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Test Bank for Financial Accounting Tools For Business Decision Making 10th Edition Paul D. Kimmel, Jerry J. Weygandt, Jill E. Mitchell ||Complete A+ Guide
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Test Bank for Financial Accounting Tools For Business Decision Making 10th Edition Paul D. Kimmel, Jerry J. Weygandt, Jill E. Mitchell ||Complete A+ Guide

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  • November 7, 2024
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TEST BANK FOR
Managerial Accounting Tools for Business Decision Making
10thEdition by Jerry J. Weygandt, Paul D. Kimmel, Jill E.
Mitchell



CHAPTER 1 f




MANAGERIAL ACCOUNTING f




CHAPTER LEARNING OBJECTIVES f f



1. Identify the features of managerial accounting and the functions of management. The
f f f f f f f f f f f


primary users of managerial accounting reports, issued as frequently as needed, are internal
f f f f f f f f f f f f f


users, who are officers, department heads, managers, and supervisors in the company. The
f f f f f f f f f f f f f


purpose of these reports is to provide special-purpose information for a particular user for a
f f f f f f f f f f f f f f f


specific decision. The content of managerial accounting reports pertains to subunits of the
f f f f f f f f f f f f f


business. It may be very detailed, and may extend beyond the accrual accounting system. The
f f f f f f f f f f f f f f f


reporting standard is relevance to the decision being made. No independent audits are
f f f f f f f f f f f f f


required in managerial accounting.
f f f f


The functions of management are planning, directing, and controlling. Planning requires
f f f f f f f f f f


management to look ahead and to establish objectives. Directing involves coordinating the
f f f f f f f f f f f f


diverse activities and human resources of a company to produce a smooth-running operation.
f f f f f f f f f f f f f


Controlling is the process of keeping the activities on track.
f f f f f f f f f f



2. Describe the classes of manufacturing costs and the differences between product and
f f f f f f f f f f f


period costs. Manufacturing costs are typically classified as either (1) direct materials, (2)
f f f f f f f f f f f f f


direct labor, or (3) manufacturing overhead. Raw materials that can be physically and directly
f f f f f f f f f f f f f f


associated with the finished product during the manufacturing process are called direct
f f f f f f f f f f f f


materials. The work of factory employees that can be physically and directly associated with
f f f f f f f f f f f f f f


converting raw materials into finished goods is considered direct labor. Manufacturing
f f f f f f f f f f f


overhead consists of costs that are indirectly associated with the manufacture of the finished
f f f f f f f f f f f f f f


product. Manufacturing costs are typically incurred at the manufacturing facility.
f f f f f f f f f f



Product costs are costs that are a necessary and integral part of producing the finished product.
f f f f f f f f f f f f f f f


Product costs are also called inventoriable costs. These costs do not become expenses until
f f f f f f f f f f f f f f


the company sells the finished goods inventory.
f f f f f f f



Period costs are costs that are identified with a specific time period rather than with a salable
f f f f f f f f f f f f f f f f


product. These costs relate to nonmanufacturing costs and therefore are not inventoriable
f f f f f f f f f f f f


costs. They are expensed as incurred.
f f f f f f



3. Demonstrate how to compute cost of goods manufactured and prepare financial f f f f f f f f f f


statements for a manufacturer. Companies add the cost of the beginning work in process
f f f f f f f f f f f f f f


inventory to the total manufacturing costs for the current year to arrive at the total cost of work
f f f f f f f f f f f f f f f f f f


in process for the year. They then subtract the ending work in process inventory from the total
f f f f f f f f f f f f f f f f f


cost of work in process to arrive at the cost of goods manufactured.
f f f f f f f f f f f f f



The difference between a merchandising and a manufacturing balance sheet is in the current
f f f f f f f f f f f f f


assets section. The current assets section of a manufacturing company's balance
f f f f f f f f f f f


fsheet

,12-2 Test Bank for Managerial Accounting, Tenth
Edition
presents three inventory accounts: finished goods inventory, work in process inventory, and
f f f f f f f f f f f


raw materials inventory.
f f f



The difference between a merchandising and a manufacturing income statement is in the cost
f f f f f f f f f f f f f


of goods sold section. A manufacturing cost of goods sold section shows beginning and ending
f f f f f f f f f f f f f f f


finished goods inventories and the cost of goods manufactured.
f f f f f f f f f


4 Discuss trends in managerial accounting. Managerial accounting has experienced many
f f f f f f f f f f


changes in recent years, including a shift toward service companies as well as emphasis on
f f f f f f f f f f f f f f f


ethical behavior. Improved practices include a focus on managing the value chain through
f f f f f f f f f f f f f


techniques such as just-in-time inventory, total quality management, activity-based costing, and
f f f f f f f f f f f


theory of constraints. The balanced scorecard is now used by many companies in order to
f f f f f f f f f f f f f f f


attain a more comprehensive view of the company's operations, and companies are now
f f f f f f f f f f f f f


evaluating their performance with regard to their corporate social responsibility. Finally, data
f f f f f f f f f f f f


analytics and data visualizations are important tools that help businesses identify problems and
f f f f f f f f f f f f f


opportunities, and then make informed decisions
f f f f f f




TRUE-FALSE STATEMENTS f



1. Reports prepared in financial accounting are general-purpose reports while reports
f f f f f f f f f


prepared in managerial accounting are usually special-purpose reports.
f f f f f f f f



Ans: fT, fLO: f1, fBloom: fC, fDifficulty: fEasy, f Min: f1, fAACSB: fNone, fAICPA fBB: fNone, fAICPA fFC: fReporting, fAICPA fPC: fCommunication, fIMA: fReporting

2. Managerial accounting information generally pertains to an entity as a whole and is highly
f f f f f f f f f f f f f


aggregated.
f



Ans: fF, fLO: f1, fBloom: fK, fDifficulty: fEasy, f Min: f1, fAACSB: fNone, fAICPA fBB: fNone, fAICPA fFC: fReporting, fAICPA fPC: fCommunication, fIMA: fReporting

3. All forms of business organizations need managerial accounting information.
f f f f f f f f



Ans: fT, fLO: f1, fBloom: fK, fDifficulty: fEasy, f Min: f1, fAACSB: fNone, fAICPA fBB: fNone, fAICPA fFC: fReporting, fAICPA fPC: fCommunication, fIMA: fReporting

4. Determining the unit cost of manufacturing a product is an output of financial accounting. f f f f f f f f f f f f f



Ans: f F, f LO: f 1, f Bloom: f K, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f None, f AICPA f FC: f Measurement f Analysis f and f Interpretation, f AICPA
f PC: fNone, f IMA: fFSA



5. Managerial accounting internal reports are prepared more frequently than financial f f f f f f f f f


statements that are distributed externally.
f f f f f



Ans: fT, fLO: f1, fBloom: fK, fDifficulty: fEasy, f Min: f1, fAACSB: fNone, fAICPA fBB: fNone, fAICPA fFC: fReporting, fAICPA fPC: fCommunication, fIMA: fReporting

6. The management function of organizing and directing is mainly concerned with settinggoals
f f f f f f f f f f f f


and objectives for the entity.
f f f f f



Ans: fF, f LO: f1, fBloom: fK, fDifficulty: fEasy, f Min: f1, fAACSB: fNone, fAICPA fBB: f Process f and fResource fManagement fPerspectives, fAICPA f FC: fNone,
fAICPA fPC: fLeadership, fIMA: fDecision fAnalysis




7. The controller of a company is responsible for all of the accounting and finance issues a
f f f f f f f f f f f f f f f


company faces.
f f



Ans: fF, fLO: f1, fBloom: fK, fDifficulty: fEasy, fMin: f1, fAACSB: fEthics, fAICPA fBB: f None, fAICPA fFC: fReporting, fAICPA fPC: fNone, fIMA: fReporting

8. Controlling is the process of determining whether planned goals are being met.
f f f f f f f f f f f



Ans: fT, f LO: f1, fBloom: fK, fDifficulty: fEasy, f Min: f 1, fAACSB: fNone, fAICPA fBB: f Process f and fResource f Management fPerspectives, fAICPA f FC: fNone,
fAICPA fPC: fLeadership, fIMA: f Internal f Controls



9. Decision-making is an integral part of the planning, directing, and controlling functions. f f f f f f f f f f f



Ans: f T, f LO: f 1, f Bloom: f K, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f Strategic f Perspective, f AICPA f FC: f None, f AICPA f PC:
f Leadership, f IMA: fDecision fAnalysis

, Planning for Capital Investments 12-3

10. Direct materials costs and indirect materials costs are both included in manufacturing
f f f f f f f f f f f


overhead.
f



Ans: f F, f LO: f 2, f Bloom: f K, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f None, f AICPA f FC: f Measurement f Analysis f and f Interpretation,
f AICPA f PC: fNone, f IMA: fCost f Management



11. Manufacturing costs that cannot be classified as direct materials or direct labor are
f f f f f f f f f f f f


classified as manufacturing overhead.
f f f f



Ans: f T, f LO: f 2, f Bloom: f K, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f None, f AICPA f FC: f Measurement f Analysis f and f Interpretation,
f AICPA f PC: fNone, f IMA: fCost f Management



12. The balance in the raw materials inventory account is equal to total direct materials minus
f f f f f f f f f f f f f f


total indirect materials.
f f f



Ans: f F, f LO: f 2, f Bloom: f K, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f None, f AICPA f FC: f Measurement f Analysis f and f Interpretation,
f AICPA f PC: fNone, f IMA: fCost f Management




13. Raw materials that can be conveniently and directly associated with a finished product are
f f f f f f f f f f f f f


called materials overhead.
f f f



Ans: f F, f LO: f 2, f Bloom: f K, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f None, f AICPA f FC: f Measurement f Analysis f and f Interpretation,
f AICPA f PC: fNone, f IMA: fCost f Management



14. The total cost of a finished product does not generally include equal amounts of materials,
f f f f f f f f f f f f f f


labor, and overhead costs.
f f f f



Ans: f T, f LO: f 2, f Bloom: f C, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f None, f AICPA f FC: f Measurement f Analysis f and f Interpretation,
f AICPA f PC: fNone, f IMA: fCost f Management




15. Both direct labor cost and indirect labor cost are product costs.
f f f f f f f f f f



Ans: f T, f LO: f 2, f Bloom: f C, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f None, f AICPA f FC: f Measurement f Analysis f and f Interpretation,
f AICPA f PC: fNone, f IMA: fCost f Management



16. Period costs include selling and administrative expenses.
f f f f f f



Ans: f T, f LO: f 2, f Bloom: f K, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f None, f AICPA f FC: f Measurement f Analysis f and f Interpretation,
f AICPA f PC: fNone, f IMA: fCost f Management



17. Indirect materials and indirect labor are both inventoriable costs.
f f f f f f f f



Ans: f T, f LO: f 2, f Bloom: f C, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f None, f AICPA f FC: f Measurement f Analysis f and f Interpretation,
f AICPA f PC: fNone, f IMA: fCost f Management



18. Direct materials and direct labor are the only product costs.
f f f f f f f f f



Ans: f F, f LO: f 2, f Bloom: f K, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f None, f AICPA f FC: f Measurement f Analysis f and f Interpretation,
f AICPA f PC: fNone, f IMA: fCost f Management



19. Total period costs are deducted from total cost of work in process to calculate cost
f f f f f f f f f f f f f f


ofgoods manufactured.
f f f



Ans: f F, f LO: f 3, f Bloom: f K, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f None, f AICPA f FC: f Measurement f Analysis f and f Interpretation,
f AICPA f PC: fNone, f IMA: fCost f Management



20. Period costs are not inventoriable costs.
f f f f f



Ans: fT, fLO: f2, fBloom: fK, fDifficulty: fEasy, f Min: f1, fAACSB: fNone, fAICPA fBB: f None, fAICPA fFC: fReporting, fAICPA fPC: fNone, fIMA: fReporting

21. Ending finished goods inventory appears on both the balance sheet and the
f f f f f f f f f f f


fincomestatement of a manufacturing company.f f f f f



Ans: fT, fLO: f3, fBloom: fK, fDifficulty: fEasy, f Min: f1, fAACSB: fNone, fAICPA fBB: f None, fAICPA fFC: fReporting, fAICPA fPC: fNone, fIMA: fReporting

22. The beginning work in process inventory appears on both the balance sheet and the cost
f f f f f f f f f f f f f f


of goods manufactured schedule of a manufacturing company.
f f f f f f f f



Ans: fF, fLO: f3, fBloom: fK, fDifficulty: fEasy, f Min: f1, fAACSB: fNone, fAICPA fBB: fNone, fAICPA fFC: fReporting, fAICPA fPC: fNone, fIMA: fReporting

, 12-4 Test Bank for Managerial Accounting, Tenth
Edition
23. In calculating gross profit for a manufacturing company, the cost of goods manufactured is
f f f f f f f f f f f f f


deducted from net sales.
f f f f



Ans: fF, fLO: f3, fBloom: fK, fDifficulty: fEasy, f Min: f1, fAACSB: fNone, fAICPA fBB: fNone, fAICPA fFC: fReporting, fAICPA fPC: fNone, fIMA: fReporting


24. Finished goods inventory does not appear on a cost of goods manufactured schedule.
f f f f f f f f f f f f



Ans: fT, fLO: f3, fBloom: fK, fDifficulty: fEasy, f Min: f1, fAACSB: fNone, fAICPA fBB: f None, fAICPA fFC: fReporting, fAICPA fPC: fNone, fIMA: fReporting


25. If ending work in process inventory is greater than beginning work in process
f f f f f f f f f f f f


finventory,then cost of goods manufactured will be less than total manufacturing costs for the
f f f f f f f f f f f f f f


period.
f



Ans: fT, fLO: f3, fBloom: fC, fDifficulty: f Moderate, f Min: f 1, fAACSB: fNone, fAICPA fBB: f None, fAICPA fFC: f Measurement fAnalysis f and fInterpretation, f AICPA fPC:
fNone, f IMA: fCost f Management



26. The finished goods inventory account for a manufacturing company is equivalent to the
f f f f f f f f f f f f


inventory account for a merchandising company.
f f f f f f



Ans: fT, fLO: f3, fBloom: fC, fDifficulty: fEasy, f Min: f1, fAACSB: fNone, fAICPA fBB: fNone, fAICPA fFC: fReporting, fAICPA fPC: fNone, fIMA: fReporting

27. Raw materials inventory shows the cost of completed goods available for sale to
f f f f f f f f f f f f


customers.
f



Ans: fF, fLO: f3, fBloom: fK, fDifficulty: fEasy, f Min: f1, fAACSB: fNone, fAICPA fBB: fNone, fAICPA fFC: fReporting, fAICPA fPC: fNone, fIMA: fReporting

28. The balanced scorecard approach attempts to maintain minimal inventories on hand.
f f f f f f f f f f



Ans: f F, f LO: f 4, f Bloom: f K, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f None, f AICPA f FC: f Measurement f Analysis f and f Interpretation, f AICPA
f PC: fNone, f IMA: fPerformance fMeasurement




29. The supply chain is all the activities associated with providing a product or service.
f f f f f f f f f f f f f



Ans: f F, f LO: f 4, f Bloom: f K, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f None, f AICPA f FC: f Measurement f Analysis f and f Interpretation, f AICPA
f PC: fNone, f IMA: fPerformance fMeasurement



30. Many companies have significantly lowered inventory levels and costs using just-in-
f f f f f f f f f f


timeinventory methods.
f f



Ans: f T, f LO: f 4, f Bloom: f K, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f None, f AICPA f FC: f Measurement f Analysis f and f Interpretation, f AICPA
f PC: fNone, f IMA: fCost f Management



31. Managerial accounting is primarily concerned with managers and external users.
f f f f f f f f f



Ans: fF, fLO: f1, fBloom: fK, f Difficulty: fEasy, f Min: f1, fAACSB: fNone, fAICPA fBB: fNone, fAICPA fFC: fReporting, fAICPA fPC: fNone, fIMA: fBusiness fEconomics

32. Planning involves coordinating the diverse activities and human resources of a companyto
f f f f f f f f f f f f


produce a smoothly running operation.
f f f f f



Ans: fF, f LO: f1, fBloom: fK, fDifficulty: fEasy, f Min: f1, fAACSB: fNone, fAICPA fBB: f Process f and fResource fManagement fPerspectives, fAICPA fFC: fNone,
fAICPA fPC: fNonet, f IMA: fCost f Management




33. When the physical association of raw materials with the finished product is too difficult to
f f f f f f f f f f f f f f


trace, these costs are usually classified as indirect materials.
f f f f f f f f f



Ans: f T, f LO: f 2, f Bloom: f C, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f None, f AICPA f FC: f Measurement f Analysis f and f Interpretation, f AICPA
f PC: fNone, f IMA: fCost f Management



34. Product costs are also called inventoriable costs.
f f f f f f



Ans: f T, f LO: f 2, f Bloom: f K, f Difficulty: f Easy, f Min: f 1, f AACSB: f None, f AICPA f BB: f None, f AICPA f FC: f Measurement f Analysis f and f Interpretation, f AICPA
f PC: fNone, f IMA: fCost f Management



35. Direct materials become a cost of goods manufactured when these items are acquired,
f f f f f f f f f f f f


not when the items are used.
f f f f f



Ans: fF, fLO: f3, fBloom: fK, fDifficulty: f Moderate, f Min: f 1, fAACSB: fNone, f AICPA fBB: f None, fAICPA fFC: f Measurement fAnalysis f and fInterpretation, fAICPA
fPC: fNone, f IMA: fCost f Management

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