ACCT 2210 Test 1: Chapter 1 – Flashcards

T of 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 primarily for internal users such as officers and managers. B. It does not require an audit by a CPA. C. It is highly aggregated. D. Reports are generated as needed.

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

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

The management of an organization performs several broad functions. They are A. planning, directing, and selling. B. planning, directing, and controlling. C. planning, manufacturing, and controlling. D. directing, manufacturing, and controlling.

After passage of the Sarbanes-Oxley Act of 2002 A. reports prepared by managerial accountants must be audited by CPAs. B. CEOs and CFOs must certify that financial statements give a fair presentation of the company's operating results. 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. controlling. B. directing C. evaluating. D. planning.

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

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

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

T or 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 $100 of administrative costs. How much are total product costs?

Indirect labor is a A. nonmanufacturing cost. B. raw material cost. C. product cost. D.period cost.

Each of the following is a period cost except A. administrative expenses. B. indirect labor. C. nonmanufacturing costs. D. selling expenses.

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

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. Cost of goods manufactured B. Cost of goods purchased C. Work in process D. Raw materials

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. cost of goods manufactured. C. net purchases. D. total manufacturing costs.

T or F: The costs assigned to beginning work in process inventory are based on the manufacturing costs incurred in the prior period.

Checker Clackers, Inc. manufactures clackers. Checker's transactions and accounts included the following during June: Beginning Raw Materials 1,200 Ending Raw Materials 1,400 WIP Beginning 7,100 WIP Ending 6,800 Raw Materials Acquired 27,800 Cost of direct materials used in production 27,600 Sales commission to sell clackers 2,100 Direct Labor Cost 20,000 Total Manufacturing Overhead 28,900 How much is cost of goods manufactured for June?

The formula to determine the cost of goods manufactured is A. beginning raw materials inventory + total manufacturing costs - ending work in process inventory. B. beginning work in process inventory + total manufacturing costs - ending finished goods inventory. C. beginning finished goods inventory + total manufacturing costs - ending finished goods inventory. D. beginning work in process inventory + total manufacturing costs - ending work in process inventory.

The sum of the direct materials costs, direct labor costs, and manufacturing overhead incurred is the A. cost of goods manufactured. B. total manufacturing overhead. C. total manufacturing costs. D. total cost of work in process.

Companies compute cost of goods manufactured by subtracting ending work in process inventory from A. cost of goods available for sale. B. total manufacturing overhead. C. total manufacturing costs. D. total cost of work in process.

Model Magic Manufacturing reported the following year-end balances: Beginning work in process inventory, $35,000; beginning raw materials inventory, $18,000; ending work in process inventory, $38,000; ending raw materials inventory, $15,000; raw materials purchased, $510,000; direct labor, $180,000; and manufacturing overhead, $75,000. What is the amount of total work in process for Model Magic for the current year?

Which one of the following is true concerning manufacturing and merchandising companies' inventories? A. Both types of companies subtract total inventories from sales revenue on the income statement. B. Goods available for sale consist of Merchandise Inventory for merchandisers and Work in Process for manufacturers. C. The balance sheet for both types of companies reports one category for inventories. D. Manufacturing companies report inventories in the order of liquidity.

Which one of the following is true concerning manufacturing and merchandising companies' inventories on the balance sheet? A. Raw materials is to a manufacturer what merchandise inventory is to a merchandiser. B. A merchandiser reports its inventories as a current asset, and a manufacturer reports inventories as an expense. C. Finished goods is to a manufacturer what merchandise inventory is to a merchandiser. D. Manufacturer's include raw materials, work in process, finished goods, and cost of goods sold on the balance sheet, while merchandisers include only merchandise inventory and cost of goods sold on their balance sheet.

T or F: Under the just-in-time inventory method, goods are manufactured or purchased just-in-time for use.

Which one of the following is a trend in industry? A. The U.S. economy has shifted toward an emphasis on providing services. B. The majority of workers in the U.S. are in manufacturing which is growing substantially. C. Companies now have larger amounts of inventories than in the past. D. Large batch processing in manufacturing is becoming more common.

Which one of the following is a trend in managerial accounting? A. Large machines have been replaced with smaller, more flexible ones. B. Companies are holding more and more inventory items on hand to reduce costs. C. There has been less emphasis on quality due to growth in the size of a company's number of employees. D. Overhead costs are becoming smaller so not as much emphasis on them is needed.

All activities associated with providing a product or service is referred to as A. the value chain. B. total quality management systems. C. just-in-time inventory methods. D. activity-based costing.