Question 1

Select the appropriate definition of each of the items listed below.
-Gross margin − selling and administrative expenses

Accepted Answer

Operating income is calculated by subtracting selling and administrative expenses from the gross margin.

Question 2

Select the appropriate classification of the items listed below.
-Nails used in the manufacture of furniture

Accepted Answer

Nails used in the manufacture of furniture are considered an overhead cost because they are indirect materials that are not directly traceable to a specific product.

Question 3

Select the appropriate definition of each of the items listed below.
-The total cost of goods completed during the current period

Accepted Answer

Cost of goods manufactured refers to the total cost of goods completed during the current period, including direct materials, direct labor, and manufacturing overhead.

Question 4

Select the appropriate item for each of the definitions listed below.
-Gross margin − period costs

Accepted Answer

Operating income is calculated by subtracting period costs (such as selling, general, and administrative expenses) from the gross margin.

Question 5

Select the appropriate definition for each of the items listed below.
-The cost of units unfinished at the end of the current period

Accepted Answer

The cost of units unfinished at the end of the current period is considered work-in-process inventory. Choice B is incorrect because finished goods inventory would be the cost of units completed but not yet sold. Choice C is incorrect because cost of goods sold is the cost of goods that were sold during the period. Choice D is incorrect because cost of goods manufactured is the total cost of goods produced during the period. Choice E is incorrect because total manufacturing costs includes both direct and indirect costs that are incurred during the manufacturing process.

Question 6

Select the appropriate definition for each of the items listed below.
-(direct materials + direct labour + overhead)+/− the change in work-in-process inventory from the beginning to the end of the current period

Accepted Answer

This equation represents the cost of goods manufactured, which is the total cost of producing goods during the current period. It includes direct materials, direct labour, and overhead, plus or minus any change in work-in-process inventory.

The other options are not applicable to this equation as: 
- Work-in-process inventory is only a part of the equation, not the entire result.
- Finished goods inventory is not included in this equation.
- Cost of goods sold is the cost of goods that have been sold during a period and is calculated separately.
- Total manufacturing costs include direct materials, direct labour, and overhead, but do not account for any change in work-in-process inventory.

Question 7

Select the appropriate definition of each of the items listed below.
-The difference between sales revenue and cost of goods sold

Accepted Answer

The difference between sales revenue and cost of goods sold is known as gross margin.

Question 8

Select the appropriate definition for each of the items listed below.
-Direct materials + direct labour + overhead

Accepted Answer

Direct materials, direct labour, and overhead are all components of total manufacturing costs.

Answer: A
 Work-in-process inventory refers to products that are partially completed but not yet finished. The cost of these products includes direct materials, direct labour, and overhead.

Answer: D
 Cost of goods manufactured refers to the total cost of making and completing products. It includes direct materials, direct labour, and overhead, as well as any beginning work-in-process inventory and minus ending work-in-process inventory.

Answer: C
 Cost of goods sold refers to the cost of making and selling products. It includes direct materials, direct labour, and overhead, as well as any beginning finished goods inventory and minus ending finished goods inventory.

Answer: B
 Finished goods inventory refers to products that are completed and ready to be sold. The cost of these products includes direct materials, direct labour, and overhead.

Question 9

Select the appropriate item for each of the definitions listed below.
-Marketing and distributing costs

Accepted Answer

Selling expenses typically include marketing and distributing costs, such as advertising, sales commissions, and promotional materials.

Question 10

Select the appropriate item for each of the definitions listed below.
-Number of units sold multiplied by sales price per unit

Accepted Answer

Sales revenue is defined as the total amount of money received from the sale of goods or services, which is calculated by multiplying the number of units sold by the sales price per unit.

Question 11

Select the appropriate item for each of the definitions listed below.
-Number of units sold multiplied by product cost per unit

Accepted Answer

The answer of Select the appropriate item for each of...

Question 12

Select the appropriate definition for each of the items listed below.
-The cost of units finished but not sold at the end of the current period

Accepted Answer

Finished goods inventory represents units that have been completed but have not yet been sold.

Question 13

Select the appropriate classification of the items listed below.
-Cost of engines in the manufacture of airplanes

Accepted Answer

Cost of engines in the manufacture of airplanes is a direct cost that can be easily traced to the manufacturing process of airplanes. Therefore, it falls under the classification of Direct materials.

Question 14

Select the appropriate item for each of the definitions listed below.
-Sales − cost of goods sold

Accepted Answer

The formula for gross margin is Sales revenue - Cost of goods sold. Therefore, A (gross margin) is the appropriate item for the given definition.

Question 15

Select the appropriate definition for each of the items listed below.
-(direct labour + overhead)/units produced

Accepted Answer

(direct labour + overhead)/units produced is the calculation for the per-unit conversion cost, which includes both direct labour and overhead costs associated with converting raw materials into finished goods.

Question 16

Select the appropriate definition for each of the items listed below.
-(total manufacturing costs + work in process beginning − work in process ending)/units produced

Accepted Answer

This formula is used to calculate the per-unit cost of goods manufactured.

Question 17

Select the appropriate classification of the items listed below.
-Salary of chief executive officer

Accepted Answer

The salary of the chief executive officer is considered an administrative expense, as it is an expense associated with the management and administration of the company.

Question 18

Select the appropriate definition for each of the items listed below.
-(direct materials + direct labour)/units produced

Accepted Answer

Per-unit prime cost is calculated by adding the direct materials and direct labor costs and then dividing by the number of units produced. This formula directly matches the definition given.

Question 19

Select the appropriate classification of the items listed below.
-professor's salary at a college

Accepted Answer

The answer of Select the appropriate classification of the items...

Question 20

Select the appropriate definition for each of the items listed below.
-Product cost per-unit × units sold

Accepted Answer

This calculation yields the cost of goods sold, which is the cost of producing the units sold during a period of time.

Quiz 2: Basic Managerial Accounting Concepts

Select the appropriate definition of each of the items listed below. -Gross margin − selling and administrative expenses

Select the appropriate classification of the items listed below. -Nails used in the manufacture of furniture

Select the appropriate definition of each of the items listed below. -The total cost of goods completed during the current period

Select the appropriate item for each of the definitions listed below. -Gross margin − period costs

Select the appropriate definition for each of the items listed below. -The cost of units unfinished at the end of the current period

Select the appropriate definition for each of the items listed below. -(direct materials + direct labour + overhead) +/− the change in work-in-process inventory from the beginning to the end of the current period

Select the appropriate definition of each of the items listed below. -The difference between sales revenue and cost of goods sold

Select the appropriate definition for each of the items listed below. -Direct materials + direct labour + overhead

Select the appropriate item for each of the definitions listed below. -Marketing and distributing costs

Select the appropriate item for each of the definitions listed below. -Number of units sold multiplied by sales price per unit

Select the appropriate item for each of the definitions listed below. -Number of units sold multiplied by product cost per unit

Select the appropriate definition for each of the items listed below. -The cost of units finished but not sold at the end of the current period

Select the appropriate classification of the items listed below. -Cost of engines in the manufacture of airplanes

Select the appropriate item for each of the definitions listed below. -Sales − cost of goods sold

Select the appropriate definition for each of the items listed below. -(direct labour + overhead) /units produced

Select the appropriate definition for each of the items listed below. -(total manufacturing costs + work in process beginning − work in process ending) /units produced

Select the appropriate classification of the items listed below. -Salary of chief executive officer

Select the appropriate definition for each of the items listed below. -(direct materials + direct labour) /units produced

Select the appropriate classification of the items listed below. -professor's salary at a college

Select the appropriate definition for each of the items listed below. -Product cost per-unit × units sold