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Accounting 526 Midterm Questions & answers
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Accounting 526 MidtermIdentify a true statement about the controller of an organization.
a.The controller has only indirect responsibility for an organization's basic objectives.
b.The controller participates in the decision-making activity of managerial accounting.
c.The controller has full authority over the managers in the production areas of an
organization.
d.The controller is a member of the middle-level management. - ANS-b.The controller
participates in the decision-making activity of managerial accounting.
Managers in line positions are the ones who: - ANS-implement the policies framed by
the top management team.
An organizational chart: - ANS-shows line and staff positions within an organization.
Accountants who hold a certificate that allows them to conduct expert work to determine
intentional errors and mistakes made in the financial statements are called: -
ANS-Certified Fraud Examiners.
Which of the following is a certification designed to meet the specific needs of
managerial accountants? - ANS-The Certificate in Management Accounting
Which of the following certifications do managerial accountants obtain?
a.The Certificate in Management Accounting
b.The Certificate in Public Accounting
c.The Certificate in Internal Auditing
d.All of these answer choices are correct. - ANS-d.All of these answer choices are
correct.
Which of the following is an example of a variable cost?
a.Cost of direct materials
b.Factory rent
c.Property tax
d.Depreciation on machinery - ANS-.Cost of direct materials
Cost allocation is: - ANS-the process of assigning indirect costs to cost objects.
Which of the following costs forms a part of prime cost as well as conversion cost?
,a.The cost of direct materials and direct labor
b.The cost of direct materials
c.Manufacturing overhead
d.The cost of direct labor - ANS-d.The cost of direct labor
During May, the cost of goods manufactured was $62,000. The beginning finished
goods inventory for the month was $25,000, and the ending finished goods inventory
was $30,000. What was the cost of goods sold for May?
a.$66,000
b.$117,000
c.$32,000
d.$57,000 - ANS-d.$57,000
62,000-30,000+25,000=57,000
the formula to calculate prime cost? - ANS-Prime Cost = Direct Materials + Direct Labor
The ending inventories of materials, work-in-process, and finished goods appear: -
ANS-as current assets on the balance sheet.
Which of the following items appear on the income statement of a service firm?
a.Manufacturing overhead
b.Cost of goods sold
c.Gross margin
d.Operating expenses - ANS-d.Operating expenses
Impact Corporation reported $440,000 of revenue for the year. Selling expenses
amounted to $53,000, and administrative expenses were $78,000. Cost of goods sold
was 44% of revenue. Impact's gross margin is:
a.$246,400.
b.$309,000.
c.$193,600.
d.$362,000. - ANS-a.$246,400.
440,000*.44=193,600
440,000-193,000=246,400
Super Co. manufactured 10,000 units and reported the following information for
December:
Direct materials$36,000
, Direct labor25,000
Manufacturing overhead35,000
Beginning work in process inventory28,000
Ending work in process inventory29,000
The prime cost per unit is:
a.$6.00.
b.$3.60.
c.$6.10.
d.$3.50. - ANS-c.$6.10.
36,000+25,000=61,000
61,000/10,000=6.1
Which of the following costs forms a part of prime cost as well as conversion cost?
a.Manufacturing overhead
b.The cost of direct materials
c.The cost of direct materials and direct labor
d.The cost of direct labor - ANS-d.The cost of direct labor
The cost of delivering a product to a customer is an example of:
a.a conversion cost.
b.manufacturing overhead.
c.a prime cost.
d.a period cost. - ANS-d.a period cost.
During May, the cost of goods manufactured was $60,000. The beginning finished
goods inventory for the month was $22,000, and the ending finished goods inventory
was $28,000. What was the cost of goods sold for May?
a.$110,000
b.$64,000
c.$32,000
d.$54,000 - ANS-d.$54,000
28,000-22,000=6,000
60,000-6,000=54,000
The cost of research and development activities is classified as: - ANS-administrative
cost.
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