Unit Test #3 Grade 13F

One MAJOR difference between financial accounting and management accounting is that

• financial accounting uses only current and future information

• financial accounting reports are prepared primarily for internal users

• general accepted accounting principles do not apply to management accounting

• management accounting is mandatory for companies trading on the stock exchange

Conversion cost consists of:

• direct labor

• manufacturing overheads

• direct labor and direct materials

• direct labor and manufacturing overheads

Which of the following is not period cost?

• marketing

• manufacturing

• research and development

• general and administrative

A firm has an annual demand of 2 000 units. The cost of placing one order is $800 and there is a holding cost of $8 per unit. What is the firm's annual carrying cost?

• $11 000

• $10 000

• $9 000

• $8 000

Wages paid to machine operators on an assembly line are classified as a

• period cost

• direct materials cost

• manufacturing overhead cost

• direct manufacturing labor cost

Indirect labor cost is NOT used in the calculation of

• prime cost

• factory overhead

• total manufacturing cost

• cost of goods manufactured

Keystone Ltd produces a product under licence from Xango Ltd. At the end of each year, Keystones Ltd has to pay Xango Ltd a licence fee as follow:

For the for first 60 000 litres $30 000 for every litre thereafter $0.30

How is the licence fee classified

• step

• mixed

• fixed

• variable

Barry operates a guesthouse. Which of the following cost items would be classified as variables in the costing of the guest rooms?

• water

• furniture

• depreciation on building

• wages of housekeeper staff

In July 2016 the beginning balance of the raw materials inventory account for Kayla Inc. was $46 000. The ending inventory balance for July was $47 000. Raw materials used during the month totalled was $127 120.

The cost of raw materials purchased during the month was

• $125 320

• $126 120

• $128 120

• $174 120

Gibson Manufacturing uses machine hours to allocate manufacturing overhead to all jobs. For a specific job, the budgeting manufacturing overhead cost is$30 000 and the budgeted labour hours and budgeted machine hours are $60 000 and $100 000 respectively. The predetermined overhead rate per machine hour is

• $0.30

• $0. 50

• $0.60

• $3 33