accounting exam

Question 1

A debit balance in the manufacturing overhead account at the end of the period indicates that:

manufacturing overhead is overapplied.

manufacturing overhead is underapplied.

manufacturing overhead has been accurately applied.

None of the above.

Question 2

The three sections of a statement of cost of goods manufactured include:

raw material, direct labor, manufacturing overhead.

variable expenses, contribution margin, fixed expenses.

sales revenue, gross profit, selling and administrative expenses.

direct costs, indirect costs, operating profit.

Question 3

The predetermined overhead application rate based on direct labor hours is computed as:

actual total overhead costs divided by actual direct labor hours.

estimated total overhead costs divided by estimated direct labor hours.

actual total overhead costs divided by estimated direct labor hours.

estimated total overhead costs divided by actual direct labor hours.

Question 4

Direct costing may be used for:

internal reporting purposes.
external financial reporting purposes.
income tax reporting purposes.
		all of the above.

Question 5

Which of the following items would not be reported on the statement of cost of goods manufactured?

	Cost of goods sold.
Purchases.
Total manufacturing costs.
Contribution margin.

Question 6

The production cost of a single unit of a manufactured product is determined by:

dividing total direct materials and direct labor for a production run by the number of units made.

dividing total direct materials, direct labor, and manufacturing overhead for a production run by the number of units made.

dividing total direct materials, direct labor, manufacturing overhead and selling expenses for a production run by the number of units made.

dividing the selling price by the gross profit ratio.

Question 7

The three components of product costs are:

direct material, supervisor salaries, selling expenses.

direct labor, manufacturing overhead, indirect material.

direct material, direct labor, manufacturing overhead.

manufacturing overhead, indirect material, indirect labor.

Question 8

Cost accounting is a subset of:

financial accounting.

process cost accounting.

job order cost accounting.

managerial accounting.

Question 9

Common costs pertain to costs that:

are directly traceable to a cost object.

are not directly traceable to a cost object.

are commonly incurred.

are direct costs.

Question 10

The term “cost” means:

all of the above.

the price paid for a raw material.

the wage paid to a worker.

the price charged by an entity for its services.

Question 11

An excess of cost of goods manufactured over cost of goods sold for the period represents:

an increase in gross profit.

a decrease in work in process inventory.

overapplied manufacturing overhead.

an increase in finished goods inventory.

Question 12

An example of a product cost is:

advertising expense for the product.

a portion of the president’s travel expenses.

interest expense on a loan to finance inventory.

production line maintenance costs.

Question 13

Costs may be allocated to a product or activity for many purposes, but care must be exercised when using allocated costs because:

direct costs identified with the product or activity may not be accurately assigned.

fixed costs will change in total if the volume of activity changes.

all costs may not have been allocated to the product or activity.

arbitrarily allocated costs may not behave in the way assumed in the allocation method.

Question 14

Which of the following is more relevant to management accounting than to cost accounting?

Accumulation and determination of product or service cost.

Income measurement and inventory valuation.

Generally accepted accounting principles.

Providing managers information for planning and control purposes.

Question 15

Which of the following is NOT an inventory account for a manufacturing company?

Cost of goods sold.

Work-in-process.

Raw materials.

Finished goods.

Question 16

Which of the following activities is not included in the organization’s value chain?

Marketing.

Finance.

Customer service.

Research and development.

Question 17

The overhead component of product cost is:

the sum of the actual overhead costs incurred in the manufacture of the product.

likely to be the same amount for every product made by the company.

an estimated amount based on labor hours, machine hours, or some other activity.

determined at the end of the year when actual costs and actual production are known.

Question 18

A predetermined overhead rate is used to:

keep track of actual overhead costs as they are incurred.

assign indirect costs to cost objects.

establish prices for manufactured products.

allocate selling and administrative expenses to manufactured products.

Question 19

For the partial value chain functions given below, which sequence is correct?

Design, production, marketing

Marketing, production, distribution

Research and development, production, distribution

Customer service, marketing, distribution

Question 20

Cost accounting is primarily concerned with:

all of the above.

accumulation and determination of product or service cost.

income measurement and inventory valuation.

generally accepted accounting principles.

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