Question

Chapter 18:

1.             Managerial accounting information:

1.            Is used mainly by external users.
2.            Involves gathering information about costs for planning and control decisions.
3.            Is generally the only accounting information available to managers.
4.            Can be used for control purposes but not for planning purposes.
5.            Has little to do with controlling costs.

2.             Managerial accounting is different from financial accounting in that:

1.            Managerial accounting is more focused on the organization as a whole and financial accounting is more focused on subdivisions of the organization.
2.            Managerial accounting never includes nonmonetary information.
3.            Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions.
4.            Managerial accounting is used extensively by investors, whereas financial accounting is used only by creditors.
5.            Managerial accounting is mainly used to set stock prices.

3.             A direct cost is a cost that is:

1.            Identifiable as controllable.
2.            Traceable to the company as a whole.
3.            Does not change with the volume of activity.
4.            Traceable to a single cost object.
5.            Traceable to multiple cost objects.

4.             A classification of costs that determines whether a cost is expensed to the income statement or capitalized to inventory is:

1.            Fixed versus variable.
2.            Direct versus indirect.
3.            Financial versus managerial.
4.            Service versus manufacturing.
5.            Product versus period.

5.             A fixed cost:

1.            Requires the future outlay of cash and is relevant for future decision making.
2.            Does not change with changes in the volume of activity within the relevant range.
3.            Is directly traceable to a cost object.
4.            Changes with changes in the volume of activity within the relevant range.
5.            Is irrelevant for cost-volume-profit and short-term decision making.

6.             Period costs for a manufacturing company would flow directly to:

1.            The income statement as an expense.
2.            Factory overhead.
3.            The balance sheet as inventory.
4.            Cost of goods sold on the income statement.

   E.    The current schedule of cost of goods manufactured.

7.             Costs that are capitalized as inventory when they are incurred are called:

1.            Period costs.
2.            Product costs.
3.            General costs.
4.            Administrative costs.
5.            Fixed costs.

8.             Costs that flow directly to the income statement as expenses are called:

1.            Period costs.
2.            Product costs.
3.            General costs.
4.            Balance sheet costs.
5.            Capitalized costs.

9.             Product costs:

1.            Are expenditures necessary and integral to finished products.
2.            Are expenditures identified more with a time period rather than with units of product.
3.            Include selling and administrative expenses.
4.            Are expensed on the income statement when incurred.
5.            Are moved to the income statement for any unsold inventory at the end of the year.

10.           Products that have been completed and are ready to be sold by the manufacturer are called:

1.            Finished goods inventory.
2.            Work in Process inventory.
3.            Raw materials inventory.
4.            Cost of goods sold.
5.            Factory supplies.

11.           Goods a company acquires to use in making products are called:

1.            Cost of goods sold.
2.            Raw materials inventory.
3.            Finished goods inventory.
4.            Work in Process inventory.
5.            Conversion costs.

12.           Factory overhead costs may include all the following except:

1.            Indirect labor costs.
2.            Indirect material costs.
3.            Selling costs.
4.            Assembly supplies.
5.            Factory rent.

Answer 1