Question 1

In the financial statements,Materials should be categorized as:
A)Revenue.
B)Expenses.
C)Assets.
D)Liabilities.

Accepted Answer

Materials are assets because they are items that a business owns and can be used in the production of goods or services, and their value can be measured in monetary terms.

Question 2

The term "prime cost" refers to:
A)The sum of direct labor costs and all factory overhead costs.
B)The sum of direct material costs and direct labor costs.
C)All costs associated with manufacturing other than direct labor costs and direct material costs.
D)Manufacturing costs incurred to produce units of output.

Accepted Answer

Prime cost is the sum of direct material costs and direct labor costs. This does not include any overhead costs associated with manufacturing.

Question 3

Which of the following is most likely to be considered an indirect material in the manufacture of a sofa?
A)Lumber
B)Glue
C)Fabric
D)Foam rubber

Accepted Answer

Glue is considered an indirect material because it is used in the manufacturing process but does not become a major part of the final product. Unlike lumber, fabric, and foam rubber, which are direct materials and integral to the structure and comfort of the sofa, glue is used to bind these materials together in smaller quantities.

Question 4

The Lauren Company's payroll summary showed the following in November:  What amount would be included in direct labor in November?
A)$25,000
B)$80,000
C)$45,000
D)$140,000

Accepted Answer

The answer of The Lauren Company's payroll summary showed the...

Question 5

A(n)__________ requires estimating inventory balances during the year for interim financial statements and a formal count of all inventory items at the end of the year.
A)periodic inventory system
B)inventory control account
C)perpetual inventory system
D)inventory cost method

Accepted Answer

A periodic inventory system involves taking physical inventory counts periodically (such as at the end of the year) and estimating inventory balances during the year for financial reporting purposes. The other options (B, C, and D) are not directly related to this process.

Question 6

For a manufacturer,the total cost of manufactured goods completed but still on hand is:
A)Merchandise Inventory.
B)Finished Goods.
C)Work in Process.
D)Raw Materials.

Accepted Answer

Finished Goods are goods that have been completely manufactured but have not yet been sold. They are ready to be sold and are included in a manufacturer's inventory as an asset.

Question 7

The wages of which of the following employees would not be included in the product cost for a manufacturer of custom-built home cooking appliances?
A)shipping clerk
B)appliance body welder
C)factory janitor
D)shop floor supervisor

Accepted Answer

The wages of a shipping clerk would not be included in the product cost as they are not directly involved in the manufacturing process of the custom-built home cooking appliances.

Question 8

The balance in Electric Industries' Finished Goods account at December 31 was $325,000.Its December cost of goods manufactured was $1,350,000,its total manufacturing costs were $1,500,000 and its cost of goods sold in December was $1,455,000.What was the balance in Electric's Finished Goods at December 1?
A)$280,000
B)$220,000
C)$370,000
D)$430,000

Accepted Answer

The answer of The balance in Electric Industries' Finished Goods...

Question 9

Factory overhead includes:
A)Indirect labor but not indirect materials.
B)Indirect materials but not indirect labor.
C)All manufacturing costs,except indirect materials and indirect labor.
D)All manufacturing costs,except direct materials and direct labor.

Accepted Answer

Factory overhead includes all manufacturing costs except direct materials and direct labor, which means it encompasses both indirect materials and indirect labor.

Question 10

Chen Corp.had finished goods inventory of $60,000 and $70,000 at May 1 and May 31,respectively,and cost of goods manufactured of $175,000.Cost of goods sold in May was:
A)$165,000
B)$175,000
C)$185,000
D)$225,000

Accepted Answer

Cost of goods sold = Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory
= $175,000 + $60,000 - $70,000
= $165,000

Question 11

Factory overhead includes:
A)Wages of office clerk.
B)Sales manager's salary.
C)Supervisor's salary.
D)Tax accountant's salary.

Accepted Answer

Factory overhead is the costs associated with running a factory or manufacturing operation. The supervisor's salary is directly related to the production process and is therefore considered a factory overhead cost. The wages of an office clerk, a sales manager, and a tax accountant are not directly related to the production process, so they would not be included in factory overhead.

Question 12

Witt Company maintains a continuous record of purchases,materials issued into production and balances of all goods in stock,so that inventory valuation data is available at any time.This is an example of a(n)
A)perpetual inventory system.
B)inventory control account.
C)periodic inventory system.
D)inventory cost method.

Accepted Answer

Witt Company's system of maintaining a continuous record of purchases and inventory balances is characteristic of a perpetual inventory system.

Question 13

The following data are from Burton Corporation,a manufacturer,for the month of September:  ​ Total prime costs are:
A)$354,000
B)$145,000
C)$345,000
D)$256,000

Accepted Answer

According to the given data, direct materials cost is $150,000 and direct labor cost is $195,000. Therefore, total prime costs are:
$150,000 + $195,000 = $345,000. 
Hence, the answer is C.

Question 14

The Shiplett Company's payroll summary showed the following in November:  What is total factory overhead for November?
A)$250,000
B)$200,000
C)$80,000
D)$40,000

Accepted Answer

The answer of The Shiplett Company's payroll summary showed the...

Question 15

The following data were taken from Mansfield Merchandisers on January 31:  What was the Cost of goods sold in January?
A)$595,000
B)$660,000
C)$630,000
D)$545,000

Accepted Answer

The answer of The following data were taken from Mansfield...

Question 16

For a manufacturer,manufacturing costs incurred to date for goods in various stages of production,but not yet completed is:
A)Merchandise Inventory.
B)Finished Goods.
C)Work in Process.
D)Raw Materials.

Accepted Answer

Work in Process refers to products that are currently in the manufacturing process, but are not yet completed. It includes the manufacturing costs that have been incurred to date for these products, such as direct materials, direct labor, and factory overhead. Merchandise Inventory refers to finished products that are ready for sale, while Finished Goods is inventory that has completed production and is awaiting sale. Raw Materials are the materials that have been purchased but have not yet been used in the manufacturing process.

Question 17

A typical factory overhead cost is:
A)Freight out.
B)Stationery and printing.
C)Depreciation on machinery and equipment.
D)Postage.

Accepted Answer

Depreciation on machinery and equipment is a common factory overhead cost as it is necessary to allocate the cost of the machinery and equipment used in production over time. Freight out, stationery and printing, and postage are more likely to be classified as operating expenses.

Question 18

Umberg Merchandise Company's cost of goods sold last month was $1,450,000.Merchandise Inventory at the beginning of the month was $250,000 and $325,000 at the end of the month.Umberg's merchandise purchases were:
A)$1,450,000
B)$1,375,000
C)$1,525,000
D)$1,775,000

Accepted Answer

To find the merchandise purchases, use the formula: Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold. Plugging in the values: $250,000 + Purchases - $325,000 = $1,450,000. Solving for Purchases gives $1,525,000.

Question 19

For a manufacturer,the cost of all materials purchases and on hand to be used in the manufacturing process is:
A)Merchandise Inventory.
B)Finished Goods.
C)Work in Process.
D)Raw Materials.

Accepted Answer

The cost of all materials purchases and on hand to be used in the manufacturing process is known as Raw Materials.

Question 20

Inventory accounts for a manufacturer include all of the following except:
A)Merchandise Inventory.
B)Finished Goods.
C)Work in Process.
D)Raw Materials.

Accepted Answer

Merchandise inventory is typically an account used by retailers or wholesalers, not manufacturers. Manufacturers would have accounts for raw materials, work in process, and finished goods inventory.

Quiz 1: Introduction to Cost Accounting

In the financial statements,Materials should be categorized as:

The term "prime cost" refers to:

Which of the following is most likely to be considered an indirect material in the manufacture of a sofa?

The Lauren Company's payroll summary showed the following in November: What amount would be included in direct labor in November?

A(n) __________ requires estimating inventory balances during the year for interim financial statements and a formal count of all inventory items at the end of the year.

For a manufacturer,the total cost of manufactured goods completed but still on hand is:

The wages of which of the following employees would not be included in the product cost for a manufacturer of custom-built home cooking appliances?

Factory overhead includes:

Chen Corp.had finished goods inventory of $60,000 and $70,000 at May 1 and May 31,respectively,and cost of goods manufactured of $175,000.Cost of goods sold in May was:

Factory overhead includes:

Witt Company maintains a continuous record of purchases,materials issued into production and balances of all goods in stock,so that inventory valuation data is available at any time.This is an example of a(n)

The following data are from Burton Corporation,a manufacturer,for the month of September: Total prime costs are:

The Shiplett Company's payroll summary showed the following in November: What is total factory overhead for November?

The following data were taken from Mansfield Merchandisers on January 31: What was the Cost of goods sold in January?

For a manufacturer,manufacturing costs incurred to date for goods in various stages of production,but not yet completed is:

A typical factory overhead cost is:

Umberg Merchandise Company's cost of goods sold last month was $1,450,000.Merchandise Inventory at the beginning of the month was $250,000 and $325,000 at the end of the month.Umberg's merchandise purchases were:

For a manufacturer,the cost of all materials purchases and on hand to be used in the manufacturing process is:

Inventory accounts for a manufacturer include all of the following except:

Quiz 1: Introduction to Cost Accounting

In the financial statements,Materials should be categorized as:

The term "prime cost" refers to:

Which of the following is most likely to be considered an indirect material in the manufacture of a sofa?

The Lauren Company's payroll summary showed the following in November: What amount would be included in direct labor in November?

A(n) __________ requires estimating inventory balances during the year for interim financial statements and a formal count of all inventory items at the end of the year.

For a manufacturer,the total cost of manufactured goods completed but still on hand is:

The wages of which of the following employees would not be included in the product cost for a manufacturer of custom-built home cooking appliances?

Factory overhead includes:

Chen Corp.had finished goods inventory of $60,000 and $70,000 at May 1 and May 31,respectively,and cost of goods manufactured of $175,000.Cost of goods sold in May was:

Factory overhead includes:

Witt Company maintains a continuous record of purchases,materials issued into production and balances of all goods in stock,so that inventory valuation data is available at any time.This is an example of a(n)

The following data are from Burton Corporation,a manufacturer,for the month of September: ​ Total prime costs are:

The Shiplett Company's payroll summary showed the following in November: What is total factory overhead for November?

The following data were taken from Mansfield Merchandisers on January 31: What was the Cost of goods sold in January?

For a manufacturer,manufacturing costs incurred to date for goods in various stages of production,but not yet completed is:

A typical factory overhead cost is:

Umberg Merchandise Company's cost of goods sold last month was $1,450,000.Merchandise Inventory at the beginning of the month was $250,000 and $325,000 at the end of the month.Umberg's merchandise purchases were:

For a manufacturer,the cost of all materials purchases and on hand to be used in the manufacturing process is:

Inventory accounts for a manufacturer include all of the following except:

The following data are from Burton Corporation,a manufacturer,for the month of September: Total prime costs are: