1.

The cost management information system is primarily concerned with producing outputs for internal users using inputs and processes needed to satisfy management objectives.

True

False

2.

The Financial accounting information system provides information for three broad objectives: costing services and products, planning and control, and decision making.

True

False

3.

The value chain is the set of activities required to design, develop, produce, market, deliver and provide post-sales service for the products and services sold to customers.

True

False

4.

Cost management information benefits production, marketing, and customer service systems as well as being a crucial part of managerial decision making.

True

False

5.

Cost assignment is one of the key processes of the cost accounting system.

True

False

6.

The most precise of the three methods of cost assignment is direct tracing since it relies on observable causal relationships.

True

False

7.

Services differ from tangible products on three dimensions: intangibility, perishability, and inseparability.

True

False

8.

Intangible products are goods produced by converting raw material into finished products through the use of labor and capital inputs.

True

False

9

The income statement prepared for external parties is frequently referred to as absorption-costing income, or full costing income.

True

False

10.

The cost of goods sold is the cost of direct materials, direct labor and overhead attached to the units sold.

True

False

11.

Cost management systems can be broadly classified as traditional or activity based.

True

False

12.

The overall objective of an activity-based cost management system is to manage activities to reduce costs and improve customer value. True

False

13.

The overall objective of accounting information systems is to

a. prepare financial reports.

b. manage the organization.

c. report to the government.

d. provide information to users.

14.

The outputs of an accounting information system includes:

a. financial statements.

b. bill of lading report.

c. economic events.

d. value chain information.

15.

Which of the following statements is true of traceability?

a. It is used for investment decisions, stewardship evaluation, activity monitoring, and regulatory measures. b. It is the ability to assign a cost directly to a cost object in an economically feasible way by means of a causal re c. It is concerned with determining what activities should be performed by managers and assessing how well they d. It uses well-specified economic events as inputs, and its processes follow certain rules and conventions.

16.

Which of the following costs incurred by a chair manufacturer would be traced to the product cost through direct tracing? a. the depreciation on factory equipment

b. the insurance on the factory building

c. the woodworker's salary

d. the supervisor's salary

17.

During the month of January, Marcos & Henesey, Inc. had total manufacturing costs of $165,000. It incurred $62,000 of direct labor cost and $40,000 of manufacturing overhead cost during the month. If the materials inventory on January 1 was $5,800 less than the materials inventory on January 31, what was the cost of materials purchased during the month?

a. $68,800

b. $93,800

c. $58,000

d. $53,650

18.

All of Eva Enterprise's operations are housed in one building with the costs of occupying the building accumulated in a separate account. The total costs incurred in July amounted to $48,000. The company allocates these costs on the basis of square feet of floor space occupied. Administrative offices, sales offices, and factory operations occupy 9,000, 6,000, and 30,000 square feet, respectively. How much will be classified as a product cost for July?

a. $16,000

b. $9,600

c. $6,400

d. $32,000

19.

An example of a period cost is

a. insurance on factory equipment.

b. property taxes on factory building.

c. wages of factory custodians.

d. president's salary.

20.

Costs that are expensed in the period in which they are incurred are called:

a. Noninventoriable costs

b. Product costs

c. Direct materials costs

d. Inventoriable costs

21.

The following information pertains to Steel Wheels, Inc:

Cost of goods manufactured $350,000

Beginning work-in-process inventory 110,000

Ending work-in-process inventory 80,000

Manufacturing overhead 50,000

What are the prime costs for the year?

a. $480,000

b. $270,000

c. $300,000

d. $360,000

22.

Beginning work-in-process inventory is $188,000, ending work-in-process inventory is $220,000, cost of goods manufactured is $850,000, and direct materials used are $162,000. What are the conversion costs?

a. $688,000

b. $656,000

c. $720,000

d. $980,000

23.

The records of Bentler Shoppers, Inc. for December 2018 shows the following information:

Sales $2,050,000

Selling and administrative expenses 250,000

Direct materials purchases 205,000

Direct labor 298,000

Factory overhead 350,000

Direct materials, December 1 50,000

Work-in-process, December 1 85,000

Finished goods, December 1 64,000

Direct materials, December 31 41,000

Work-in-process, December 31 72,000

Finished goods, December 31 55,000

The net income for the month of December is:

a. $916,000.

b. $770,000.

c. $875,000.

d. $884,000.

24.

The merchandise inventory in a merchandising business corresponds most closely to which of the following items in a manufacturing firm? a. cost of goods manufactured

b. finished goods inventory

c. materials inventory

d. cost of goods available for sale

25.

Inventory balances for the Jameson Company in October 2018 are as follows:

October 1, 2018 October 31, 2018

Raw materials $ 27,000 $21,000

Work in process 48,000 37,200

Finished goods 108,000 90,000

During October, purchases of direct materials were $36,000. Direct labor and factory overhead costs were $60,000 and $84,000, respectively.

What is the cost of materials used in production?

a. $36,000

b. $54,000

c. $42,000

d. $47,800

26.

The sum of the total additions to work in process during a period is

a. material used.

b. total manufacturing costs added.

c. cost of goods manufactured.

d. factory overhead applied.

27.

Inventory balances for the Jameson Company in October 2018 are as follows:

October 1, 2018 October 31, 2018

Raw materials $ 27,000 $21,000

Work in process 48,000 37,200

Finished goods 108,000 90,000

During October, purchases of direct materials were $36,000. Direct labor and factory overhead costs were $60,000 and $84,000, respectively.

What is the cost of goods manufactured?

a. $180,000

b. $194,000

c. $186,000

d. $196,800

28.

The following information for the Sutton Glass Company has been provided:

Cost of goods manufactured $100,000

Work in process:

Beginning 15,000

Ending 20,000

Direct labor 30,000

Direct materials used ?

Factory overhead 45,000

What is the amount of direct materials used?

a. $30,000

b. $100,000

c. $25,000

d. $35,000

29.

Selected data concerning the past year's operations of the Motor City Corporation are as follows:

Selling and administrative expenses $225,000

Direct materials used 467,500

Direct labor (50,000 hours) 450,000

Factory overhead application rate 8 per DLH

Inventories

Beginning Ending

Direct material $75,000 $67,500

Work in process 112,500 135,000

Finished goods 60,000 37,500

The cost of direct materials purchased is

a. $437,500.

b. $460,000.

c. $445,000.

d. $467,500.

30.

Inventory balances for Spiritlight Ventures for November 2018 are as follows:

November 1, 2018 November 30, 2018

Materials $ 9,000 $ 7,000

Work in process 16,000 12,400

Finished goods 36,000 30,000

During November, purchases of direct materials were $18,000. Direct labor and factory overhead costs were $20,000 and $28,000, respectively.

The cost of goods manufactured in November was

a. $71,600.

b. $68,000.

c. $74,000.

d. $77,600.