Managerial Accounting, 3e (Braun/Tietz) Chapter 2 Building Blocks of Managerial Accounting
1) Service companies must carry a large amount of inventory to meet consumer demand. Answer: FALSE Diff: 1 LO: 2-1 EOC: E2-1 AACSB: Reflective Thinking Learning Outcome: Define and use cost-volume-profit analysis to analyze the effects of changes in costs and volume on a company's profits
2) Manufacturing companies usually have three types of inventory. Answer: TRUE Diff: 1 LO: 2-1 EOC: E2-1 AACSB: Reflective Thinking Learning Outcome: Define and use cost-volume-profit analysis to analyze the effects of changes in costs and volume on a company's profits
3) Retailers sell their products to consumers. Answer: TRUE D) merchandise inventory. Answer: C Diff: 1 LO: 2-1 EOC: S2-2 AACSB: Reflective Thinking Learning Outcome: Define and use cost-volume-profit analysis to analyze the effects of changes in costs and volume on a company's profits
18) Macy's (the department store chain) classifies its clothing held for sale as A) merchandise inventory. B) raw materials inventory. C) work in process inventory. D) finished goods inventory. Answer: A Diff: 1 LO: 2-1 EOC: S2-2 AACSB: Reflective Thinking Learning Outcome: Define and use cost-volume-profit analysis to analyze the effects of changes in costs and volume on a company's profits
19) American Eagle Outfitters classifies the denim jeans on the shelves at its retail locations as A) finished goods inventory. B) work in process inventory. C) merchandise inventory. D) raw materials inventory. Answer: C Diff: 1 LO: 2-1 EOC: S2-2 AACSB: Reflective Thinking Learning Outcome: Define and use cost-volume-profit analysis to analyze the effects of changes in costs and volume on a company's profits
20) How would Chevrolet classify its partially completed vehicles? A) Finished goods B) Raw materials C) Work in process D) Supplies Answer: C Diff: 1 LO: 2-1 EOC: S2-2 AACSB: Reflective Thinking Learning Outcome: Define and use cost-volume-profit analysis to analyze the effects of changes in costs and volume on a company's profits
21) In the United States,
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