ACCT. Ch 18 – Flashcards
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The series of activities that add value to a company's products or services is called a value chain.
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True
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Prime costs include???
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Direct materials and direct labor
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The salary paid to the assembly line supervisor would normally be classified as:
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Indirect labor
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Both financial and managerial accounting rely on accepted principles that are enforced through an extensive set of rules and guidelines.
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False
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Which of the following is not part of the sales activity in the flow of manufacturing activities?
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Ending Work in Process Inventory
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Costs that are capitalized as inventory when they are incurred are called:
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Product Costs
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Factory overhead costs may include all of the following except:
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Selling Costs
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Marshall Corporation incurred costs for materials and labor needed to manufacture its products. These costs are an example of:
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Product Costs
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A management concept that seeks to uncover and eliminate waste in all aspects of business activities is called:
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Total Quality Management
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Indirect materials are accounted for as factory overhead because they are not clearly identified with specific product units.
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True
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Product costs are capitalized as inventory on the balance sheet and period costs are expenses on the income statement.
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True
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Under a just-in-time manufacturing system, large quantities of inventory are accumulated throughout the factory to be certain that components are available each time that they are needed.
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False
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Managerial accounting reports and information are used by external users and financial accounting by internal users.
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False
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Jenny, an employee of Toucan Company, used company assets for her own personal gain. This is an example of
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Fraud
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Manufacturing costs other than direct materials and direct labor, and are not readily traceable to specific units or batches of production are called:
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Factory Overhead
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Prime costs consist of direct labor and factory overhead.
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False
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Cost concepts such as variable, fixed, mixed, direct and indirect apply only to manufacturers and not to service companies.
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False
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Both financial and managerial accounting affect user's decisions and actions.
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True
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The schedule of cost of goods manufactured is divided into four parts consisting of all of the following except:
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Computation of cost of goods sold.
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Adopting a lean business model should have no effect on cost in a modern manufacturing environment.
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False
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Operating Income is Computed by:
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Gross profit - operating expenses
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Gross profit is computed by
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Sales - COGS
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Continous Improvement
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Rejects the notion go "good enough"
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A d direct cost is one that:
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is traceable to the cost object
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Cost that are incurred as part of the manufacturing process but are not clearly traceable to the specefic unit of product/batches are called:
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Factory Overhead
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The three major components of manufacturing a product are:
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Direct materials Direct labor Factory Overhead
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How to compute direct materials used:
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beginning raw materials + Purchases = Raw materials available for use - ending raw materials
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Income Statement of goods manufactured includes:
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Sales, COGS, Gross profit, Operating expenses and operating income
