Accounting HW 1 – Flashcards

The direct labor costs related to factory workers and manufacturing costs related to machine, rent, depreciation costs are added to

When the completed goods are moved out of the factory, they go to

In the cost of goods sold model, the costs flow from the raw materials storeroom to

When the product is sold, the accumulated costs in the ___________ are moved to cost of goods sold.

All of the following are considered phases of the management process except

The process by which managers run day-to-day operations is called

______ is the philosophy of continually improving employees, business processes, and products.

_____ are identified with and can be traced to a cost object

______ cannot be identified with or traced to a cost object.

_____ consist of selling and administrative costs

Inventory that consists of the costs of the direct and indirect materials that have not yet entered the manufacturing process is known as

Inventory that consists of the direct materials, direct labor, and factory overhead costs for products that have entered the manufacturing process but are not yet completed is known as

The total cost of making products that are available for sale during the period is called

Which of the following are ways managerial accounting provides information and reports for managers to use in operating the business? a. Managerial accounting provides the cost of manufacturing a product, which can be used to determine its selling price. b. Managerial accounting allows for comparing the costs of manufacturing products over time and can be used to monitor and control the cost of direct materials, direct labor, and factory overhead. c. Performance reports allow management to identify any large amounts of scrap materials or employee downtime. d. All of these choices are correct.

Managerial accounting provides performance reports to internal users. Which of the following is considered an advantage of performance reports? a. Performance reports allow management to identify any large amounts of scrap materials or employee downtime. b. A report could analyze the potential efficiencies and dollar savings of purchasing computerized equipment to speed up the production process. c. A report could analyze how many units need to be sold to cover operating costs and expenses and used to set monthly selling targets and bonuses for sales personnel. d. All of these choices are correct.

Monitoring the operating results of implemented plans and comparing the actual results with expected results

Inherent in planning, directing, controlling, and improving

Long-range courses of action

Direct Materials, Direct Labor, and Factory Overhead Identify the following costs as direct materials, direct labor, or factory overhead for an automobile manufacturer: a. Wages of employees that operate painting equipment b. Wages of the plant supervisor c. Steel d. Oil used for assembly line machinery

Prime and Conversion Costs Identify the following costs as a prime cost (P), conversion cost (C), or both (B) for an automobile manufacturer: a. Wages of employees that operate painting equipment b. Wages of the plant manager c. Steel d. Oil used for assembly line machinery

Product and Period Costs Identify the following costs as a product cost or a period cost for an automobile manufacturer: a. Steel b. Wages of employees that operate painting equipment c. Rent on office building d. Sales staff salaries

Classifying Costs as Materials, Labor, or Factory Overhead Indicate whether the following costs of Procter & Gamble, a maker of consumer products, would be classified as direct materials cost, direct labor cost, or factory overhead cost: a. Plant manager salary for the Iowa City, Iowa, plant b. Maintenance supplies c. Salary of process engineers d. Wages paid to Packaging Department employees in the Bear River City, Utah, paper products plant e. Scents and fragrances used in making soaps and detergents f. Wages of production line employees at the Pineville, Louisiana, soap and detergent plant g. Depreciation on assembly line in the Mehoopany, Pennsylvania, paper products plant h. Packaging materials i. Resins for body wash products j. Depreciation on the Auburn, Maine, manufacturing plant

Classifying Costs as Product or Period Costs For apparel manufacturer Abercrombie & Fitch, Inc., classify each of the following costs as either a product cost or a period cost: a. Research and development costs b. Depreciation on sewing machines c. Fabric used during production d. Depreciation on office equipment e. Advertising expenses f. Repairs and maintenance costs for sewing machines g. Salary of production quality control supervisor h. Utility costs for office building i. Sales commissions j. Salaries of distribution center personnel k. Wages of sewing machine operators l. Factory janitorial supplies m. Chief financial officer's salary n. Travel costs of media relations employees o. Factory supervisors' salaries p. Oil used to lubricate sewing machines q. Property taxes on factory building and equipment

Concepts and Terminology From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences: a. Advertising costs are usually viewed as (period, product) costs. b. Feedback is often used to (improve, direct) operations. c. Payments of cash or the commitment to pay cash in the future for the purpose of generating revenues are (costs, expenses). d. A product, sales territory, department, or activity to which costs are traced is called a (direct cost, cost object). e. The balance sheet of a manufacturer would include an account for (cost of goods sold, work in process inventory). f. Factory overhead costs combined with direct labor costs are called (prime, conversion) costs. g. The implementation of automatic, robotic factory equipment normally (increases, decreases) the direct labor component of product costs. decreases