Question 1

Manufacturing costs do not include:

Accepted Answer

A)  Direct labor applicable to production within the period. 
B)  Selling expenses related to goods manufactured during the period. 
C)  Direct materials used during the period. 
D)  Manufacturing overhead charged to work in process during the period. 
A)  Direct labor applicable to production within the period. 
B)  Selling expenses related to goods manufactured during the period. 
C)  Direct materials used during the period. 
D)  Manufacturing overhead charged to work in process during the period.

Question 2

The Work in Process Inventory account had a beginning balance of $4,200 on February 1. During February, the cost of direct materials used was $29,000 and direct labor cost applied to production was $3,000. Overhead is applied at the rate of $20 per direct labor hour. During February, 180 direct labor hours were used in the production process. If the cost of finished goods manufactured was $34,100, compute the balance in the Work in Process Inventory account at the end of February.

Accepted Answer

A)  $9,900. 
B)  $1,500. 
C)  $2,100. 
D)  $5,700. 
A)  $9,900. 
B)  $1,500. 
C)  $2,100. 
D)  $5,700.

Question 3

The balance in the Materials Inventory account at the beginning of 2011: was:

Accepted Answer

A)  $65,000. 
B)  $85,000. 
C)  $45,000. 
D)  Some other amount. $_____________ 
A)  $65,000. 
B)  $85,000. 
C)  $45,000. 
D)  Some other amount. $_____________

Question 4

Product costs become part of inventory and are placed on the balance sheet until the products are sold.

Accepted Answer

A) True 
 B)False

Question 5

Costs that are traceable to a particular unit and are inventoriable are called:

Accepted Answer

A)  Period costs. 
B)  Product costs. 
C)  Overhead costs. 
D)  Job costs. 
A)  Period costs. 
B)  Product costs. 
C)  Overhead costs. 
D)  Job costs.

Question 6

The total amount of inventory that should appear in the company's balance sheet at April 30 is:

Accepted Answer

A)  $39,000. 
B)  $82,000. 
C)  $73,000. 
D)  $78,000 
A)  $39,000. 
B)  $82,000. 
C)  $73,000. 
D)  $78,000

Question 7

The cost of the employee who installs the leather on the seats of a new automobile would be considered:

Accepted Answer

A)  Manufacturing overhead. 
B)  Indirect labor. 
C)  Direct material. 
D)  Direct labor. 
A)  Manufacturing overhead. 
B)  Indirect labor. 
C)  Direct material. 
D)  Direct labor.

Question 8

Managerial accounting refers to the preparation and use of accounting information designed to meet the needs of decision makers inside and outside the business organization.

Accepted Answer

A) True 
 B)False

Question 9

In a manufacturing company, the cost of goods sold is equal to:

Accepted Answer

A)  The beginning inventory of finished goods, plus net purchases, less the ending inventory of finished goods. 
B)  The sum of the manufacturing costs charged (debited) to the Work in Process Inventory account during the period. 
C)  The costs of direct materials, direct labor, and manufacturing overhead incurred in manufacturing the goods sold during the period. 
D)  The beginning inventory of Work in Process, plus total manufacturing costs for the period, less the ending inventory of Work in Process. 
A)  The beginning inventory of finished goods, plus net purchases, less the ending inventory of finished goods. 
B)  The sum of the manufacturing costs charged (debited) to the Work in Process Inventory account during the period. 
C)  The costs of direct materials, direct labor, and manufacturing overhead incurred in manufacturing the goods sold during the period. 
D)  The beginning inventory of Work in Process, plus total manufacturing costs for the period, less the ending inventory of Work in Process.

Question 10

When direct materials are used:

Accepted Answer

A)  Manufacturing Overhead is debited. 
B)  Raw Materials Inventory is debited. 
C)  Cost of Goods Sold is debited. 
D)  Work in Process Inventory is debited. 
A)  Manufacturing Overhead is debited. 
B)  Raw Materials Inventory is debited. 
C)  Cost of Goods Sold is debited. 
D)  Work in Process Inventory is debited.

Question 11

Flow of manufacturing costs
The "flow" of manufacturing costs through the ledger of MF Enterprise. Co. during the month of August is summarized in the following T accounts. Certain amounts have been omitted and are represented by question marks.
 
From the data supplied above, determine each of the following amounts. Some of the required amounts already appear in the T accounts; others require a short computation.
(a) The amount of direct materials purchased during the month: $_________ (b) The amount of direct labor cost assigned to production: $____________ (c) The amount of accrued wages payable to direct labor workers at August 31: $____________ (d) The cost of finished goods manufactured during the month: $____________ (e) The cost of goods sold during the month: $____________

Accepted Answer

(a) 44,000
(b) 29,00

Question 12

The purpose of an overhead application rate is to:

Accepted Answer

A)  Assign a portion of indirect manufacturing costs to each product manufactured. 
B)  Determine the type and amount of costs to be debited to the Manufacturing Overhead account. 
C)  Charge the Work in Process Inventory account with the appropriate amount of direct manufacturing costs. 
D)  Allocate manufacturing overhead to expense in proportion to the number of units manufactured during the period. 
A)  Assign a portion of indirect manufacturing costs to each product manufactured. 
B)  Determine the type and amount of costs to be debited to the Manufacturing Overhead account. 
C)  Charge the Work in Process Inventory account with the appropriate amount of direct manufacturing costs. 
D)  Allocate manufacturing overhead to expense in proportion to the number of units manufactured during the period.

Question 13

Total manufacturing costs charged (debited) to Work in Process during September amount to:

Accepted Answer

A)  $180,000. 
B)  $170,000. 
C)  $172,000. 
D)  Some other amount. 
A)  $180,000. 
B)  $170,000. 
C)  $172,000. 
D)  Some other amount.

Question 14

In comparison with a financial statement prepared in conformity with generally accepted accounting principles, a managerial accounting report is more likely to:

Accepted Answer

A)  Be used by decision makers outside of the business organization. 
B)  Focus upon the operating results of the most recently completed accounting period. 
C)  View the entire organization as the reporting entity. 
D)  Be tailored to the specific needs of an individual decision maker. 
A)  Be used by decision makers outside of the business organization. 
B)  Focus upon the operating results of the most recently completed accounting period. 
C)  View the entire organization as the reporting entity. 
D)  Be tailored to the specific needs of an individual decision maker.

Question 15

The James Company has incurred the following costs of production:
Direct Materials $350,000
Direct Labor $475,000
Manufacturing Overhead $722,000
Selling and Administrative Costs $256,000
The James Company prime costs are $606,000.
Prime costs = Direct Materials $350,000 + Direct Labor $475,000 = $825,000

Accepted Answer

A) True 
 B)False

Question 16

Management accounting reports may provide sufficient means of monitoring, evaluating and rewarding performance.

Accepted Answer

A) True 
 B)False

Question 17

The wages paid to employees working directly on a company's products would be shown as a:

Accepted Answer

A)  Credit to Direct Labor. 
B)  Debit to Direct Labor. 
C)  Credit to Work in Process. 
D)  Debit to Manufacturing Overhead. 
A)  Credit to Direct Labor. 
B)  Debit to Direct Labor. 
C)  Credit to Work in Process. 
D)  Debit to Manufacturing Overhead.

Question 18

Costs related to the disposal of hazardous materials are classified as manufacturing overhead costs.

Accepted Answer

A) True 
 B)False

Question 19

The following information pertains to the Galaxy Company:
Work in Process, balance as of January 1 $54,500
Work in Process, balance as of December 31 $56,275
During the year, the company used $575,500 in raw materials, incurred $420,500 in direct labor costs, and $500,000 in manufacturing overhead costs were applied to work in process.
Determine the Costs of Goods Manufactured for the Galaxy Company.

Accepted Answer

The answer of The following information pertains to the Galaxy...

Question 20

The accounting records of Newport Mfg. Co. include the following information for the most recent year ended Dec. 31: Indicate which of the following are correct. (More than one answer may be correct.)

Accepted Answer

A)  Amount debited to the Work in Process Inventory account during year, $500,000. 
B)  Cost of finished goods manufactured, $490,000. 
C)  Cost of goods sold, $470,000. 
D)  Total manufacturing costs, $650,000. 
A)  Amount debited to the Work in Process Inventory account during year, $500,000. 
B)  Cost of finished goods manufactured, $490,000. 
C)  Cost of goods sold, $470,000. 
D)  Total manufacturing costs, $650,000.

Exam 16: Management Accounting: a Business Partner

Manufacturing costs do not include:

The balance in the Materials Inventory account at the beginning of 2011: was:

Product costs become part of inventory and are placed on the balance sheet until the products are sold.

Costs that are traceable to a particular unit and are inventoriable are called:

The total amount of inventory that should appear in the company's balance sheet at April 30 is:

The cost of the employee who installs the leather on the seats of a new automobile would be considered:

Managerial accounting refers to the preparation and use of accounting information designed to meet the needs of decision makers inside and outside the business organization.

In a manufacturing company, the cost of goods sold is equal to:

When direct materials are used:

The purpose of an overhead application rate is to:

Total manufacturing costs charged (debited) to Work in Process during September amount to:

In comparison with a financial statement prepared in conformity with generally accepted accounting principles, a managerial accounting report is more likely to:

Management accounting reports may provide sufficient means of monitoring, evaluating and rewarding performance.

The wages paid to employees working directly on a company's products would be shown as a:

Costs related to the disposal of hazardous materials are classified as manufacturing overhead costs.

The accounting records of Newport Mfg. Co. include the following information for the most recent year ended Dec. 31: Indicate which of the following are correct. (More than one answer may be correct.)

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values Answer Key

Filters