Question 1

Nearly _____ of U.S. economic activity is represented by services.
A)40%
B)50%
C)60%
D)80%

Accepted Answer

The services sector represents about 80% of U.S. economic activity, highlighting the significant role services play in the economy.

Question 2

The cost of goods sold for Michaels Manufacturing in the current year was $233,000. The January 1 finished goods inventory balance was $31,600, and the December 31 finished goods inventory balance was $24,200. Cost of goods manufactured during the period was
A)$233,000
B)$225,600
C)$288,800
D)$240,400

Accepted Answer

Cost of goods manufactured = Beginning finished goods inventory + Cost of goods manufactured - Ending finished goods inventory
C.O.G.M. = $31,600 + C.O.G.M. - $24,200 
C.O.G.M. = $233,000 - $7,400 
C.O.G.M. = $225,600

Question 3

In the hotel industry, the occupancy rate is a measure of
A)risk
B)solvency
C)profitability
D)utilization

Accepted Answer

The occupancy rate in the hotel industry measures the utilization of available rooms, indicating the percentage of rooms occupied over a specific period.

Question 4

Match each description below to the appropriate phase of the manufacturing process (a-e).
-Monitoring the operating results of implemented plans and comparing actual results to expected results
A)Planning
B)Directing
C)Controlling
D)Improving
E)Decision making

Accepted Answer

Controlling is the management phase that involves monitoring the operating results of implemented plans and comparing the actual results against the expected results to ensure that objectives are achieved. This phase is crucial for identifying deviations from the plan and initiating corrective actions.

Question 5

Match the items below for a lawn mower manufacturer to the type of cost (a-d).
-Grease for wheel axles
A)Direct materials
B)Direct labor
C)Factory overhead
D)Nonmanufacturing cost

Accepted Answer

Grease for wheel axles is considered factory overhead because it is an indirect cost that cannot be directly traced to the production of a specific lawn mower.

Question 6

Match each description below to the appropriate phase of the manufacturing process (a-e).
-Used by management to develop the organization's objectives and goals
A)Planning
B)Directing
C)Controlling
D)Improving
E)Decision making

Accepted Answer

Planning is the phase where management sets the organization's objectives and goals, outlining how to achieve them.

Question 7

A company sells goods for $150,000 that cost $54,000 to manufacture. Which of the following statements is true?
A)The company will recognize sales on the balance sheet of $150,000.
B)The company will recognize $96,000 in gross profit on the balance sheet.
C)The company will decrease finished goods by $54,000.
D)The company will increase finished goods by $54,000.

Accepted Answer

The cost of goods sold (COGS), which in this case is $54,000, will be removed from the finished goods inventory, leading to a decrease in the finished goods account on the balance sheet. Sales and gross profit are recognized on the income statement, not the balance sheet.

Question 8

Match the items below for a lawn mower manufacturer to the type of cost (a-d).
-Wages of assemblers
A)Direct materials
B)Direct labor
C)Factory overhead
D)Nonmanufacturing cost

Accepted Answer

Wages of assemblers are considered direct labor because they are directly involved in the production of the lawn mowers, making it easy to trace these costs to the manufacturing process.

Question 9

Work in process inventory increased by $20,000 during the current year. Cost of goods manufactured was $180,000. Total manufacturing costs incurred are
A)$198,000
B)$160,000
C)$189,000
D)$200,000

Accepted Answer

The answer of Work in process inventory increased by $20,000...

Question 10

Match each description below to the appropriate phase of the manufacturing process (a-e).
-Process by which managers run day-to-day operations
A)Planning
B)Directing
C)Controlling
D)Improving
E)Decision making

Accepted Answer

Directing is the phase in the management process where managers guide, lead, and oversee the day-to-day operations of the organization, ensuring that the activities of all personnel align with the organization's goals and plans.

Question 11

Work in process inventory on December 31 is $42,000. Work in process inventory decreased by 40% during the year. Total manufacturing costs incurred amount to $260,000. The cost of goods manufactured is
A)$232,000
B)$302,000
C)$288,000
D)$190,000

Accepted Answer

The answer of Work in process inventory on December 31...

Question 12

SunnyRest Hotel has 300 rooms. During the month of March, it had 7,200 guests, each staying a single night. The occupancy rate for SunnyRest Hotel for the month of March was closest to
A)70%
B)80%
C)90%
D)120%

Accepted Answer

The occupancy rate is calculated by dividing the total number of guest stays by the total possible stays (rooms x days in the month) and then multiplying by 100 to get a percentage. March has 31 days, so the total possible stays are 300 rooms * 31 days = 9,300 stays. The occupancy rate is (7,200 / 9,300) * 100 ≈ 77.42%, which is closest to 80%.

Question 13

Which of the following will not be found on the balance sheet of a manufacturing company?
A)cost of goods sold
B)materials
C)work in process
D)finished goods

Accepted Answer

Cost of goods sold is an expense account that is reported on the income statement. The balance sheet of a manufacturing company will include assets such as materials, work in process, and finished goods.

Question 14

Match the items below for a lawn mower manufacturer to the type of cost (a-d).
-Wheels
A)Direct materials
B)Direct labor
C)Factory overhead
D)Nonmanufacturing cost

Accepted Answer

Wheels are considered direct materials because they are a primary component that can be directly traced to the finished product.

Question 15

Cost of goods manufactured during the year is $240,000, and work in process inventory on December 31 is $50,000. Work in process inventory during the year decreased by 60%. Total manufacturing costs incurred are
A)$190,000
B)$165,000
C)$290,000
D)$315,000

Accepted Answer

The answer of Cost of goods manufactured during the year...

Question 16

Match each description below to the appropriate phase of the manufacturing process (a-e).
-Used by managers for continuous improvement
A)Planning
B)Directing
C)Controlling
D)Improving
E)Decision making

Accepted Answer

The answer of Match each description below to the appropriate...

Question 17

Match each description below to the appropriate phase of the manufacturing process (a-e).
-Managers must decide how to respond to unfavorable performances
A)Planning
B)Directing
C)Controlling
D)Improving
E)Decision making

Accepted Answer

The answer of Match each description below to the appropriate...

Question 18

ShadyPalms Hotel has 100 rooms. During the month of February, it had 500 guests, each staying 5 nights. The occupancy rate for ShadyPalms Hotel for the month of February (not a leap year) was closest to
A)70%
B)80%
C)90%
D)120%

Accepted Answer

The total room nights available in February (28 days) is 100 rooms * 28 nights = 2800 room nights. The total room nights occupied is 500 guests * 5 nights = 2500 room nights. The occupancy rate is (2500/2800) * 100% = 89.29%, which is closest to 90%.

Question 19

Work in process inventory on December 31 of the current year is $44,000. Work in process inventory increased by 60% during the year. Cost of goods manufactured amounts to $275,000. The total manufacturing costs incurred in the current year are
A)$291,500
B)$302,000
C)$275,750
D)$233,750

Accepted Answer

Work in process inventory increased by 60% during the year, so the beginning work in process inventory was $44,000 / (1 + 60%) = $27,500. The total manufacturing costs incurred in the current year are the cost of goods manufactured plus the change in work in process inventory, which is $275,000 + $44,000 - $27,500 = $291,500.

Question 20

Match the items below for a lawn mower manufacturer to the type of cost (a-d).
-Depreciation on worker's tools
A)Direct materials
B)Direct labor
C)Factory overhead
D)Nonmanufacturing cost

Accepted Answer

Depreciation on worker's tools is considered a factory overhead cost because it is an indirect cost associated with manufacturing the product but cannot be directly traced to the production of a specific product.

Quiz 15: Introduction to Managerial Accounting

Nearly _____ of U.S. economic activity is represented by services.

The cost of goods sold for Michaels Manufacturing in the current year was $233,000. The January 1 finished goods inventory balance was $31,600, and the December 31 finished goods inventory balance was $24,200. Cost of goods manufactured during the period was

In the hotel industry, the occupancy rate is a measure of

Match each description below to the appropriate phase of the manufacturing process (a-e). -Monitoring the operating results of implemented plans and comparing actual results to expected results A)Planning B)Directing C)Controlling D)Improving E)Decision making

Match the items below for a lawn mower manufacturer to the type of cost (a-d). -Grease for wheel axles A)Direct materials B)Direct labor C)Factory overhead D)Nonmanufacturing cost

Match each description below to the appropriate phase of the manufacturing process (a-e). -Used by management to develop the organization's objectives and goals A)Planning B)Directing C)Controlling D)Improving E)Decision making

A company sells goods for $150,000 that cost $54,000 to manufacture. Which of the following statements is true?

Match the items below for a lawn mower manufacturer to the type of cost (a-d). -Wages of assemblers A)Direct materials B)Direct labor C)Factory overhead D)Nonmanufacturing cost

Work in process inventory increased by $20,000 during the current year. Cost of goods manufactured was $180,000. Total manufacturing costs incurred are

Match each description below to the appropriate phase of the manufacturing process (a-e). -Process by which managers run day-to-day operations A)Planning B)Directing C)Controlling D)Improving E)Decision making

Work in process inventory on December 31 is $42,000. Work in process inventory decreased by 40% during the year. Total manufacturing costs incurred amount to $260,000. The cost of goods manufactured is

SunnyRest Hotel has 300 rooms. During the month of March, it had 7,200 guests, each staying a single night. The occupancy rate for SunnyRest Hotel for the month of March was closest to

Which of the following will not be found on the balance sheet of a manufacturing company?

Match the items below for a lawn mower manufacturer to the type of cost (a-d). -Wheels A)Direct materials B)Direct labor C)Factory overhead D)Nonmanufacturing cost

Cost of goods manufactured during the year is $240,000, and work in process inventory on December 31 is $50,000. Work in process inventory during the year decreased by 60%. Total manufacturing costs incurred are

Match each description below to the appropriate phase of the manufacturing process (a-e). -Used by managers for continuous improvement A)Planning B)Directing C)Controlling D)Improving E)Decision making

Match each description below to the appropriate phase of the manufacturing process (a-e). -Managers must decide how to respond to unfavorable performances A)Planning B)Directing C)Controlling D)Improving E)Decision making

ShadyPalms Hotel has 100 rooms. During the month of February, it had 500 guests, each staying 5 nights. The occupancy rate for ShadyPalms Hotel for the month of February (not a leap year) was closest to

Work in process inventory on December 31 of the current year is $44,000. Work in process inventory increased by 60% during the year. Cost of goods manufactured amounts to $275,000. The total manufacturing costs incurred in the current year are

Match the items below for a lawn mower manufacturer to the type of cost (a-d). -Depreciation on worker's tools A)Direct materials B)Direct labor C)Factory overhead D)Nonmanufacturing cost