Accounting Chapter 16

The payment of wages to factory employees who work directly on the goods being manufactured is recorded by an entry crediting:

Cash

Which of the following is not a period cost?

Depreciation on factory equipment.

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

Focus upon the entire organization as the accounting entity

In a schedule of cost of finished goods manufactured, the figure for total manufacturing costs:

May be less than the cost of finished goods manufactured

In a schedule of cost of finished goods manufactured, the figure for total manufacturing costs

May be less than the cost of finished goods manufactured.

The placing of direct materials into the production process is recorded by an entry crediting:

Raw Materials Inventory

Since manufacturing costs (direct materials, direct labor, and overhead) are incurred in the process of manufacturing units of product, these costs are credited to

The Direct Materials Inventory, Direct Labor, and Manufacturing Overhead accounts respectively

The accountant for Eric's Plumbing Equipment Company recently made a journal entry consisting of a debit to Work in Process and a credit to Raw Materials Inventory. This entry recorded:

The use of raw materials in the production process

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

The value chain.

The placing of direct materials into the production process is recorded by an entry debiting

Work in Process Inventory

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

product costs

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

The beginning inventory of Work in Process, plus total manufacturing costs for the period, less the ending inventory of Work in Process.

The payment of raw materials previously purchased on account is recorded by an entry debiting:

accounts payable

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

direct labor

Which of the following is not a product cost?

Advertising

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

Be tailored to the specific needs of an individual decision maker.

If the salaries of the sales staff of a manufacturing company are improperly recorded as a product cost, what will be the likely effect on net income of the period in which the error occurs?

Net income will be overstated.

Manufacturing companies normally have three types of inventory:

Raw materials, work in process, and finished goods.

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

The cost of wood used in furniture construction.

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

The costs of direct materials, direct labor, and manufacturing overhead incurred in manufacturing the goods sold during the period.

When direct materials are used:

Work in Process Inventory is debited