Chapter 14 Accounting Recommended WileyPlus MC – Flashcards

T/F Managerial accounting applies to all types of businesses, including service, merchandising, and manufacturing, as well as to all forms of business organizations.

Which of the following statements is not true about managerial accounting? A. It is highly aggregated. B. Reports are generated as needed. C. It does not require an audit by a CPA. D. It is primarily for internal users such as officers and managers

Which of the following statements is true about managerial accounting? A. It pertains to a business as a whole. B. It provides more detailed information than financial accounting does. C. It is primarily for internal users such as stockholders and managers. D. It must be prepared using generally accepting accounting principles.

Managerial Accounting... A. is governed by generally accepted accounting principles. B. places emphasis on special-purpose information. C. is limited to cost data. D. pertains to the entity as a whole and is highly aggregated.

All of the following are distinguishing features of managerial accounting except... A. internal users. B. reports pertaining to subunits of the entity. C. to provide special-purpose information. D. independent audits.

T/F Planning is the process of keeping the company's activities on track.

Which of the following are considered to be management's three broad functions? A. Conducting, directing, manufacturing B. Planning, directing, and controlling C. Planning, calculating, and controlling D. Controlling, directing, manufacturing

Which of the following is considered part of the controlling process? A. Coordinating activities and human resources to produce a smooth running operation B. Keeping the company's activities on track C. Looking ahead and establishing objectives D. Implementing planned objectives

After passage of the Sarbanes-Oxley Act of 2002 A. CEOs and CFOs must certify that financial statements give a fair presentation of the company's operating results. B. reports prepared by managerial accountants must be audited by CPAs. C. the audit committee, rather than top management, is responsible for the company's financial statements. D. reports prepared by managerial accountants must comply with generally accepted accounting principles (GAAP).

The management function that requires management to look ahead and establish objectives is A. directing. B. evaluating. C. planning. D. controlling.

The process of keeping the company's activities on track is A. directing. B. evaluating. C. planning. D. controlling.

T/F Indirect material costs are easily traced to products because of their physical association with the finished product.

T/F Manufacturing overhead consists of costs that are indirectly associated with the manufacture of the finished product.

Which one of the following is not a manufacturing cost? A. Advertising cost B. Wages of assembly workers C. Factory maintenance D. Wheels that are being installed on new automobiles being manufactured

Which of the following answer choices lists the three manufacturing costs? A. Raw materials, work in process, and finished goods B. Work in process, finished goods, and cost of goods sold C. Indirect materials, indirect labor, and factory-related costs D. Direct materials, direct labor, and manufacturing overhead

Which of the following costs would a computer manufacturer include in manufacturing overhead? A. The wages earned by computer assemblers. B. Depreciation on testing equipment. C. The cost of the memory chips. D. The cost of the disk drives.

Which of the following is not an element of manufacturing overhead? A. Plant manager's salary. B. Product inspector's salary. C. Sales manager's salary. D. Factory repairman's wages.

Manufacturing overhead includes all of the following except A. indirect labor. B. maintenance. C. depreciation. D. direct materials.

On average, studies have shown that the smallest component of total manufacturing cost is A. factory overhead. B. manufacturing overhead. C. direct materials. D. direct labor.

T/F Product costs are costs that are a necessary and integral part of producing the finished product.

Barry's BarBQue incurred the following costs: $1,400 for ribs, 45 hours of labor to cook the ribs at $10 per hour, $50 for seasoning and sauce, $300 for signs to advertise the ribs, $150 to clean the grill after cooking the ribs, and $100 of administrative costs. How much are total product costs? A. $1,850 B. $2,150 C. $2,350 D. $2,050

Which group of costs consists of only product costs? A. Factory maintenance, sales commissions, salaries paid to sales clerks B. Direct labor, direct materials, and selling expenses C. Direct labor, indirect labor, factory utilities D. Indirect labor, factory building depreciation, administrative expenses

Indirect labor is a A. non-manufacturing cost. B. period cost. C. product cost. D. raw material cost.

Which of the following costs are classified as a period cost? A. Wages paid to an assembly worker. B. Wages paid to a factory custodian. C. Wages paid to a production department supervisor. D. Wages paid to a cost accountant department supervisor.

Product costs include each of the following except A. direct labor. B. direct materials. C. manufacturing overhead. D. selling and administrative expenses.

Each of the following is a period cost except A. Indirect labor. B. selling expenses. C.administrative expenses. D. non-manufacturing costs.

Pharmco incurred the following costs while manufacturing its product: Materials used in production, $120,000; factory depreciation, $60,000; property taxes on the administrative offices, $12,000; labor costs of assembly-line workers, $95,000; factory supplies used, $8,000; advertising expense, $13,000; property taxes on the factory, $20,000; delivery expense, $23,000; salaries of the sales staff, $53,000; and sales commissions, $17,000. The total product costs for Pharmco are A. $421,000. B. $315,000. C. $391,000. D. $303,000.

T/F Manufacturers compute cost of goods sold by adding the beginning finished goods inventory to the cost of goods purchased and subtracting the ending finished goods inventory.

Which of the following would you find on the income statement of a manufacturing company, but not on the income statement of a merchandising company? A. Raw materials B. Work in process C. Cost of goods purchased D. Cost of goods manufactured

One key difference appears when comparing the income statements of a manufacturing company to a merchandising company. What is that difference? A. Cost of goods manufactured is subtracted from sales to get gross profit on a manufacturing income statement, while cost of goods purchased is subtracted from sales to get gross profit on a merchandising income statement. B. Manufacturing companies use cost of goods manufactured and merchandising companies use cost of goods purchased. C. Manufacturing companies use work in process, raw materials, and finished goods inventory balances to calculate cost of goods sold, while merchandising companies use only merchandise inventory balances. D. Cost of goods sold equals the cost of merchandise purchased for a merchandising company, while cost of goods sold equals the cost of raw materials purchased for a manufacturing company.

For the year, Redder Company has cost of goods manufactured of $600,000, beginning finished goods inventory of $200,000, and ending finished goods inventory of $250,000. The cost of goods sold is A. $600,000. B. $550,000. C. $450,000. D. $500,000.

Cost of goods available for sale is reported on the income statement of A. a merchandising company but not a manufacturing company. B. a manufacturing company but not a merchandising company. C. a merchandising company and a manufacturing company. D. neither a manufacturing company nor a merchandising company.

For a manufacturing firm, cost of goods available for sale is computed by adding the beginning finished goods inventory to A. cost of goods purchased. B. total manufacturing costs. C. cost of goods manufactured. D. net purchases.

The principal difference between a merchandising and a manufacturing income statement is the A. revenue section. B. cost of goods sold section. C. extraordinary item section. D. operating expense section.