Accounting: Chapter 15
Managerial accounting
Accounting designed to meet the needs of decision makers inside the business is a. managerial accounting b. general accounting c. financial accounting d. external accounting
Machine operators
All of the following are examples of indirect labor except a. plant managers b. janitorial personnel c. machine operators d. maintenance personnel
Factory Overhead
All of the following would be reported on the balance sheet as current assets except a. materials inventory b. work in process inventory c. factory overhead d. finished goods inventory
Factory Burden
Another term for factory overhead is a. factory burden b. period cost c. surplus d. supervisory cost
Factory overhead cost
Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as a. miscellaneous expense b. factory overhead cost c. period cost d. product costs
Beginning Materials + Costs of Materials Purchased - Ending Materials = Direct Material Used
Direct materials cost equation
decision making
Inherent in each of the preceding management processes is _____________ ____________.
$175,000
Jensen Company reports the following: Direct materials used$345,000 Direct labor incurred250,000 Factory overhead incurred400,000 Operating expenses175,000 Jensen Company's period costs are a. $250,000 b. $345,000 c. $400,000 d. $175,000
Direct materials and direct labor
Prime costs are a. direct labor and factory overhead b. direct materials and factory overhead c. period costs and factory overhead d. direct materials and direct labor
Period costs
Selling and administrative expenses incurred in marketing the product, delivering the product, or managing the company and not directly related to manufacturing the product.
management
The primary goal of managerial accounting is to provide information to a. management b. external auditors c. creditors d. investors
Product costs
The three components of manufacturing cost: direct materials, direct labor, and factory overhead costs.
1. cost of good sold 2. cost of goods manufactured
What information can you expect to see on an income statement?
1. Materials inventory 2. work in process inventory 3. Finished goods inventory
What items are reported on the balance sheet in a manufacturing company?
planning and controlling
Which of the following are basic phases of the management process? a. planning and controlling b. organizing and directing c. supervising and directing d. decision making and supervising
C
Which of the following costs are conversion costs? a. direct materials cost and direct labor cost b. factory overhead cost c. direct labor cost and factory overhead cost d. direct materials cost and factory overhead cost
cost of interior upholstery
Which of the following is an example of direct materials cost for an automobile manufacturer? a. cost of wages of assembly worker b. cost of oil lubricants for factory machinery c. cost of interior upholstery d. salary of production supervisor
Plant janitor's wages
Which of the following is not a prime cost? a. machine operator wages b. assembly line wages c. plant janitor's wages d. direct labor wages
Commissions for sales personnel
Which of the following manufacturing costs is an indirect cost of producing a product? a. oil lubricants used for factory machinery b. hourly wages of an assembly worker c. memory chips for a microcomputer manufacturer d. commissions for sales personnel
C.
Which of the following must be true in order for materials to be classified as direct materials? a. They must be classified as both prime costs and conversion costs. b. They must be an integral part of the finished product, but can be an insignificant portion of the total product cost. c. They must be an integral part of the finished product and be a significant portion of the total product cost. d. They must be introduced into the process in both work in process inventories and finished goods inventories.
Planning
Which of the following terms is used to describe the process of developing the organization's objectives and translating those into courses of action? a. decision making b. planning c. supervising d. improving
Controlling
Which of the following terms is used to describe the process of monitoring operating results and comparing actual results with the expected results? a. controlling b. directing c. improving d. planning
Direct labor
______ ________ is both a prime cost and a conversion cost.
Continuous Process Improvement
____________ ____________ ____________ is the philosophy of continually improving employees, business processes, and products.
current liabilities
amounts due to be paid to creditors within twelve months.
long-term assets
assets and property that may not easily be converted into cash.
indirect labor
labor that is not directly related to the production of a product.
Period cost
Insurance expense incurred on a factory building would be treated as a a. direct cost b. product cost c. selling cost d. period cost
direct labor cost, direct materials cost, and factory overhead cost
The cost of a manufactured product generally consists of which of the following costs? a. direct labor cost and factory overhead cost only b. direct materials cost and direct labor cost only c. direct labor cost, direct materials cost, and factory overhead cost d. direct materials cost and factory overhead cost only
directing
The process by which managers run day-to-day operations is called __________.
1. Planning 2. Decision making 3. Improving 4. Controlling 5. Directing
What are the five basic phases of the management process?
1. Heating and lighting the factory 2. Repairing and maintaining factory equipment 3. Property taxes on factory buildings and land 4. Insurance on factory buildings 5. Depreciation of factory plant and equipment
What cost are included in factory overhead?
Cost of wages of assembly worker
Which of the following is an example of direct labor cost for a cell phone manufacturer? a. cost of wages of assembly worker b. cost of oil lubricants for factory machinery c. cost of phone components d. salary of plant supervisor
long-term liabilities
liabilities that are due beyond a year or the normal operation period of the company.
managerial accounting
managers use accounting information in decision-making and to assist in the management and performance of their control functions.
Indirect cost
A plant manager's salary is a(n) a. direct cost b. indirect cost c. direct cost and an indirect cost d. period cost
planning
Management uses _______ in developing the company's objectives (goals) and translating these objectives into courses of action.
Controlling
Monitoring operating results and comparing actual results with the expected results is ______.
Cost of Goods Manufactured
On the income statement of a manufacturing company, which of the following replaces purchases in the "Cost of goods sold" section of a retail company? a. cost of merchandise available b. work in process c. finished goods d. cost of goods manufactured
financial accounting
The branch of accounting that is concerned with recording transactions using generally accepted accounting principles (GAAP) for a business or other economic unit and with a periodic preparation of various statements from such records.
Conversion costs
The combination of direct labor and factory overhead costs; in lean accounting, the osts are the direct labor and overhead expenses incurred when raw materials are transformed into finished products.
Prime costs
The combination of direct materials and direct labor costs.
Current assets
cash and other assets that are expected to be converted to cash within a year.
Direct costs
Costs that are identified with and traced to a cost object.
Indirect costs
Costs that are not identified with or traced to a cost object.