Exam On Accounting: Quiz!
(192).jpg "Exam On Accounting: Quiz! - Quiz")
.
Questions and Answers
- 1.
The salary of a corporate office security guard is considered a(n):
- A.
Period cost
- B.
Factory overhead
- C.
Inventoriable cost
- D.
Product cost
Correct Answer
A. Period costExplanation
The salary of a corporate office security guard is considered a period cost. Period costs are expenses that are not directly related to the production of goods or services, but are incurred over a specific period of time. These costs are expensed in the period in which they are incurred, rather than being included in the cost of the product. Since the security guard's salary is not directly tied to the production of goods, it is classified as a period cost.Rate this question:
-
- 2.
The following information is available: Assembly line labor costs $175,000 Raw materials purchased 120,000 Indirect materials used 8,000 Depreciation on factory 25,000 Depreciation on administrative equipment 9,000 Sales salaries 78,000 Factory supervision 33,000 Sales office security guard cost 28,000 Based on the above, the cost of factory overhead was:
- A.
$181,000
- B.
$66,000
- C.
$476,000
- D.
None of these answers is correct.
Correct Answer
B. $66,000Explanation
The cost of factory overhead can be calculated by adding the depreciation on factory ($25,000) and the indirect materials used ($8,000). Therefore, the cost of factory overhead is $25,000 + $8,000 = $33,000. However, none of the given answer choices match this calculation. Therefore, the correct answer cannot be determined based on the given information.Rate this question:
-
- 3.
The following information is available: Beginning raw materials inventory $100,000 Ending raw materials inventory 120,000 Beginning work-in-process inventory 270,000 Ending work-in-process inventory 300,000 Beginning finished goods inventory 560,000 Ending finished goods inventory 480,000 Raw materials purchased 990,000 Based on the above, the raw materials transferred to production was:
- A.
$970,000
- B.
$990,000
- C.
$1,020,000
- D.
None of these answers is correct.
Correct Answer
A. $970,000Explanation
The raw materials transferred to production can be calculated by subtracting the ending raw materials inventory from the beginning raw materials inventory and adding the raw materials purchased. In this case, the calculation would be: $100,000 (beginning raw materials inventory) + $990,000 (raw materials purchased) - $120,000 (ending raw materials inventory) = $970,000. Therefore, the correct answer is $970,000.Rate this question:
-
- 4.
Touch labor is another term used interchangeably with:
- A.
Administrative salaries
- B.
Indirect labor
- C.
Direct labor
- D.
Independent contractor
Correct Answer
C. Direct laborExplanation
Touch labor is a term used interchangeably with direct labor. Direct labor refers to the cost of labor that is directly involved in the production of goods or services. It includes the wages and benefits of employees who are directly working on the production line or directly contributing to the manufacturing process. Touch labor emphasizes the physical aspect of labor, where workers physically touch and handle the materials or products. Therefore, touch labor and direct labor both refer to the same concept of labor costs directly associated with production activities.Rate this question:
-
- 5.
A cost that is incurred by the firm that is not a merchandise cost is called a(n):
- A.
Product cost
- B.
None of these answers is correct.
- C.
Period cost
- D.
Inventoriable cost
Correct Answer
C. Period costExplanation
A period cost is a cost that is incurred by the firm that is not directly related to the production or purchase of merchandise. It includes expenses such as rent, utilities, salaries, and advertising. These costs are not directly tied to the production process and are instead incurred over a specific period of time, such as a month or a year. Period costs are expensed in the period in which they are incurred rather than being added to the cost of inventory.Rate this question:
-
- 6.
The procedures for identifying product costs for a service firm differ from a merchandiser or manufacturer because:
- A.
Manufacturers do not deal with the general public
- B.
Service firms use different advertising methods
- C.
Merchandisers have no inventory
- D.
Service firms have no inventory
Correct Answer
D. Service firms have no inventoryExplanation
Service firms differ from merchandisers or manufacturers in terms of identifying product costs because service firms do not have inventory. Unlike merchandisers and manufacturers who have physical products to sell, service firms offer intangible services to their customers. Therefore, the concept of inventory, which involves tracking and valuing physical goods, does not apply to service firms. Instead, service firms focus on determining the costs associated with providing their services, such as labor, overhead, and other expenses.Rate this question:
-
- 7.
The following information is available: Direct materials cost $100,000 Direct labor cost 120,000 Manufacturing overhead cost 270,000 Beginning work-in-process inventory 30,000 Ending work-in-process inventory 36,000 Beginning finished goods inventory 56,000 Ending finished goods inventory 48,000 Based on the above, the cost of goods manufactured was:
- A.
$492,000
- B.
$484,000
- C.
$100,000
- D.
None of these answers is correct.
Correct Answer
B. $484,000Explanation
The cost of goods manufactured can be calculated by adding the direct materials cost, direct labor cost, and manufacturing overhead cost, and then subtracting the beginning work-in-process inventory and adding the ending work-in-process inventory. In this case, the calculation would be: $100,000 + $120,000 + $270,000 - $30,000 + $36,000 = $484,000. Therefore, the correct answer is $484,000.Rate this question:
-
- 8.
When a product is sold, its cost is reflected by:
- A.
Reducing the cost of goods sold on the income statement
- B.
Increasing the cost of goods sold on the income statement
- C.
Increasing inventory on the balance sheet
- D.
None of these answers is correct.
Correct Answer
B. Increasing the cost of goods sold on the income statementExplanation
When a product is sold, its cost is reflected by increasing the cost of goods sold on the income statement. This is because the cost of goods sold represents the direct costs associated with producing the goods that were sold. By increasing the cost of goods sold, the income statement accurately reflects the expenses incurred in generating the revenue from the sale of the product.Rate this question:
-
- 9.
When goods have been completed and are transferred to finished goods, the account that will be debited is:
- A.
Finished Goods Inventory
- B.
Cost of Goods Manufactured
- C.
Cost of Goods Sold
- D.
Work-in-Process Inventory
Correct Answer
A. Finished Goods InventoryExplanation
When goods have been completed and are transferred to finished goods, the account that will be debited is Finished Goods Inventory. This is because Finished Goods Inventory represents the cost of goods that have been completed and are ready for sale. By debiting this account, the company recognizes the increase in the value of finished goods in its inventory.Rate this question:
-
- 10.
At what point do raw materials become a part of raw materials inventory?
- A.
When a product is complete and ready for sale
- B.
Never
- C.
Immediately after they have been purchased
- D.
As they are used in the production process
Correct Answer
C. Immediately after they have been purchasedExplanation
Raw materials become a part of raw materials inventory immediately after they have been purchased. This means that once the materials are acquired, they are recorded and accounted for as part of the inventory. This allows the company to keep track of the quantity and value of the raw materials they have on hand, which is important for production planning and cost management.Rate this question:
-
- 11.
When goods have been sold to customers, the entry to remove the goods from inventory will have a credit to:
- A.
Finished Goods Inventory
- B.
Cost of Goods Sold
- C.
Cost of Goods Manufactured
- D.
Work-in-Process Inventory
Correct Answer
A. Finished Goods InventoryExplanation
When goods have been sold to customers, the entry to remove the goods from inventory will have a credit to Finished Goods Inventory. This is because Finished Goods Inventory represents the cost of completed goods that are ready for sale. When these goods are sold, they are no longer part of the inventory and their cost needs to be removed from the balance sheet. By crediting Finished Goods Inventory, the account is reduced, reflecting the decrease in the value of the inventory.Rate this question:
-
- 12.
Any cost associated with the operation of a manufacturing facility that is not direct labor or direct materials is considered:
- A.
Finished goods inventory
- B.
Administrative cost
- C.
Merchandise inventory
- D.
Manufacturing overhead
Correct Answer
D. Manufacturing overheadExplanation
Manufacturing overhead refers to any cost associated with the operation of a manufacturing facility that is not directly related to labor or materials. This includes expenses such as rent, utilities, depreciation of equipment, and indirect labor costs. These costs are necessary for the production process but cannot be directly attributed to a specific product. Therefore, they are allocated to the overall manufacturing process and considered as manufacturing overhead.Rate this question:
-
- 13.
The following information is available: Beginning raw materials inventory $ 11,000 Ending raw materials inventory 13,000 Beginning work-in-process inventory 20,000 Ending work-in-process inventory 28,000 Beginning finished goods inventory 56,000 Ending finished goods inventory 48,000 Raw materials purchased 90,000 Cost of goods manufactured 229,000 Based on the above, the cost of goods sold was:
- A.
$98,000
- B.
$237,000
- C.
$317,000
- D.
None of these answers is correct.
Correct Answer
B. $237,000Explanation
The cost of goods sold can be calculated by adding the beginning inventory of finished goods to the cost of goods manufactured, and then subtracting the ending inventory of finished goods. In this case, the beginning finished goods inventory is $56,000, the cost of goods manufactured is $229,000, and the ending finished goods inventory is $48,000. Therefore, the cost of goods sold is $56,000 + $229,000 - $48,000 = $237,000.Rate this question:
-
- 14.
Depreciation taken on the desk located in the office of the controller is a(n):
- A.
Inventoriable cost
- B.
Period cost
- C.
Product cost
- D.
None of these answers is correct.
Correct Answer
B. Period costExplanation
Depreciation taken on the desk located in the office of the controller is considered a period cost. Period costs are expenses that are not directly tied to the production of goods or services, but rather are incurred over a specific period of time. In this case, the depreciation on the desk is not directly related to the production process or the creation of inventory, but rather it is an expense incurred over time for the use of the desk in the office. Therefore, it falls under the category of a period cost.Rate this question:
-
- 15.
A cost which would be included in inventory for any unsold products is:
- A.
The cost of purchasing the product
- B.
Advertising charges
- C.
Freight-out
- D.
Sales commissions paid
Correct Answer
A. The cost of purchasing the productExplanation
The cost of purchasing the product is included in inventory for any unsold products because it represents the actual cost incurred to acquire the goods. This cost includes the purchase price of the product, any discounts or allowances, and any other costs directly related to acquiring the product, such as transportation or import duties. By including the cost of purchasing the product in inventory, a company can accurately determine the value of its unsold goods and calculate the cost of goods sold when the products are eventually sold.Rate this question:
-
- 16.
If managers believe labor cost is insignificant, such cost can be:
- A.
Ignored
- B.
Treated as an operating cost of the business
- C.
Deferred until it is significant, at which point it can be treated as direct labor
- D.
Treated as an indirect labor cost
Correct Answer
D. Treated as an indirect labor costExplanation
If managers believe that labor cost is insignificant, they may choose to treat it as an indirect labor cost. Indirect labor costs are those that are not directly tied to the production of goods or services, such as administrative or support staff salaries. By treating labor cost as an indirect cost, managers can allocate it to various departments or overhead expenses rather than directly attributing it to the production process. This allows them to focus on other more significant costs and prioritize resources accordingly.Rate this question:
-
- 17.
Another term used to describe manufacturing overhead is:
- A.
Factory overhead
- B.
Factory burden
- C.
Overhead
- D.
All of these answers are correct.
Correct Answer
D. All of these answers are correct.Explanation
The term "manufacturing overhead" refers to indirect costs incurred during the production process, such as rent, utilities, and maintenance. These costs are also referred to as "factory overhead" or "factory burden." Additionally, "overhead" is a general term that encompasses all indirect costs in manufacturing. Therefore, all of the given answers are correct as they are different ways to describe the same concept.Rate this question:
-
- 18.
Raw materials that are used in the production process can be considered:
- A.
Direct materials only
- B.
Administrative use only
- C.
Indirect materials only
- D.
Either direct or indirect materials
Correct Answer
D. Either direct or indirect materialsExplanation
Raw materials that are used in the production process can be considered either direct or indirect materials. Direct materials are those that are directly involved in the production of a product and can be easily traced to it, such as raw materials used in manufacturing a car. Indirect materials, on the other hand, are not directly involved in the production process but are still necessary for the operation of the business, such as office supplies or maintenance tools. Therefore, raw materials can fall into either category depending on their role in the production process.Rate this question:
-
- 19.
The following information is available: Direct material cost $20,000 Direct labor cost 30,000 Manufacturing overhead cost 40,000 Beginning raw materials inventory 10,000 Ending raw materials inventory 12,000 Beginning work-in-process inventory 27,000 Ending work-in-process inventory 30,000 Beginning finished goods inventory 56,000 Ending finished goods inventory 48,000 Based on the above, the cost of goods manufactured was:
- A.
$90,000
- B.
$18,000
- C.
$117,000
- D.
None of these answers is correct.
Correct Answer
C. $117,000Explanation
To calculate the cost of goods manufactured, we can use the following formula:
Cost of Goods Manufactured = Direct Materials Cost + Direct Labor Cost + Manufacturing Overhead Cost + Beginning Work-in-Process Inventory - Ending Work-in-Process Inventory
Given the information provided:
Direct material cost = $20,000 Direct labor cost = $30,000 Manufacturing overhead cost = $40,000 Beginning work-in-process inventory = $27,000 Ending work-in-process inventory = $30,000
Plugging these values into the formula:
Cost of Goods Manufactured = $20,000 + $30,000 + $40,000 + $27,000 - $30,000 Cost of Goods Manufactured = $20,000 + $30,000 + $40,000 + $27,000 - $30,000 Cost of Goods Manufactured = $117,000
Therefore, the cost of goods manufactured is $117,000.Rate this question:
-
- 20.
The following information is available: Assembly line labor costs $175,000 Factory supplies used 4,000 Depreciation on factory 22,000 Depreciation on administrative equipment 9,000 Sales salaries 78,000 Factory security guard cost 33,000 Sales office security guard cost 28,000 Based on the above, cost of factory overhead was:
- A.
$349,000
- B.
$174,000
- C.
$59,000
- D.
None of these answers is correct.
Correct Answer
C. $59,000Explanation
The cost of factory overhead can be calculated by adding up the depreciation on factory ($22,000), depreciation on administrative equipment ($9,000), and factory security guard cost ($33,000). Therefore, the cost of factory overhead is $22,000 + $9,000 + $33,000 = $59,000.Rate this question:
-
- 21.
For a merchandising firm, product costs includes all of the following items except:
- A.
Freight-in costs
- B.
Merchandise packaging
- C.
Advertising expense
- D.
The cost of the merchandise itself
Correct Answer
C. Advertising expenseExplanation
Product costs for a merchandising firm include all costs directly related to the production and acquisition of merchandise, such as freight-in costs, merchandise packaging, and the cost of the merchandise itself. Advertising expense, on the other hand, is not directly related to the production or acquisition of merchandise, but rather to the promotion and marketing of the products. Therefore, advertising expense is not included in product costs for a merchandising firm.Rate this question:
-
- 22.
When goods have been completed and are transferred to finished goods, the account that will be credited is:
- A.
Cost of Goods Sold
- B.
Work-in-Process Inventory
- C.
Cost of Goods Manufactured
- D.
Finished Goods Inventory
Correct Answer
B. Work-in-Process InventoryExplanation
When goods have been completed and are transferred to finished goods, the account that will be credited is the Work-in-Process Inventory. This is because the Work-in-Process Inventory account represents the cost of partially completed goods, and when these goods are completed, their cost is transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account. The Cost of Goods Sold account is used when the goods are sold to customers, not when they are transferred to finished goods. The Cost of Goods Manufactured account represents the total cost of goods produced during a specific period, but it is not directly involved in the transfer of completed goods to finished goods.Rate this question:
-
- 23.
If the production process is considered reality, work-in-process inventory is considered:
- A.
A measurement of reality
- B.
Reality
- C.
A theoretical concept which has nothing to do with accounting
- D.
None of these answers is correct.
Correct Answer
A. A measurement of realityExplanation
The answer "a measurement of reality" suggests that work-in-process inventory is a tangible representation of the production process. It implies that work-in-process inventory is a quantifiable measure of the actual goods or materials that are in the process of being produced. This explanation implies that work-in-process inventory is a real and tangible component of the production process.Rate this question:
-
- 24.
An example of a product cost is:
- A.
Advertising charges
- B.
Sales commissions paid
- C.
Freight-in
- D.
Freight-out
Correct Answer
C. Freight-inExplanation
Freight-in is considered an example of a product cost because it is directly related to the cost of acquiring or producing a product. Freight-in refers to the transportation costs incurred when bringing raw materials or goods into the company's premises. These costs are necessary for the production process and are directly attributable to the product's cost. Therefore, freight-in is classified as a product cost rather than an operating expense like advertising charges or sales commissions paid.Rate this question:
-
- 25.
The cost of delivering an item to a customer is classified as a(n):
- A.
Inventory cost
- B.
Manufacturing cost
- C.
Product cost
- D.
Selling cost
Correct Answer
D. Selling costExplanation
The cost of delivering an item to a customer is classified as a selling cost because it is directly related to the sales process. This cost includes expenses such as transportation, packaging, and any other costs incurred in getting the product to the customer. Selling costs are considered as part of the overall cost of sales and are essential for businesses to deliver their products to customers efficiently.Rate this question:
-
Quiz Review Timeline +
Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.
-
Current Version
-
Feb 14, 2024Quiz Edited by
ProProfs Editorial Team -
Apr 24, 2011Quiz Created by
Amphib2007
Management Financial And Cost Accounting MCQs With Answers
Management Financial And Cost Accounting MCQs With Answers
SAP S/4HANA for Financial Accounting Associates - Mini
SAP S/4HANA for Financial Accounting Associates - Mini
- Advertising Quizzes
- Agriculture Quizzes
- Automotive Quizzes
- Brand Quizzes
- Business Accounting Quizzes
- Business Analyst Quizzes
- Business Development Quizzes
- Business Environment Quizzes
- Business Etiquette Quizzes
- Business Finance Quizzes
- Business Math Quizzes
- Business Organization Quizzes
- Business Plan Quizzes
- Business Process Quizzes
- Business Study Quizzes
- Business Technology Quizzes
- CEO Quizzes
- Collaboration Quizzes
- Company Quizzes
- Construction Quizzes
- Consumer Quizzes
- CSR Quizzes
- Customer Quizzes
- Customer Service Quizzes
- Development Quizzes
- Ecommerce Quizzes
- Employment Quizzes
- Entrepreneurship Quizzes
- Hospitality Quizzes
- Human Resources Quizzes
- Industry Quizzes
- International Business Quizzes
- Introduction To Business Quizzes
- Investment Quizzes
- Logistics Quizzes
- Manufacturing Quizzes
- Material Quizzes
- Media Quizzes
- Office Quizzes
- Organization Quizzes
- Principles Of Business Quizzes
- Printing Quizzes
- Product Quizzes
- Publishing Quizzes
- Real Estate Quizzes
- Retail Quizzes
- SAP Business One Quizzes
- Small Business Quizzes
- Source Quizzes
- Supply Quizzes
- Survey Quizzes
- Telecommunication Quizzes
- Trade Quizzes
- Training Quizzes
- Transportation Quizzes
- Warehouse Quizzes
- Welding Quizzes
Back to top