Accounting 2 - Chapter 14 Quiz

Which of the following is not an element of manufacturing overhead?

Sales manager's salary.

Which one of the following is a trend in industry?

The U.S. economy has shifted toward an emphasis on providing services.

All activities associated with providing a product or service is referred to as

The value chain

Companies compute cost of goods manufactured by subtracting ending work in process inventory from

Total cost of work in process

The sum of the direct materials costs, direct labor costs, and manufacturing overhead incurred is the

Total manufacturing cost

Companies usually list manufacturing inventories in the order of their liquidity—the order in which they are expected to be realized in cash

True

Managerial accounting applies to all types of businesses, including service, merchandising, and manufacturing, as well as to all forms of business organizations.

True

Manufactures compute cost of goods sold for the income statement by adding beginning finished goods inventory to cost of goods manufactured and subtract ending finished goods inventory

True

Manufacturing overhead consists of costs that are indirectly associated with the manufacture of the finished product.

True

Product costs are costs that are a necessary and integral part of producing the finished product.

True

The costs assigned to beginning work in process inventory are based on the manufacturing costs incurred in the prior period.

True

Under the just-in-time inventory method, goods are manufactured or purchased just-in-time for use.

True

Which of the following costs are classified as a period cost?

Wages paid to a cost accountant department supervisor.

The cost applicable to units that have been started into production but not completed is shown as

Work in process inventory

Cost of goods available for sale is reported on the income statement of

a merchandising company and a manufacturing company

Examples of recent trends in the economic environment of U.S. businesses are

increasing deregulation, increasing global competition, and a shift toward providing services rather than goods.

Each of the following is a period cost except

indirect labor.

Many companies have significantly lowered inventory levels and costs using

just-in-time inventory methods.

Product costs include each of the following except

selling and administrative expenses

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?

$2,050

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

$303,000

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?

$45,000

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

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

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?

$76,800

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?

$803,000

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)

Which of the following managerial accounting techniques attempts to allocate manufacturing overhead in a more meaningful fashion?

Activity-based costing.

Which one of the following Is not a manufacturing cost

Advertising Cost

After passage of the Sarbanes-Oxley Act of 2002

CEOs and CFOs must certify that financial statements give a fair presentation of the company's operating results

For a manufacturing firm, cost of goods available for sale is computed by adding the beginning finished goods inventory to

Cost of Goods manufactured

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

The principal difference between a merchandising and a manufacturing income statement is the

Cost of goods sold section

Which of the following costs would a computer manufacturer include in manufacturing overhead?

Depreciation on testing equipment

on average, studies have shown that the smallest component of total manufacturing cost is

Direct labor

Which group of costs consists of only product costs?

Direct labor, indirect labor, factory utilities

Which of the following answer choices lists the three manufacturing costs?

Direct materials, direct labor, and manufacturing overhead

Indirect material costs are easily traced to products because of their physical association with the finished product.

False

Planning is the process of keeping the company's activities on track

False

Which one of the following is true concerning manufacturing and merchandising companies' inventories on the balance sheet?

Finished goods is to a manufacturer what merchandise inventory is to a merchandiser.

What is not an distinguishing feature of managerial accounting?

Independent Audits

Which of the following statements is not true about managerial accounting?

It is highly aggregated

Which of the following statements is true about managerial accounting?

It provides more detailed information than financial accounting does

Which of the following is considered part of the controlling process?

Keeping the company's activities on track

Which one of the following is a trend in managerial accounting?

Large machines have been replaced with smaller, more flexible ones.

Which one of the following is true concerning manufacturing and merchandising companies' inventories?

Manufacturing companies report inventories in the order of liquidity.

One key difference appears when comparing the income statements of a manufacturing company to a merchandising company. What is that difference?

Manufacturing companies use cost of goods manufactured and merchandising companies use cost of goods purchased.

The management of an organization performs several broad functions. They are?

Planning, Directing, and Controlling

Which of the following are considered to be management's three broad functions?

Planning, Directing, and Controlling

Karmon Audio, Inc. manufactures speakers. During March, Karmon's transactions and accounts included the following: 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?

145,700

The formula to determine the cost of goods manufactured is

beginning work in process inventory + total manufacturing costs - ending work in process inventory.

The process of keeping the company's activities on track is

controlling

Manufacturing overhead includes all of the following except

direct materials

Managerial Accounting

places emphasis on special-purpose information

The management function that requires management to look ahead and establish objectives is

planning

Direct materials are

product cost

indirect labor is a

product cost

A cost of goods manufactured schedule shows beginning and ending inventories for

raw materials and work in process only.