46,000 − $38,000 = $644,000
NI = $820,000 − $140,000 − $644,000 = $36,000


Cost of goods manufactured:

Direct materials used in production
($24,000 + $176,000 – $28,000) $172,000

Direct labor 200,000

Manufacturing overhead 270,000

Total mfg costs for December $642,000

Plus WIP, Dec. 1 50,000

Less WIP, Dec. 31 (56,000)

Cost of goods manufactured, December $636,000


Cost of goods sold:

Cost of goods manufactured $636,000

Plus FG, Dec. 1 46,000

Less FG, Dec. 31 (38,000)

Cost of goods sold $644,000

Page 34

Chapter 2 - Basic Managerial Accounting Concepts



Selling and administrative expenses $225,000
Direct materials used 397,500
Direct labor 450,000



Direct materials



Dec. 1
$36,000



Dec. 31
$42,000

Work in process 75,000 84,000
Finished goods 69,000 57,000



The cost of direct materials purchased is:


a. $397,500.

b. $403,500.

c. $367,500.

d. $405,000.




151. Selected data concerning the past year's operations of the Burner Corporation are as follows:






Inventories



















ANSWER: b

RATIONALE: SUPPORTING CALCULATIONS: $397,500 + $42,000 − $36,000 = $403,500


152. Stone Company, maker of computers, incurred the following costs during the year:



Classify each cost as either fixed or variable cost.


1. Salary of the factory supervisor
2. Materials needed to assemble the computers
3. Wages paid to an assembly line worker
4. Depreciation on the factory
5. Utility bill for the factory
6. Grease used to lubricate the machine
7. Rent paid for the factory
8. Property taxes on the factory and corporate office
9. Boxes used to package the completed computers

10. Advertising in a newspaper monthly


ANSWER: 1. Fixed
2. Variable
3. Variable
4. Fixed
5. Variable
6. Variable
7. Fixed
8. Fixed
9. Variable

10. Fixed

Page 65

Chapter 2 - Basic Managerial Accounting Concepts








a. Work in process inventory

b. Finished goods inventory

c. Cost of goods sold

d. Cost of goods manufactured

e. Total manufacturing costs

233. The cost of units finished but not sold at the end of the current period


b


234. Direct materials + direct labor + overhead


e


235. The cost of units unfinished at the end of the current period


a


236. Beginning finished goods inventory + Cost of goods manufactured - Ending finished goods inventory


c


237. (direct materials + direct labor + overhead) +/− the change in work in process inventory from the beginning to the
end of the current period



d




a. gross margin

b. selling expenses

c. sales revenue

d. cost of goods sold

e. operating income

238. gross margin − selling and administrative expenses


e


239. marketing and distributing costs


b


240. price x units sold


c


241. sales revenue − cost of goods sold


a


242. Beginning finished goods inventory + Cost of goods manufactured - Ending finished goods inventory


d

Page 66

Chapter 2 - Basic Managerial Accounting Concepts






Select the appropriate definition of each of the items listed below.

a. Income Statement

b. Cost of goods manufactured

c. Work in process

d. Gross margin

e. Operating income

243. Gross margin − selling and administrative expenses


ANSWER: e


244. The difference between sales revenue and cost of goods sold


ANSWER: d


245. The total cost of goods completed during the current period


ANSWER: b


246. Covers a particular period of time


ANSWER: a


247. Cost of partially completed goods


ANSWER: c

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