Accounting 212 chapter 1 Quiz Questions

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Inventory which is partially complete is known as
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work in process
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Production activities include
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using materials, incurring overhead costs, production workers assembling products
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A company reports Cost of goods manufactured of $50,000 on the statement of cost of goods manufactured. If the beginning balance in Work in process inventory was 20,000 and the ending balance was 25,000, then the total manufacturing costs were ______.
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manufacturing costs + beginning work in process inventory – ending work in process inventory = costs of goods manufactured; (20,000) + 25,000 + 50,000 = 55,000
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Consider a company that manufactures picture frames. Which of the following costs would be considered direct materials? Oak wood used for frame, wage of assembly line worker, salary of production supervisor, glass used in frame
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Oak wood used for frame, glass used in frame
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Managerial accounting is different from financial accounting in that
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managerial accounting is used in making planning and control decisions and financial accounting is used primarily in making credit decisions
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Partially complete inventory is known as…
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work in process
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A schedule of cost of goods manufactured has the following main sections:
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Direct materials, overhead, computation of cost of goods manufactured, direct labor
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The main purpose of managerial accounting is similiar to the main purpose of financial accounting. T/F
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True
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A manufacturing company reports the following items: Finished goods inventory, beginning balance: $1000 Finished goods inventory, ending balance: $1200 Cost of goods manufactured: $5000 The cost of goods sold is: $_______
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1000+5000-1200 = 4800
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Conversion costs consist of:
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factory overhead and direct labor
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The institute of management accountants’ statement of ethical professional practice requires members to:
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act with integrity and be competent
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Activities such as using materials and labor to produce finished products are considered ___________ activities
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production
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List the following in the order in which they occur, with the first activity on top. (Sales activity, production activity, materials activity)
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materials activity, production activity, sales activity
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The main focus of managerial accounting is providing
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specific information
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The managerial accountant at ABC company has reported that the inventory records do not match the actual inventory count. Management is concerned that the missing inventory is due to employee theft. To help prevent this, management should:
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adopt a code of ethics, verify inventory records, review the inventory handling procedures
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Consider the production department of a manufacturer of laptop computers. Classify the cost of the factory maintenance manager’s salary
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Fixed, indirect, product
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A period cost is
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expensed when incurred
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Activities such as purchasing and storing raw materials are considered ____________ activities
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materials
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Managerial accounting has which characteristics?
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internal users, monetary and nonmonetary information, emphasis on projects, processes and subdivisions
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Those who work directly on the product to convert to raw materials into a finished product are known as
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direct labor
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In what order do these activities occur (distribution, production, marketing, design, service)?
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Design, production, marketing, distribution, service
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materials activities include
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storing and purchasing materials
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Managers use an internal control system to:
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promote efficient operations, protect assets, ensure reliable accounting
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The managerial accountant at XYZ company told her friend that the company expects to announce a major recall in a few weeks. The friend promptly sells all her stock in XYZ. The accountant violated which IMA statement of ethical professional practice standards?
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Confidentiality and integrity
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The primary difference between the income statement for a merchandising company and a manufacturing company is in the ______ section.
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cost of goods sold
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Managerial accounting systems report both monetary and nonmonetary information. Examples of nonmonetary information include the
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quality of purchase decisions
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The following items would be included in the overhead section of the schedule of cost of goods manufactured
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factory insurance, factory supplies used, factory utilities
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Which of the following are indirect costs for the finishing department of a furniture manufacturing plant?
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plant managers salary, rent on the manufacturing facility, electricity cost for the plant
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Direct and indirect materials are known as
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raw materials
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A series of activities that add value to a company’s products or services is called
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value chain
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A company reported Cost of Goods manufactured of $55,000 on the manufacturing statement. If the beginning work in process inventory was $5000 and total manufacturing costs were 60,000, then the ending balance work in process inventory was ________.
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Manufacturing costs + beginning work in process inventory – ending work in process inventory = cost of goods manufactured; 60,000 + 5,000 – ending work in process inventory = 55,000; = 10,000
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Which of the following are product costs for a manufacturer?
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Direct materials, depreciation on the factory equipment
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Production activities include:
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using materials, production workers assembling products, incurring overhead costs
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A company began the year with $500 in raw materials and purchased 10,250 more during the year. If the company has $725 in raw materials at the end of the year, the they would report direct materials used of $ ______ on the schedule of cost of goods manufactured.
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500 +10,250 – 725 = 10,025
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The main difference between merchandising companies is that merchandising companies ________ (buy/produce) goods ready for sale and manufacturing companies _______ (buy/produce) goods.
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buy, produce
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Managerial accounting has which of the following characteristics?
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monetary and nonmonetary information, internal users, emphases on projects, processes and subdivisions
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Consider the production department of a manufacturer of laptop computers. Classify the cost of the processor chips.
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direct, product, variable
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Which of the following are direct costs for the shoe department at a local department
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cost of manager, show department manager’s salary
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True or false: the main purpose of managerial accounting is to provide general-purpose financial statements
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false
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Direct materials for an automobile manufacturer would include all of the following:
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steering wheels, bumpers, tires
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understanding the changing needs of customers is referred to as:
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customer orientation
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Classify the cost of hourly workers who clean carpets for customers
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variable, direct
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Activities such as selling and storing finished products are considered
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sales activities
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True/false: factory overhead are all manufacturing costs except direct materials and direct labor
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true
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T/F: Finished goods are products which are partially complete
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false
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Examples of managerial non monetary information includes the:
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quality of purchase decisions
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Which of the following are fixed costs relative to the number of units produced and sold?
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store rent, manager’s salary, straight-line depreciation
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What characteristics describe managerial accounting?
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used to making planning and control decisions, many projections and estimates
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What types of information does managerial accounting provide?
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internal, financial, non-financial
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The efforts of employees who work directly to convert direct materials into the finished product are referred to as
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direct labor
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Those who work directly on the product to convert raw materials into a finished product are known as
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direct labor
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TQM
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evaluating business activities with a focus on improving activity
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JIT manufacturing
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establishing better relationships with vendors to ensure on-time delivery quality raw materials
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E-commerce
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updating the company’s website to promote online sales transactions
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customer orientation
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survey customers to better align operating practices with their expectations
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Lean practices include those which are designed to eliminate waste while still satisfying the customer. Examples of lean practices include all of the following:
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JIT manufacturing, continuous improvement, total quality management
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The following items would be included in the overhead section of the schedule of cost of goods manufactured:
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factory utilities, factory supplies used, factory insurance
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The inventory account used by manufacturing companies to record costs of completed products ready for sale is called
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finished goods inventory
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A merchandising company usually has ______ inventory account. A manufacturing company usually has ____ inventory accounts.
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1, 3
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Prime costs consist of
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direct labor and direct materials
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Raw materials inventory includes
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direct and indirect materials
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Major manufacturing company has direct materials used of $50,000, beginning raw materials inventory of $10,000 and ending raw materials inventory of $8,000. Compute the raw materials inventory turnover
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5.55
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Sales activities include:
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storing finished products, selling finished products
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Which of the following are inventory accounts commonly found in manufacturing companies?
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Raw materials inventory, work in process inventory, finished goods inventory
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Minor manufacturing company has ending raw materials inventory of $15,000, raw materials used of $60,000. Calculate the days’ sales in raw materials inventory.
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91.25 15,000/60,000 x 365 = 91.25

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