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Accounting Concepts – MCQs
31 questions. Click to practice.
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Correct options are highlighted when revealed.
1.
In project costing, what is the term used for wages paid to workers during periods of inactivity caused by material shortages?
overhead wages
wellness wages
idle time wages
material delay wages
zero wages
2.
Given that the direct material cost amounts to $85,000 and the direct manufacturing labor cost is $25,000, what is the total prime cost?
$13,500
$55,600
$60,000
$110,000
Not applicable
3.
Given that the direct material cost amounts to $5,500 and the prime cost totals $25,000, what is the value of the direct manufacturing labor?
$19,500
$30,500
$45,500
$22,500
Not applicable
4.
Which category includes the expenses for employee health care premiums and pension contributions?
payroll fringe benefits
medical expenses
insurance premiums
employee wages
none of the above
5.
What term is used to describe the stock of completed products that have not been sold yet?
finished goods stock
indirect supplies inventory
raw materials stock
in-progress inventory
none of the above
6.
To determine the manufacturing labor costs, which cost is deducted from the manufacturing overhead?
Conversion cost
Direct material cost
Prime cost
Indirect labor cost
Selling and administrative expenses
7.
When the purchase price of raw materials is used in production and included as part of the cost object, how is this cost categorized?
direct material expenses
indirect material expenses
direct labor expenses
indirect labor expenses
none of the above
8.
If the direct material expenses amount to $75,000 and the direct manufacturing labor costs are $20,000, what is the total prime cost?
$55,000
$37,500
$95,000
$26,000
Not applicable
9.
Which accounting discipline involves determining product costs, collecting data for planning, and analyzing information to support decision-making?
financial accounting
cost accounting
account analysis
marketing expense tracking
none of the above
10.
Given that direct labor costs amount to $7,000, idle time wages are $2,000, and the overtime premium is $950, what is the total labor cost?
$5,850
$5,950
$9,950
$10,050
None of the above
11.
When direct material expenses are combined with direct manufacturing expenses, which cost category is determined?
operating costs
prime costs
selling costs
inventory costs
none of the above
12.
If the direct labor cost amounts to $5,000, the wages for idle time are $1,000, and the overtime premium is $450, what is the total labor cost?
$4,450
$6,450
$21,500
$14,300
Not applicable
13.
If the prime cost amounts to $50,000 and the direct labor cost is $10,000, what is the value of the direct material cost?
$40,000
$60,000
$52,000
$20,000
Cannot be determined
14.
On an income statement, what term describes the costs that are recorded as cost of goods sold once the manufactured products are sold?
Product costs
Completed goods expenses
Production facility overhead
Manufacturing indirect costs
No cost
15.
Which of the following terms are commonly used in manufacturing cost accounting systems?
production expenses
primary costs
transformation costs
both primary and transformation costs
none of the above
16.
If the total conversion cost amounts to $2,000 and the manufacturing overhead is $7,000, what is the value of the direct labor cost involved in manufacturing?
$7,000
$13,000
$9,000
$5,000
Cannot be determined
17.
Which category best describes the labor involved in producing a product?
direct labor expenses in manufacturing
manufacturing labor overhead
costs associated with work in progress
expenses related to completed goods
none of the above
18.
When direct labor costs are combined with manufacturing overhead, what is the resulting total cost called?
administrative expenses
conversion costs
selling expenses
inventory costs
operating expenses
19.
Which cost categories include direct manufacturing labor expenses?
Production costs
Prime expenses
Conversion expenses
Both prime and conversion expenses
None of the above
20.
What is the term used for the additional payment given to factory workers for extra hours worked?
employee bonus
overtime premium
production bonus
salary supplement
none of the above
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