Managerial Accounting: Midterm Discussion Questions

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Below is the “study guide” for the MidTerm Exam. Of the 100+ questions below –
65 of them are the MidTerm. No answers are provided in the study guide (since the whole idea is for you to” review and study” the material to prepare for the test).

True or False

Chapter 01

1. Much of managerial accounting is directed at gathering useful information about costs for planning and control decisions.

2. Direct materials are not usually easily traced to a product.

3. A variable cost changes in proportion to changes in the volume in activity.

4. 34. Product costs are expenditures necessary and integral to finished products.

5. Cost concepts such as variable, fixed, mixed, direct and indirect apply only to manufacturers and
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The number of units still in process that period.

76. A system of accounting in which the costs of each process are accumulated separately and then assigned to the units of product that passed through the process is a:
A. General cost accounting system.
B. Process cost accounting system.
C. Job order cost accounting system.
D. Manufacturing cost accounting system.

77. Which of the following characteristics applies to process cost accounting and not to job order cost accounting?
A. Use of a predetermined overhead rate.
B. Identifiable lots of production.
C. Equivalent units of production.
D. Labor time ticket for each employee.

78. An organizational unit of a factory that has the responsibility for partially manufacturing or producing a product is called a:
A. Production department.
B. Service department.
C. Primary department.
D. Responsibility department.

79. Direct material costs are recorded:
A. Indirectly to Goods in Process account.
B. Directly to a Goods in Process account.
C. Directly to a Finished Goods account.
D. Directly to a Cost of Goods Sold account.

80. The purchase of raw materials on account in a process costing system is recorded with a:
A. Debit to Purchases and a credit to Accounts
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To compute an equivalent unit of production, one must be able to reasonably estimate:
A. The percentage of completion.
B. Units completed.
C. Units started and completed.
D. Direct labor cost.

83. A department had 65 units which were 20% complete in beginning Goods in Process Inventory. During the current period, 77 units were transferred out. Ending Goods in Process Inventory was 30 units which were 20% complete. Using the Weighted Average method, what are the equivalent units produced if all direct material and direct labor are added uniformly throughout the process?
A. 83
B. 70
C. 100
D. 77

Chapter 04

84. A method of assigning overhead costs to a product using a single overhead rate is:
A. Plantwide overhead rate method.
B. Cost pool overhead rate method.
C. Departmental overhead rate method.
D. Overhead cost allocation method.

85. Which of the following would not be considered a product cost?
A. Direct labor costs.
B. Factory line worker's salary.
C. Cost accountant's salary.
D. Manufacturing overhead costs.

86. Overhead costs:
A. Are directly related to production.
B. Can be traced to units of product in the same way that direct materials

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