Exam 1: Management Accounting and Corporate Governance

Which of the following types of labor costs will never flow through the balance sheet?

Depreciation on manufacturing equipment is an indirect product cost,while depreciation on office equipment is a period cost.

During its first year of operations,Silverman Company paid $14,000 for direct materials and $19,000 for production workers' wages.Lease payments and utilities on the production facilities amounted to $17,000 while general,selling,and administrative expenses totaled $8,000.The company produced 5,000 units and sold 3,000 units at a price of $15.00 a unit. What was Silverman's net income for the first year in operation?

Product costs are immediately recorded in expense accounts when the products are manufactured.

Randall Company manufactures chocolate bars.The following were among Randall's manufacturing costs during the current year: Wages Machine operators \3 00,000 Selline and administrative personnel \7 5,000 Materials used Lubricant for oiling machinery \2 5,000 Cocoa, sugar, and other raw materials \2 25,000 Packaging materials \1 90,000 Randall's direct labor costs amounted to:

The benefits of a just-in-time system would include all of the following except:

If a company misclassifies a general,selling and administrative cost as a product cost in a period when production exceeds sales:

The Giga Company produces tablet computers.The following information is provided: a) Materials used \2 16,000 b) Advertising \4 0,000 c) Insurance, factory \2 0,000 d) Administrative salaries \5 0,000 e) Property taxes, factory \1 2,000 f) Utilities, administrative building \2 2,000 g) Factory labor \8 0,000 h) Sales commissions \5 6,000 i) Factory supervisor's salary \6 0,000 j) Research and development \1 8,000 k) Depreciation, factory \1 2,000 l) Depreciation, office \8 ,000 m) Indirect materials \1 4,000 Required: Classify each of the company's costs as a period cost (general,selling,and administrative cost)or as a direct or indirect product cost.Enter the dollar amount of the cost in the appropriate column.After entering all amounts,calculate the total general,selling,and administrative cost,the total direct product cost,and the total indirect product cost. Itern Period cost Direct product cost Indirect product cost a) b) c) d) e) f g) h) i) g) k) l) m) Total

During its first year of operations,Silverman Company paid $14,000 for direct materials and $19,000 for production workers' wages.Lease payments and utilities on the production facilities amounted to $17,000 while general,selling,and administrative expenses totaled $8,000.The company produced 5,000 units and sold 3,000 units at a price of $15.00 a unit. What is Silverman's cost of goods sold for the year?

Anton believes his company's overhead costs are driven (affected)by the number of machine hours because the production process is heavily automated.During the period,the company produced 3,000 units of Product A requiring a total of 100 machine hours and 2,000 units of Product B requiring a total of 25 machine hours.What allocation rate should be used if the company incurs overhead costs of $10,000?

Distinguishing between product and period costs is sometimes guided by the value-added principle.

Financial accounting information is reported periodically,primarily at the end of each fiscal year.When is managerial accounting information reported to managers of an organization?

A company uses sandpaper to prepare its product for finishing.Most manufacturers would classify the sandpaper as direct material because it is physically consumed in the production process.

During her first year with the company,Ann mistakenly accumulated some of the company's period costs in ending inventory.Which of the following indicates how this error affects the company's financial statements assuming number of units produced exceeded number of units sold during the period?

Jarvis Company provided the following information regarding its first year of operations: Administrative salar1es \ 60,000 Depreciation on factory equipment 16,000 Indirect materials 4,000 Marketing costs 40,000 Salaries for factory supervisors 28,000 Wages for production workers 80,000 Raw materials used 100,000 Research and development 32,000 Rent on factory building 18,000 Sales revenues 432,000 Sales salaries and other selling costs 65,000 Beginning inventory 0 units Number of units produced 20,000 Number of units sold 18,000 Required: Determine the following amounts: (a)Total overhead costs. (b)Total product costs. (c)Product cost per unit. (d)Total cost of ending finished goods inventory. (e)Total cost of goods sold.

Which of the following practices is not considered an effective means of reengineering business systems?

Which of the following most exemplifies the value-added principle?

A systematic problem-solving philosophy that encourages front line workers to achieve zero defects is known as:

With respect to income taxes,managers would prefer to classify costs as assets rather than expenses.

The philosophy of encouraging workers to achieve zero defects and high customer satisfaction is known as total quality management.