M. Accounting Chapter 14 – Flashcards

Which of the following statements is not true about managerial accounting? It is highly aggregated. Reports are generated as needed. It is primarily for internal users such as officers and managers. It does not require an audit by a CPA.

Which of the following statements is true about managerial accounting? It provides more detailed information than financial accounting does. It pertains to a business as a whole. It is primarily for internal users such as stockholders and managers. It must be prepared using generally accepting accounting principles.

Managerial accounting is limited to cost data. places emphasis on special-purpose information. is governed by generally accepted accounting principles. pertains to the entity as a whole and is highly aggregated.

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

Which of the following are considered to be management's three broad functions? Planning, directing, and controlling Planning, calculating, and controlling Controlling, directing, manufacturing Conducting, directing, manufacturing

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

After passage of the Sarbanes-Oxley Act of 2002 reports prepared by managerial accountants must comply with generally accepted accounting principles (GAAP). reports prepared by managerial accountants must be audited by CPAs. CEOs and CFOs must certify that financial statements give a fair presentation of the company's operating results. the audit committee, rather than top management, is responsible for the company's financial statements.

The management function that requires management to look ahead and establish objectives is controlling. directing. evaluating. planning.

he process of keeping the company's activities on track is controlling. evaluating. directing. planning.

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

Which of the following answer choices lists the three manufacturing costs? Raw materials, work in process, and finished goods Work in process, finished goods, and cost of goods sold Indirect materials, indirect labor, and factory-related costs Direct materials, direct labor, and manufacturing overhead

Which of the following costs would a computer manufacturer include in manufacturing overhead? Depreciation on testing equipment. The cost of the memory chips. The cost of the disk drives. The wages earned by computer assemblers.

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

Manufacturing overhead includes all of the following except indirect labor. maintenance. depreciation. direct materials.

On average, studies have shown that the smallest component of total manufacturing cost is direct labor. factory overhead. direct materials. manufacturing overhead

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, and $100 of administrative costs. How much are total product costs? $1,850 $2,050 $2,350 $2,150

Which group of costs consists of only product costs? Direct labor, indirect labor, factory utilities Indirect labor, factory building depreciation, administrative expenses Factory maintenance, sales commissions, salaries paid to sales clerks Direct labor, direct materials, and selling expenses

Direct materials are a Product Cost Manufacturing Overhead Period Cost Yes No No Yes Yes No Yes Yes Yes No No No

Indirect labor is a non-manufacturing cost. product cost. raw material cost. period cost.

Which of the following costs are classified as a period cost? Wages paid to an assembly worker. Wages paid to a production department supervisor. Wages paid to a cost accountant department supervisor. Wages paid to a factory custodian.

Product costs include each of the following except direct labor. direct materials. manufacturing overhead. selling and administrative expenses

Each of the following is a period cost except indirect labor. selling expenses. non-manufacturing costs. administrative 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 $421,000. $303,000. $315,000. $391,000.

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? Cost of goods manufactured Raw materials Cost of goods purchased Work in process

One key difference appears when comparing the income statements of a manufacturing company to a merchandising company. What is that difference? Manufacturing companies use work in process, raw materials, and finished goods inventory balances to calculate cost of goods sold, while merchandising companies use only merchandise inventory balances. Cost of goods manufactured is subtracted from sales to get gross profit on a manufacturing income statement, while cost of goods purchased is subtracted from sales to get gross profit on a merchandising income statement. Cost of goods sold equals the cost of merchandise purchased for a merchandising company, while cost of goods sold equals the cost of raw materials purchased for a manufacturing company. Manufacturing companies use cost of goods manufactured and merchandising companies use cost of goods purchased.

For the year, Redder Company has cost of goods manufactured of $600,000, beginning finished goods inventory of $200,000, and ending finished goods inventory of $250,000. The cost of goods sold is $550,000. $600,000. $450,000. $500,000.

Cost of goods available for sale is reported on the income statement of neither a manufacturing company nor a merchandising company. a manufacturing company but not a merchandising company. a merchandising company but not a manufacturing company. a merchandising company and a manufacturing company.

The principal difference between a merchandising and a manufacturing income statement is the cost of goods sold section. revenue section. extraordinary item section. operating expense section.

Manders Corporation has $20,000 of ending finished goods inventory at December 31. If beginning finished goods inventory was $15,000 and cost of goods sold was $40,000, how much would Manders Corporation report as cost of goods manufactured? $75,000. $55,000. $45,000. $5,000.

Checker Clackers, Inc. manufactures clackers. Checker's transactions and accounts included the following during June: Raw materials inventory, beginning $1,200 Raw materials inventory, ending 1,400 Work in process inventory, beginning 7,100 Work in process inventory, ending 6,800 Raw materials acquired 27,800 Cost of direct materials used in production 27,600 Sales commissions to sell clackers 2,100 Direct labor cost 20,000 Total manufacturing overhead 28,900 How much is cost of goods manufactured for June? $78,900 $76,800 $77,000 $76,500

Raw materials acquired for cash $82,500 Cost of direct materials used in production 81,900 Costs to ship products to customers 1,000 Direct labor cost incurred 41,000 Total manufacturing overhead incurred 25,000 Raw materials inventory, beginning 3,500 Raw materials inventory, ending 3,600 Work in process inventory, beginning 12,000 Work in process inventory, ending 14,200 How much is cost of goods manufactured for March? Entry field with correct answer $146,700 $146,300 $145,700 $147,900

A cost of goods manufactured schedule shows beginning and ending inventories for work in process only. raw materials and work in process only. raw materials only. raw materials, work in process, and finished goods.

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

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

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? $513,000. $803,000. $768,000. $765,000.

Buxmont Manufacturing reported the following year-end balances: Beginning work in process inventory, $40,000; beginning finished goods inventory, $60,000; ending work in process inventory, $20,000; ending finished goods inventory, $30,000; direct materials used, $240,000; direct labor, $250,000; manufacturing overhead, $150,000; selling expenses, $50,000; and administrative expenses, $350,000. How much would Buxmont Manufacturing report as cost of goods manufactured at year-end? $660,000. $670,000. $710,000. $620,000.

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

Which one of the following is true concerning manufacturing and merchandising companies' inventories on the balance sheet? 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. Raw materials is to a manufacturer what merchandise inventory is to a merchandiser. A merchandiser reports its inventories as a current asset, and a manufacturer reports inventories as an expense. Finished goods is to a manufacturer what merchandise inventory is to a merchandiser.

A manufacturer may report three inventories in its balance sheet: (1) raw materials, (2) work in process, and (3) finished goods. Indicate in what sequence these inventories generally appear on a balance sheet. (3), (2), (1) (1), (2), (3) (2), (3), (1) (3), (1), (2)

The cost applicable to units that have been started into production but not completed is shown as finished goods inventory. merchandise inventory. raw materials inventory. work in process inventory.