Practice Test 1 - 2-1 Practice Exam 1 PROBLEM 1 - Multiple...

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Unformatted text preview: 2-1 Practice Exam 1 PROBLEM 1 - Multiple Choice Questions 1.Which of the following is a fixed cost? a. A 5% sales commissions b. Direct labor c. Building rent d. Direct material e. Electricity used to run production machineries. 2.Which of the following is NOT a conversion cost? a. Parts b. Labor c. Supervision d. Maintenance e. Electricity 3.Managerial accounting: a.focuses only on historical data. b.is governed by GAAP. c.focuses primarily on the needs of managers within the organization. d.provides information for parties external to the organization. e.emphasizes on preparing financial statements and other financial reports. 4. The value chain of a manufacturer would tend to include activities related to: A. manufacturing. B. research and development. C. product design. D. marketing. E. all of the above. 5. Which of the following is a product cost? A. Glass in an automobile. B. Advertising. C. The salary of the vice president-finance. D. Rent on a factory. E. Both "A" and "D." 6. The accounting records of Tacoma Company revealed the following costs: direct materials used, $170,000; direct labor, $350,000; manufacturing overhead, $400,000; and selling and administrative expenses, $220,000. Tacoma's product costs total: A. $520,000. B. $750,000. C. $920,000. D. $1,140,000. E. some other amount. 7. Which of the following is a period cost? A. Direct material. B. Advertising expense. C. Depreciation on cars driven by a firm's president and treasurer. D. Miscellaneous supplies used in production activities. E. Both "B" and "C." 2-2 8. The accounting records of Hill Corporation revealed the following selected costs: Sales commissions, $40,000; factory & plant supervision, $94,000; and administrative expenses, $185,000. Hill's period costs total: A. $40,000....
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Practice Test 1 - 2-1 Practice Exam 1 PROBLEM 1 - Multiple...

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