Deck 2: Building Blocks of Managerial Accounting

Question 1

Only manufacturing companies have finished goods inventory.

Answer 1

True

Question 2

Which type of company typically produces its own inventory?

A)Manufacturer
B)Service company
C)Retailer
D)Wholesaler

Answer 2

A

Question 3

Jiffy Lube,an automotive maintenance company,is primarily what type of company?

A)Manufacturer
B)Retailer
C)Wholesaler
D)Service

Answer 3

D

Question 4

Among other products,Nabisco makes Oreo cookies.Which type of company is Nabisco?

A)Service
B)Manufacturer
C)Retailer
D)Wholesaler

Question 5

What type of company resells tangible products it purchases ready-made from suppliers?

A)Merchandiser
B)Retailer
C)Wholesaler
D)All of the above

Question 6

How would Chevrolet classify its partially completed vehicles?

A)Finished goods inventory
B)Raw materials inventory
C)Work in process inventory
D)Supplies inventory

Question 7

Merchandising companies include both wholesalers and retailers.

Question 8

American Eagle Outfitters classifies the denim jeans on the shelves at its retail locations as

A)finished goods inventory.
B)work in process inventory.
C)merchandise inventory.
D)raw materials inventory.

Question 9

Retailers sell their products to consumers.

Question 10

Which of the following types of companies has raw materials,work in process and finished goods inventory?

A)Retailers
B)Manufacturers
C)Wholesalers
D)Service companies

Question 11

All companies have the same types of inventories.

Question 12

The balance sheet of a service company has

A)raw materials inventory.
B)little or no inventory.
C)three categories of inventory.
D)two categories of inventory.

Question 13

Macy's (the department store chain)classifies its clothing held for sale as

A)merchandise inventory.
B)raw materials inventory.
C)work in process inventory.
D)finished goods inventory.

Question 14

Before these materials are used to manufacture its cars,Toyota classifies steel,glass,and plastic as

A)raw materials inventory.
B)finished goods inventory.
C)work in process inventory.
D)merchandise inventory.

Question 15

Service companies must carry a large amount of inventory to meet consumer demand.

Question 16

Which type of company makes up the largest sector of the United States economy?

A)Manufacturers
B)Merchandising
C)Wholesalers
D)Service companies

Question 17

Before these materials are used to manufacture cabinets,a woodworker classifies lumber,paint,and glue as

A)finished goods inventory.
B)work in process inventory.
C)raw materials inventory.
D)merchandise inventory.

Question 18

Which of the following are merchandising companies?

A)Manufacturers
B)Retailers
C)Wholesalers
D)Both retailers and wholesalers

Question 19

Schlabig & Associates,a public accounting firm that provides business consulting to a consumer,is what type of company?

A)Manufacturer
B)Retailer
C)Service
D)Wholesaler

Question 20

Manufacturing companies usually have three types of inventory.

Question 21

Which of the following is a characteristic of a service company?

A)Service companies make a product.
B)Service companies have a single category of inventory.
C)Service companies generally have no tangible products to sell.
D)Service companies transform raw materials into finished goods.

Question 22

In the United States,the fastest growing type of company is

A)merchandising.
B)service.
C)manufacturing.
D)none of the above.

Question 23

Explain the difference between raw materials inventory,work in process inventory,and finished goods inventory.

Question 24

Which type of company has three categories of inventory?

A)A manufacturing company
B)A merchandising company
C)A service company
D)All of these companies

Question 25

Toshiba Corporation makes computer chips.Toshiba Corporation would be classified as a

A)merchandising company.
B)manufacturing company.
C)service company.
D)simple company.

Question 26

Describe a company that has some elements of all three types of companies.It is part service company,part manufacturer,and part merchandiser.

Question 27

On the line in front of each statement,enter the letter corresponding to the term that best fits that statement.You may use a letter more than once and some letters may not be used at all.

Question 28

Controlling costs across the whole value chain often requires a trade-off between the individual elements of the value chain.

Question 29

Describe service,merchandising,and manufacturing companies.

Question 30

All of the components of manufacturing - from research and development through customer service after the sale - are part of a firm's value chain.

Question 31

A snow removal business would be classified as a

A)manufacturing company.
B)merchandising company.
C)simple company.
D)service company.

Question 32

A ________ company's balance sheet reports just one inventory called "Inventory."

A)service
B)merchandising
C)manufacturing
D)All of these types of companies

Question 33

Explain the type of inventory that is characteristic at a service company.

Question 34

Enter the letter of the type of each company category on the line in front of each statement.Letters may be used more than once or not at all.

Question 35

An accounting firm would be classified as a

A)manufacturing company.
B)merchandising company.
C)simple company.
D)service company.

Question 36

All of the following items would be found in raw materials inventory for a furniture manufacturer except

A)wood.
B)fabric.
C)steel framing.
D)assembly worker wages.

Question 37

In a (an)________ company,salaries and benefits make up over 70% of the total costs.

A)merchandising
B)service
C)manufacturing
D)All companies have a high percentage of labor costs.

Question 38

In which of the following common types of business companies have costs of business activities that include inventory-related freight in costs and the cost of import duties or tariffs?

A)service company
B)manufacturing company
C)merchandising company
D)all of these companies

Question 39

The activities in the value chain must take place in a specific order.

Question 40

Which of the following items could be found in work in process inventory at a candy bar manufacturer?

A)Candy bars made but not coated in chocolate
B)Cocoa products to make candy bars
C)Sugar products to make candy bars
D)Candy bars completed but not yet sold

Question 41

Testing ways to increase the strength of your product would be classified as which element of the value chain?

A)Design
B)Distribution
C)Production
D)Research and development

Question 42

Lucky Cow Dairy provided the following expense information for May:

What is the total cost of research and development of the value chain?

A)$73,000
B)$70,000
C)$55,000
D)$195,000

Question 43

The costs incurred to transport merchandise to a company's retail store would be considered to be what element of the value chain?

A)Marketing
B)Customer service
C)Production or purchases
D)Research and development

Question 44

The costs associated with reengineering machinery and its location within the factory to increase efficiency would be considered which element of the value chain?

A)Customer service
B)Marketing
C)Research and development
D)Design

Question 45

Which of the following value chain elements is associated with the costs of shipping inventory to the retail outlet in a merchandising company?

A)Design
B)Distribution
C)Production and Purchases
D)Customer Service

Question 46

Advertising expenses would be considered which element of the value chain?

A)Customer service
B)Marketing
C)Production
D)Research and development

Question 47

Which of the following would not be included in the value chain?

A)Website development costs
B)Costs to deliver product to retail outlets
C)Costs of print advertisements
D)All of these costs would be included as part of the value chain.

Question 48

All of the following are part of a company's value chain except

A)design.
B)distribution.
C)administration.
D)marketing.

Question 49

Which element of the value chain would a technical support hotline for customers be considered?

A)Design
B)Customer service
C)Distribution
D)Marketing

Question 50

All of the following relate to part of the value chain for a clothing company except

A)cost of advertising new products.
B)administrative costs.
C)cost of shipping products to retailers.
D)salaries of clothing designers.

Question 51

Which element of the value chain would depreciation on a factory be classified as?

A)Design
B)Distribution
C)Research and development
D)Production

Question 52

Receipt of materials is part of the firm's value chain.

Question 53

The value chain concept helps companies control costs over the value chain as a whole.

Question 54

Collectively,all costs such as distribution,marketing,and design are part of

A)downstream activities.
B)fixed costs.
C)the value chain.
D)manufacturing costs.

Question 55

The value chain is used by

A)service,manufacturing,and merchandising businesses.
B)only service and manufacturing businesses.
C)only service and merchandising businesses.
D)only manufacturing and merchandising businesses.

Question 56

Research and development is needed to improve products and to design new products.

Question 57

Which of the following activities is not included in the value chain?

A)Reporting
B)Design
C)Production
D)Customer service

Question 58

What is the promotion of products and services known as?

A)Customer service
B)Marketing
C)Distribution
D)Design

Question 59

A company's distribution system is an important part of the value chain.

Question 60

All of the following activities are included in the value chain except

A)customer service.
B)design.
C)safety.
D)production.

Question 61

Joe's Bottling Company provided the following expense information for July:

What is the total cost for the design category of the value chain?

A)$244,000
B)$186,000
C)$179,000
D)$123,000

Question 62

Sneider Family Orange Groves processes a variety of fresh juices.The company has the following expenses for July:

What is the total cost for the production category of the value chain?

A)$462,000
B)$60,000
C)$302,000
D)$201,000

Question 63

Joe's Bottling Company provided the following expense information for July:

What is the total cost for the marketing category of the value chain?

A)$71,000
B)$179,000
C)$186,000
D)$244,000

Question 64

Lucky Cow Dairy provided the following expense information for May:

What is the total cost for the marketing category of the value chain?

A)$69,000
B)$188,000
C)$197,000
D)$267,000

Question 65

Lucky Cow Dairy provided the following expense information for May:

What is the total cost for the production category of the value chain?

A)$496,000
B)$202,000
C)$180,000
D)$330,000

Question 66

Lucky Cow Dairy provided the following expense information for May:

What is the total cost for the customer service category of the value chain?

A)$82,000
B)$16,000
C)$73,000
D)$10,000

Question 67

A product support hotline would be considered

A)marketing.
B)distribution.
C)production or purchases.
D)customer service.

Question 68

Delivery expenses are charged to which of the following areas?

A)Distribution
B)Customer service
C)Production or purchases
D)Marketing

Question 69

Place the value chain elements in the correct order by numbering them from 1 to 6.

Question 70

Joe's Bottling Company provided the following expense information for July:

What is the total cost for the customer service category of the value chain?

A)$68,000
B)$12,000
C)$20,000
D)$75,000

Question 71

Sneider Family Orange Groves processes a variety of fresh juices.The company has the following expenses for July:

What is the total cost for the design category of the value chain?

A)$122,000
B)$197,000
C)$152,000
D)$272,000

Question 72

Joe's Bottling Company provided the following expense information for July:

What is the total cost of research and development?

A)$55,000
B)$68,000
C)$65,000
D)$188,000

Question 73

Sneider Family Orange Groves processes a variety of fresh juices.The company has the following expenses for July:

What is the total cost for the distribution category of the value chain?

A)$28,000
B)$29,000
C)$222,000
D)$151,000

Question 74

Lucas Family Orange Groves processes a variety of fresh juices.The company has the following expenses for July:

What is the total cost for the customer service category of the value chain?

A)$2,000
B)$35,000
C)$80,000
D)$9,000

Question 75

Joe's Bottling Company provided the following expense information for July:

What is the total cost for the distribution category of the value chain?

A)$40,000
B)$43,000
C)$219,000
D)$171,000

Question 76

Sneider Family Orange Groves processes a variety of fresh juices.The company has the following expenses for July:

What is the total cost for the research and development category of the value chain?

A)$75,000
B)$78,000
C)$63,000
D)$197,000

Question 77

Lucky Cow Dairy provided the following expense information for May:

What is the total cost for the design category of the value chain?

A)$267,000
B)$188,000
C)$197,000
D)$125,000

Question 78

Joe's Bottling Company provided the following expense information for July:

What is the total cost for the production category of the value chain?

A)$457,000
B)$307,000
C)$148,000
D)$146,000

Question 79

Sneider Family Orange Groves processes a variety of fresh juices.The company has the following expenses for July:

What is the total cost for the marketing category of the value chain?

A)$272,000
B)$34,000
C)$152,000
D)$197,000

Question 80

Lucky Cow Dairy provided the following expense information for May:

What is the total cost for the distribution category of the value chain?

A)$217,000
B)$23,000
C)$20,000
D)$151,000