Chapter 14 Questions

Question 1

The purposes of managerial accounting are to provide useful information to aid in:

Answer 1

To provide useful information to aid in planning future activities
Determining the cost of products and services
Comparing actual to planned results

Question 2

Purpose is to assist managers in planning and control decisions. Managerial or Financial?

Answer 2

Managerial Accounting System

Question 3

Structured and follows GAAP. Managerial or Financial?

Answer 3

Financial Accounting System

Question 4

_____ is when a person commits fraud and feels a low risk of getting caught.

Answer 4

Opportunity

Question 5

_____ costs are cost-effectively traced to a cost object.

Answer 5

Direct

Question 6

Common examples of _____ costs include selling expenses and general office personnel, advertising expenses, and depreciation of office equipment.

Answer 6

Period

Question 7

Service companies do not classify costs as product versus period costs because:

Answer 7

their services are not inventoried

Question 8

What are prime costs?

Answer 8

Direct Material + Direct Labor

Question 9

What items are classified as a materials activity?

Answer 9

Materials activities includes raw materials beginning inventory and raw materials purchases

Question 10

Which of these phrases describes the fact that employees understand the changing needs and wants of their customers and align their management and operating practices accordingly?

Answer 10

Customer orientation

Question 11

Which is the lean principle where managers and employees seek to uncover waste in business activities including accounting activities such as payroll and disbursements?

Answer 11

Total quality management

Question 12

A focus on financial, social, and environmental measures is known as

Answer 12

Triple bottom line

Question 13

What are sections of the Schedule of Cost of Goods Manufactured?

Answer 13

The sections include Direct Materials, Direct Labor, Factory Overhead, and Cost of Goods Manufactured.

Question 14

Prepare manufacturing budgets for the next year. Managerial accounting information or financial accounting information?

Answer 14

Managerial

Question 15

Determine whether to lend to a company. Managerial accounting information or financial accounting information?

Answer 15

Financial

Question 16

Prepare GAAP-based financial statements for creditors. Managerial accounting information or financial accounting information?

Answer 16

Financial

Question 17

Estimate profits from a new service opportunity. Managerial accounting information or financial accounting information?

Answer 17

Managerial

Question 18

Evaluate a purchasing department’s performance. Managerial accounting information or financial accounting information?

Answer 18

Managerial

Question 19

Estimate product cost for a new line of shoes. Managerial accounting information or financial accounting information?

Answer 19

Managerial

Question 20

Measure profitability of an individual store. Managerial accounting information or financial accounting information?

Answer 20

Managerial

Question 21

Determine location and size for a new plant. Managerial accounting information or financial accounting information?

Answer 21

Managerial

Question 22

Classify each cost as either direct or indirect. Annual flat fee paid for factory cleaning.

Answer 22

Indirect

Question 23

Classify each cost as either direct or indirect.
Wages of factory maintenance workers

Answer 23

Indirect

Question 24

Classify each cost as either direct or indirect.
Factory utilities

Answer 24

Indirect

Question 25

Classify each cost as either direct or indirect. Factory supervisor salary

Answer 25

Indirect

Question 26

Classify each cost as either direct or indirect. Ink for labeling soccer balls

Answer 26

Indirect

Question 27

Classify each cost as either direct or indirect. Leather covers for soccer balls

Answer 27

Direct

Question 28

Classify each cost as either direct or indirect. Annual flat fee paid for factory security

Answer 28

Indirect

Question 29

Classify each cost as either direct or indirect. Coolants for machinery

Answer 29

Indirect

Question 30

Classify each cost as either direct or indirect. Machinery depreciation (straight-line)

Answer 30

Indirect

Question 31

Classify each cost as either direct or indirect. Factory building rent

Answer 31

Indirect

Question 32

Classify each cost as either direct or indirect. Depreciation on classroom printers

Answer 32

Indirect

Question 33

Classify each cost as either direct or indirect. Classroom building insurance used up

Answer 33

Indirect

Question 34

Classify each cost as either direct or indirect. Classroom electricity cost

Answer 34

Indirect

Question 35

Classify each cost as either direct or indirect. Classroom electricity cost

Answer 35

Indirect

Question 36

Classify each cost as either direct or indirect. Classroom building utilities cost

Answer 36

Indirect

Question 37

Classify each cost as either direct or indirect. Instructional manuals for students

Answer 37

Direct

Question 38

Classify each cost as either direct or indirect. Instructor wage (per class)

Answer 38

Direct

Question 39

Classify each cost as either direct or indirect. Teaching assistant wage (per class)

Answer 39

Direct

Question 40

Classify each cost as direct, indirect, selling, or general and administrative. Beverages served on plane

Answer 40

Direct

Question 41

Classify each cost as direct, indirect, selling, or general and administrative. Accounting manager salary

Answer 41

general and administrative

Question 42

Classify each cost as direct, indirect, selling, or general and administrative. Depreciation (straight-line) on plane

Answer 42

Indirect

Question 43

Classify each cost as direct, indirect, selling, or general and administrative. Fuel used for plane flight

Answer 43

Direct

Question 44

Classify each cost as direct, indirect, selling, or general and administrative. Flight attendant wages for flight

Answer 44

Direct

Question 45

Classify each cost as direct, indirect, selling, or general and administrative. Pilot wages for flight

Answer 45

Direct

Question 46

Classify each cost as direct, indirect, selling, or general and administrative. Aircraft maintenance manager salary

Answer 46

Indirect

Question 47

Classify each cost as direct, indirect, selling, or general and administrative. Snacks served on airplanes

Answer 47

Direct

Question 48

Classify each cost as either direct materials, direct labor, factory overhead, selling expenses, or general and administrative expenses. Camera component

Answer 48

Direct materials

Question 49

Classify each cost as either direct materials, direct labor, factory overhead, selling expenses, or general and administrative expenses. Office accountant salary

Answer 49

General and administrative expense

Question 50

Classify each cost as either direct materials, direct labor, factory overhead, selling expenses, or general and administrative expenses. Microphone component

Answer 50

Direct materials

Question 51

Classify each cost as either direct materials, direct labor, factory overhead, selling expenses, or general and administrative expenses. Depreciation (straight-line) on robotic equipment used in assembly

Answer 51

Factory overhead

Question 52

Classify each cost as either direct materials, direct labor, factory overhead, selling expenses, or general and administrative expenses. Salary of chief executive officer

Answer 52

General and administrative expense

Question 53

Classify each cost as either direct materials, direct labor, factory overhead, selling expenses, or general and administrative expenses. Depreciation on office equipment

Answer 53

General and administrative expense

Question 54

Classify each cost as either direct materials, direct labor, factory overhead, selling expenses, or general and administrative expenses. Wages for factory equipment operators

Answer 54

Direct labor

Question 55

Classify each cost as either direct materials, direct labor, factory overhead, selling expenses, or general and administrative expenses. Display screen

Answer 55

Direct materials