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Exam 1: Management Accounting and Corporate Governance

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Question 51

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Costs associated with holding inventory often include:

A) theft,damage,and obsolescence.
B) financing.
C) warehouse space.
D) supervision.
E) All of these.

F) B) and E)
G) A) and D)

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Question 52

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Select the incorrect statement regarding costs and expenses.

A) Some costs are initially recorded as expenses while others are initially recorded as assets.
B) Expenses are incurred when assets are used to generate revenue.
C) Manufacturing-related costs are initially recorded as expenses.
D) Non-manufacturing costs should be expensed in the period in which they are incurred.

E) B) and C)
F) A) and B)

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Question 53

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The objective of a just-in-time inventory system is to totally eliminate all inventories.

Randall Company manufactures chocolate bars.The following were among Randall's manufacturing costs during the current year: $\begin{array}{c}\begin{array}{lll}\underline{\text { Wages}} \\\text { Machine operators}\\\text { Selling and administrative personnel}\\ \end{array}\begin{array}{lll}\\\$300,000\\\$75,000\end{array}\end{array}$ $\begin{array}{c}\begin{array}{lll}\underline{\text { Materials used}}\\ \text { Lubricant for oiling machinery}\\\text { Cocoa, sugar, and other raw materials}\\\text { Packaging materials}\\ \end{array}\begin{array}{lll}\\\$25,000\\\$225,000\\\$190,000\end{array}\end{array}$ Randall's direct materials amounted to:

For what activities do an organization's managers need accounting information?

Depreciation on manufacturing equipment is an indirect product cost,while depreciation on office equipment is a period cost.

Which of following practices is not considered an effective means of reengineering business systems?

Assuming a company's inventory increased during the period,which of the following misclassifications may increase net income?

Opportunity,pressure and rationalization are the three elements of the fraud triangle.

Anton believes his company's overhead costs are driven (affected) by the number of machine hours because the production process is heavily automated.During the period,the company produced 3,000 units of Product A requiring a total of 100 machine hours and 2,000 units of Product B requiring a total of 25 machine hours.What allocation rate should be used if the company incurs overhead costs of $10,000?

For a manufacturing company,both direct labor costs and indirect labor costs are classified as product costs.

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

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

Which of the following transactions would cause net income for the period to decrease?

If a company misclassifies a general,selling and administrative cost as a product cost in a period when production exceeds sales:

According to the Sarbanes-Oxley Act,a company's audit committee is responsible for its system of internal controls.

How does the level of aggregation differ between financial accounting information and managerial accounting information?

What is the effect on the balance sheet of making cash sales of inventory to customers on profit?

The benefits of a just-in-time system would include all of the following except:

Just in time systems can be used by both manufacturing and merchandising companies.