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| 1 | |
Which of the following equations is used to calculate the cost of goods sold for the period? |
| | A) | Beginning finished goods inventory + cost of goods manufactured + ending finished goods inventory. |
| | B) | Cost of goods manufactured – ending finished goods inventory. |
| | C) | Beginning finished goods inventory + cost of goods manufactured – ending finished goods inventory. |
| | D) | Beginning finished goods inventory – cost of goods manufactured + ending finished goods inventory. |
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| 2 | |
Work in process inventory is composed of: |
| | A) | direct labour only |
| | B) | direct materials only |
| | C) | direct labour and manufacturing overhead |
| | D) | direct materials, direct labour and manufacturing overhead |
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| 3 | |
Watsonia Industries began March with a balance of $20 000 in the finished goods inventory. The finished goods inventory balance at the end of March was $25 000 and the cost of goods sold during March was $100 000. The cost of goods manufactured during March was: |
| | A) | $5000 |
| | B) | $95 000 |
| | C) | $105 000 |
| | D) | $120 000 |
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| 4 | |
The difference between direct and indirect costs depends on whether the cost: |
| | A) | is controllable or uncontrollable |
| | B) | is committed or discretionary |
| | C) | can be identified with, or traced to, a particular cost object in an economic manner |
| | D) | increases with increases in the level of activity |
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| 5 | |
Which of the following statements is true? A cost: |
| | A) | is always an expense |
| | B) | is always an asset |
| | C) | is always a liability |
| | D) | can be either an expense or an asset |
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| 6 | |
Steffi Blau, a recent accounting graduate was preparing the month-end financial statements for Decorative Drapes, a manufacturer of curtains and blinds. Steffi is using the accounting information from the general ledger system and she is trying to decide under what classification the following costs should be reported: Curtain fabric | 85 000 | Machinists’ wages | 25 000 | Cutters’ wages | 4000 | Thread | 60 | Sewing machine maintenance | 750 | Factory heating | 300 | Braid | 250 | Factory rent | 4000 | Sewing machine consumables | 35 | Machinists’ overtime | 6000 | Factory cleaners’ wages | 2000 |
Steffi has asked you, the Management Accountant, for your advice. To which of the following cost classifications should Steffi correctly assign the above costs? |
| | A) | Product costs. |
| | B) | Period costs. |
| | C) | Manufacturing overhead. |
| | D) | Direct materials. |
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| 7 | |
Which of the following employees of a motor vehicle manufacturer would be classified as direct labour? |
| | A) | Process operators. |
| | B) | Plant security guards. |
| | C) | Manufacturing manager. |
| | D) | Purchasing officers. |
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| 8 | |
When calculating the direct labour cost in Australia, you should include the following cost(s): |
| | A) | manager’s use of a company car |
| | B) | marketing director’s golf club membership fees |
| | C) | payroll tax, workers compensation insurance and employer contributions to superannuation funds paid by the business for the hourly wage personnel |
| | D) | meals provided free of charge in the executive dining room |
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| 9 | |
If the Assistant Management Accountant accidentally understated the accounting period’s marketing costs by $250 000 when preparing the firm’s financial statements, which of the following correctly states the impact of this understatement? |
| | A) | Cost of goods sold will be understated by $250 000. |
| | B) | Cost of goods sold will be overstated by $250 000. |
| | C) | Cost of goods manufactured and cost of goods sold will be understated by $250 000. |
| | D) | None of the given answers. |
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| 10 | |
Steffi Blau, a recent accounting graduate, was preparing the month-end financial statements for Decorative Drapes, a manufacturer of curtains and blinds. Steffi is using the accounting information from the general ledger system and she is trying to decide under what classification the following costs should be reported: Thread | 60 | Sewing machine maintenance | 750 | Factory heating | 300 | Factory rent | 4000 | Sewing machine consumables | 35 | Machinists’ overtime | 6000 | Factory cleaning wages | 2000 |
Steffi has asked you, the Management Accountant, for your advice. To which of the following cost classifications should Steffi correctly assign the above costs? |
| | A) | Direct costs. |
| | B) | Manufacturing overhead. |
| | C) | Direct materials. |
| | D) | Direct labour. |
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| 11 | |
Steffi Blau, a recent accounting graduate was preparing the month-end financial statements for Decorative Drapes, a manufacturer of curtains and blinds. Steffi is using the accounting information from the general ledger system and she is trying to decide under what classification the following costs should be reported: Sales manager’s salary | 4000 | Sales representatives’ salaries | 20 000 | Office manager’s salary | 3500 | Sales vehicle expenses – petrol | 4000 | Sales vehicle expenses – maintenance | 1200 | Management accountant’s salary | 3500 | Personal assistant’s salary | 2500 | Office supplies | 400 | Receptionist’s salary | 1500 | Office stationery | 250 | Graduate trainee accountant’s salary | 2500 |
Steffi has asked you, the Management Accountant, for advice. To which of the following cost classifications should Steffi correctly assign the above costs? |
| | A) | Product costs. |
| | B) | Direct product costs. |
| | C) | Inventoriable costs. |
| | D) | Period costs. |
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| 12 | |
The Merrimax Manufacturing Company reported a cost of goods manufactured of $290 000 and cost of goods sold of $320 000, with the company’s year-end balance sheet revealing work in process and finished goods of $30 000 and $89 000 respectively. If supplemental information disclosed $60 000 of direct materials used in production, $145 000 of direct labour and $55 000 of manufacturing overhead, the company’s beginning work in process balance must have been: |
| | A) | $30 000 |
| | B) | $59 000 |
| | C) | $60 000 |
| | D) | $89 000 |
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