Exam 1: Management Accounting and Corporate Governance

Assuming that the inventory on hand at the end of the period is sold during the following period, misclassifying a period cost as a product cost during a period will usually correct itself in the following period.

Select the incorrect statement regarding upstream and downstream costs.

The primary difference between manufacturing companies and service companies is that the products provided by service companies are consumed immediately.

A manufacturing business paid $3,000 to purchase inventory. As a result, assets would increase by $3,000.

Steuben Company produces dog houses. During the current year, Steuben Company incurred the following costs: Wages paid to factory machine operators in producing the dog houses should be categorized as: Rent on manufacturing facility \ 250,000 Office manager's salary 150,000 Wages of factory machine operators 110,000 Depreciation on manufacturing equipment 50,000 Insurance and taxes on selling and administrative offices 30,000 Direct materials purchased and used 170,000

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

Product costs include materials, labor, and selling and administrative costs.

Unlike manufacturers, service companies do not have an inventory of products.

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 the amount of finished goods inventory on the balance sheet at year-end?

Which of the following is not a provision of the Sarbanes-Oxley Act of 2002?

The sequence of activities through which an organization provides products to its customers is called a supply chain.

Managerial accounting systems consider economic and non-financial data as well as financial statement data.

Which of the following is not a reason management might be tempted to classify costs as product costs rather than expensing them during periods in which production exceeds sales?

A company that uses a just in time inventory system:

Which of the following costs should not be recorded as an expense?

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.

Which of the following is not an element that is typically present when fraud occurs?

What are indirect costs, and how are the indirect costs incurred to make products accounted for?

Managerial accounting focuses primarily on the performance of the company as a whole.

What costs are treated as product costs for a manufacturing company?