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Exam 1: Management Accounting and Corporate Governance

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Question 31

True/False

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The biggest challenge in computing the total cost per unit of a product is determining the amount of overhead cost that should be assigned to each unit.

A) True
B) False

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Question 32

Multiple Choice

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During its first year of operations,Forrest Company paid $30,000 for direct materials and $50,000 in wages for production workers.Lease payments,utility costs,and depreciation on factory equipment totaled $15,000.General,selling,and administrative expenses were $20,000.The average cost to produce one unit was $2.50.How many units were produced during the period?

A) 40,000
B) 46,000
C) 38,000
D) None of these.

E) All of the above
F) A) and D)

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Question 33

Multiple Choice

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Costs associated with holding inventory often include:

All of the following are downstream costs except:

Select the term from the list provided that best matches each of the following descriptions.The first is done for you.

Steuben Company produces dog houses.During the current year,Steuben Company incurred the following costs: $\begin{array}{lrr} \text {Rent on manufacturing facility } &\$250,000\\ \text { Office manager's salar'y } &150,000\\ \text { Wages of factory machine operator's} &110,000\\ \text {Depreciation on manufacturing equipment } &50,000\\ \text { Insurance and taxes on selling and administrative offices } &30,000\\ \text { Direct materials purchased and used } &170,000\\\end{array}$ Based on the above information,the amount of period costs shown on Steuben's income statement is:

Most internal users of accounting information need primarily global information that reflects the performance of the company as a whole.

Which of the following costs would be classified as a direct cost for a company that produces motorcycles?

A manufacturing business paid $3,000 to purchase inventory.As a result,assets would increase by $3,000.

Steuben Company produces dog houses.During the current year,Steuben Company incurred the following costs: $\begin{array}{lrr} \text {Rent on manufacturing facility } &\$250,000\\ \text { Office manager's salar'y } &150,000\\ \text { Wages of factory machine operator's} &110,000\\ \text {Depreciation on manufacturing equipment } &50,000\\ \text { Insurance and taxes on selling and administrative offices } &30,000\\ \text { Direct materials purchased and used } &170,000\\\end{array}$ Based on the above information,which of the following would not be treated as a product cost:

Select the term from the list provided that best matches each of the following descriptions.The first is done for you.

Managerial accounting is designed to satisfy needs of external users including creditors,investors,and governmental agencies.

Is McDonald's a manufacturing company or a service company? How do they record the cost of materials,labor,and overhead?

The sequence of activities through which an organization provides products to its customers is called a supply chain.

Ashley Bradshaw is the manager of one department in a large store.In this capacity,which of the following kinds of information would she be interested in?

The Sarbanes-Oxley Act allows,but does not require,a corporation to establish a whistleblower policy.

Benchmarking involves the identification of the best practices used by world-class competitors.Discuss the following widely recognized best practices: activity-based management and just-in-time inventory.

Upstream costs are classified as product costs and downstream costs are classified as period costs for financial reporting purposes.

How do information needs of employees change moving up the organization chart?

As a Certified Management Accountant,Derek is bound by the standards of ethical conduct issued by the Institute of Management Accountants.According to the standards,Derek has a responsibility to: