Accounting Exam 2 – Flashcards
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Managerial accounting applies to each of the following types of businesses except
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it applies to all firms
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Managerial accounting information is generally prepared for
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managers
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Managerial accounting does not encompass
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calculating earnings per share
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Which of the following statements about internal reports is not true
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most internal reports are summarized rather than detailed
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Both direct and indirect materials are
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raw materials
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Manufacturing costs include
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direct materials, direct labor, manufacturing overhead
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Which of the following is not a cost element in manufacturing a product
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office salaries
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Which of the following is not classified as direct labor
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wages of supervisers
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Because of automation, which component of product cost is declining
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direct labor
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Manufacturing costs that cannot be classified as either direct materials or direct labor are known as
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manufacturing overhead
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What is work in progress inventory usually described as
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costs applicable to units that have been started in production but are only partially completed
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Cost of goods manufactured calculation
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beginning WIP+ direct materials used+ direct labor + manufacturing overhead -ending WIP
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For inventoriable costs to become expenses under the matching principle
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the product to which they attach must be sold
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For a manufacturing company which of the following is an example of a period cost rather than a product cost
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wages of salesperson
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Property taxes on a manufacturing plant are an element of
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product cost but not period
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Which of the following does not appear on the balance sheet of a manufacturing company
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cost of goods manufactured
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Which of the following is a component of cost accounting
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involves measuring product costs
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The two basic types of cost accounting systems are
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job order and process cost systems
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A process cost system would most likely be used by a company that makes
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breakfast cereal
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Process costing is used when
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the production process is continuous
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Which one of the following best describes a job cost sheet
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form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job
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The principal accounting record used in assigning costs to jobs is
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a job cost sheet
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Manufacturing overhead is applied to each job
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by means of a predetermined overhead rate
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Which one should be equal to the balance of the WIP inventory account at the end of the period
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the sum of the costs shown on the job cost sheets of unfinished jobs
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Predetermined overhead rate is based on the relationship between
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estimated annual costs and expected annual activity
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The predetermined overhead rate is
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determined at the beginning of the year
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Overhead application is recorded with a
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credit to manufacturing overhead
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If manufacturing overhead account has a debit balance at the end of the year it means that
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actual overhead costs were greater than overhead costs applied to jobs
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At the end of the year, any balance in the manufacturing overhead account is generally eliminated by adjusting
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cost of goods sold
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If actual overhead is greater than applied manufacturing overhead then manufacturing overhead is
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underapplied
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The existence of under or over applied overhead at the end of the year
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requires an adjustment to cost of goods sold
