Question 1

Finished goods is comprised of direct materials purchased,direct labor,and manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 2

When goods are completed and transferred from the assembly line:

Accepted Answer

A) Cost of Goods Sold is debited and Finished Goods Inventory is credited. 
B) Work in Process Inventory is debited and Finished Goods Inventory is credited. 
C) Finished Goods Inventory is debited and Cost of Goods Sold is credited. 
D) Work in Process Inventory is credited and Finished Goods Inventory is debited. 
A) Cost of Goods Sold is debited and Finished Goods Inventory is credited. 
B) Work in Process Inventory is debited and Finished Goods Inventory is credited. 
C) Finished Goods Inventory is debited and Cost of Goods Sold is credited. 
D) Work in Process Inventory is credited and Finished Goods Inventory is debited.

Question 3

The James Company has incurred the following costs of production:
Direct Materials $350,000;
Direct Labor $475,000;
Manufacturing Overhead $722,000;and
Selling and Administrative Costs $256,000.
The James Company conversion costs are $1,197,000.

Accepted Answer

A) True 
 B)False

Question 4

As units are completed,their cost is transferred from the Work in Process Inventory account to the Finished Goods Inventory account.

Accepted Answer

A) True 
 B)False

Question 5

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 6

In the year-end financial statements,the Manufacturing Overhead account should have:

Accepted Answer

A) A debit balance,representing overhead on hand and available for use. 
B) A credit balance,representing accumulated depreciation and amounts owed to suppliers of overhead items. 
C) Either a debit or a credit balance,depending upon whether the overhead application rate used throughout the year was higher or lower than 100%. 
D) A zero balance,since all overhead costs incurred during the period should have been assigned to the production of the period. 
A) A debit balance,representing overhead on hand and available for use. 
B) A credit balance,representing accumulated depreciation and amounts owed to suppliers of overhead items. 
C) Either a debit or a credit balance,depending upon whether the overhead application rate used throughout the year was higher or lower than 100%. 
D) A zero balance,since all overhead costs incurred during the period should have been assigned to the production of the period.

Question 7

Prime costs include direct materials and direct labor used in the production of goods and services.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following costs would not be considered part of the manufacturing overhead of a chemical plant?

Accepted Answer

A) The costs of disposing of toxic waste materials 
B) Salaries of factory medical personnel 
C) Salaries of employees who operate distilling equipment used in the production process 
D) The cost of complying with federal safety regulations concerning plant operations 
A) The costs of disposing of toxic waste materials 
B) Salaries of factory medical personnel 
C) Salaries of employees who operate distilling equipment used in the production process 
D) The cost of complying with federal safety regulations concerning plant operations

Question 9

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 10

All three inventory accounts (raw materials,work in process,and finished goods)are considered current assets.

Accepted Answer

A) True 
 B)False

Question 11

The set of linked activities and resources needed to create and deliver a product or service to the customer is referred to as:

Accepted Answer

A) The budget. 
B) The value chain. 
C) The operating cycle. 
D) The production process. 
A) The budget. 
B) The value chain. 
C) The operating cycle. 
D) The production process.

Question 12

Indicate whether each of the following is a product cost or a period cost:
(a)Electricity for lighting a factory building.
(b)Costs of delivering finished bicycles to dealers.
(c)Cost of a store detective in a retail establishment.
(d)Cost of eggs in a bakery.
(e)Cost of chocolate to a candy manufacturer.
(f)Salary of injection molding machine operator in a plastics factory.
(g)Salary of a sewing machine operator in a clothing factory.
(h)Depreciation of a freezer in an ice cream plant.

Accepted Answer

(a)Product
(b)Period

Question 13

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 14

Costs that are traceable to a particular unit and 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 15

Which of the following should not be classified as a manufacturing cost?

Accepted Answer

A) Indirect factory labor costs,such as salaries of plant security guards. 
B) Direct materials used in the production process. 
C) Utility bills related to factory operations. 
D) Commissions paid to salespeople. 
A) Indirect factory labor costs,such as salaries of plant security guards. 
B) Direct materials used in the production process. 
C) Utility bills related to factory operations. 
D) Commissions paid to salespeople.

Question 16

Schedule of cost of finished goods manufactured
The accounting records of Village Cleaning Co.include the following information about the company's manufacturing costs and inventories in 2018:
   Complete the following Schedule of Cost of Finished Goods Manufactured for the year ended December 31,2018:

Accepted Answer

The answer of Schedule of cost of finished goods manufactured
The...

Question 17

Manufacturing overhead is a term used to describe all manufacturing costs other than direct materials and direct labor.

Accepted Answer

A) True 
 B)False

Question 18

A value chain is a linked set of activities and resources necessary to create and deliver a product or service to a customer.

Accepted Answer

A) True 
 B)False

Question 19

Direct labor and overhead costs that are required to convert raw materials into finished goods are considered to be conversion costs.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following costs would not be considered part of the manufacturing overhead of a furniture manufacturer?

Accepted Answer

A) The cost of compliance with federal factory safety regulations 
B) Depreciation expense on factory equipment 
C) The cost of grease used to lubricate factory equipment 
D) The cost of wood used in furniture construction 
A) The cost of compliance with federal factory safety regulations 
B) Depreciation expense on factory equipment 
C) The cost of grease used to lubricate factory equipment 
D) The cost of wood used in furniture construction

Exam 16: Management Accounting

Finished goods is comprised of direct materials purchased,direct labor,and manufacturing overhead.

When goods are completed and transferred from the assembly line:

The James Company has incurred the following costs of production: Direct Materials $350,000; Direct Labor $475,000; Manufacturing Overhead $722,000;and Selling and Administrative Costs $256,000. The James Company conversion costs are $1,197,000.

As units are completed,their cost is transferred from the Work in Process Inventory account to the Finished Goods Inventory account.

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

In the year-end financial statements,the Manufacturing Overhead account should have:

Prime costs include direct materials and direct labor used in the production of goods and services.

Which of the following costs would not be considered part of the manufacturing overhead of a chemical plant?

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.

All three inventory accounts (raw materials,work in process,and finished goods)are considered current assets.

The set of linked activities and resources needed to create and deliver a product or service to the customer is referred to as:

Manufacturing costs do not include:

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

Which of the following should not be classified as a manufacturing cost?

Manufacturing overhead is a term used to describe all manufacturing costs other than direct materials and direct labor.

A value chain is a linked set of activities and resources necessary to create and deliver a product or service to a customer.

Direct labor and overhead costs that are required to convert raw materials into finished goods are considered to be conversion costs.

Which of the following costs would not be considered part of the manufacturing overhead of a furniture manufacturer?

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

the Time Value of Money: Future Amounts and Present Values

Forms of Business Organization

Filters