Test 1 chapter 1-3.rtf

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Department
Management Sciences
Course
MSCI 262
Professor
Forbes Burkowski
Semester
Fall

Description
Test 1 Spring 2008 Chapters 1-3 Name: __________________________ Row?_________ 1. Managerial accounting: A) is more future oriented than financial accounting. B) tends to summarize information more than financial accounting C) is primarily concerned with providing information to external users. D) is more concerned with precision than timeliness. 2. The function of management that compares planned results to actual results is known as: A) planning. B) directing and motivating. C) controlling. D) decision making. 3. Which of the functions of management involves overseeing day-to-day activities? A) Planning B) Directing and motivating C) Controlling D) Decision making 4. Ideally, how many units should be produced in a just-in-time manufacturing system? A) budgeted customer demand for the current week. B) budgeted customer demand for the following week. C) actual customer demand for the current week. D) maximum production capacity for the current week. Page 1 5. After careful planning, Jammu Manufacturing Corporation has decided to switch to a just-in-time inventory system. At the beginning of this switch, Jammu has 30 units of product in inventory. Jammu has 2,000 labor hours available in the first month of this switch. These hours could produce 500 units of product. Customer demand for this first month is 400 units. If just-in-time principles are correctly followed, how many units should Jammu plan to produce in the first month of the switch? A) 370 B) 400 C) 430 D) 470 6. Management accounting focuses primarily on providing data for: A) internal uses by managers. B) external uses by stockholders and creditors. C) external uses by the Internal Revenue Service. D) external uses by the Securities and Exchange Commission. 7. Indirect labor is a part of: A) Prime cost. B) Conversion cost. C) Period cost. D) Nonmanufacturing cost. 8. The cost of lubricants used to grease a production machine in a manufacturing company is an example of a(n): A) period cost. B) direct material cost. C) indirect material cost. D) none of the above. 9. The salary paid to the president of King Company would be classified on the income statement as a(n): A) administrative expense. B) direct labor cost. C) manufacturing overhead cost. D) selling expense. 10. Direct labor cost is a part of: C o P vr i e m r s e i o c n o s c t o s t A N o N o B )N o Y e s C )Y e s e s D ) e s o 11. Direct material cost is a: C o P vr i e m r s e i o c n o s c t o s t A N o N o B )N o Y e s C )Y e s e s D ) e s o 12. Prime cost and conversion cost share what common element of total cost? A) Direct materials. B) Direct labor. C) Variable overhead. D) Fixed overhead. 13. Wages paid to a timekeeper in a factory are a: P r Ci m o en v c eo r s s t i o n c o s t A Y ) e s o B Y) e Ys e s C N) o N o D N ) o Y e s Page 3 14. Property taxes on a company's factory building would be classified as a(n): A) product cost. B) opportunity cost. C) period cost. D) variable cost. 15. Aable Company's manufacturing overhead is 20% of its total conversion costs. If direct labor is $45,000 and if direct materials are $53,000, the manufacturing overhead is: A) $11,250 B) $13,250 C) $180,000 D) $24,500 16. During the month of January, direct labor cost totaled $17,000 and direct labor cost was 60% of prime cost. If total manufacturing costs during January were $82,000, the manufacturing overhead was: A) $11,333 B) $53,667 C) $28,333 D) $65,000 17. Last month a manufacturing company had the following operating results: B e g i n .n . .i . n$ . . 7 . . 2 . f . ,i. 0n. . 0i. s. 0 h e d E n d i n . .g . . .f$ . i .6n . .6i . s ., .h0 . .0 . .0 . . . . o o S . a. . l . e. ..s .. .. .. .. .. $.. .. 4 .. .. 6.. .. 5 .. .. ,.. 0.. .. .. .. 0.. .. .. .. .. .. .. G r . o. . s. .s .. .. m.. .. ..$ .. ..8 r .. ..8 .. i.., ..0 .. ..0 .. ..0 .. .. .. . . . . What was the cost of goods manufactured for the month? A) $371,000 B) $459,000 C) $383,000 D) $377,000 Use the following to answer questions 18-21: The following data (in thousands of dollars) have been taken from the accounting records of Karsen Corporation for the just completed year. S . a. . l . e. ..s .. .. .. .. ... ... $... ... 9... ... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. R a w m . . .a . t. $ . . 7r. .i0 .a . l. .s . . i . n. . v. . e. n R a w m. . . .a . t. $ . . 4r. .i0 .a . l. .s . . i . n. . v. . e. . n . . t . o. P u r c . h . . a . .s .. e.. $ .. s .. 1 . .o9 . .f 0 . . r . a. . w. . . . m. . . a . D i. r. .e . .c .. t.. .. l.. .a ..$ b.. ..1 o.. ..5 r.. ..0 .. .. .. .. .. .. .. .. .. .. .. .. .. M a n . . . f. .a .. .. $.. t.. u.. .. r.. .i 0. n . . g . . . o . . v . . e . .r . h . A d m . . i . n. . i .. s.. .t .. r ..9 a.. ..0t . i . v. . e. . . e . . x . . p . . e . .n . S e l . l. i. . . .. .. .. .. .. x.. .. p.. . e.. .. n.. .. s .. .. .. s.. .. .. .. . . . . W o r k . .n . . .p . .r . o 0. . c . .e . s. . s . . .i n v e W o r k . i. . . . $p. . 7r. .o 0. .c . . . s. . s . . i. . . . . e F i n i s h . e . .d . .$ .g .9 .o .0 .o . .d . .s . . i. n. . . e n F i n i s h . . e . .d . $. .g 1. .o 4. .o 0. .d . .s . . i . n. . v. . e. . n . Use these data to answer the following series of questions. 18. The cost of the raw materials used in production during the year (in thousands of dollars) was: A) $230 B) $220 C) $160 D) $260 19. The cost of goods manufactured (finished) for the year (in thousands of dollars) was: A) $590 B) $650 C) $660 D) $570 Page 5 20. The cost of goods sold for the year (in thousands of dollars) was: A) $680 B) $540 C) $640 D) $730 21. The net operating income for the year (in thousands of dollars) was: A) $180 B) $170 C) $390 D) $190 22. Emco Company uses direct labor cost as a basis for computing its predetermined overhead rate. In computing the predetermined overhead rate for last year, the company misclassified a portion of direct labor cost as indirect labor. The effect of this misclassification will be to: A) understate the predetermined overhead rate. B) overstate the predetermined overhead rate. C) have no effect on the predetermined overhead rate. D) cannot be determined from the information given. 23. Which of the following entries would record correctly the application of overhead cost? A W )
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