ACG 2071 MOD 2 Chapter 1
Which of the following accounts will be found on the income statement?
Cost of Goods Sold
Managerial accounting information is for external users as well as company managers.
FALSE
The cost of materials entering directly into the manufacturing process is classified as factory overhead cost.
FALSE
Which of the following is an example of a factory overhead cost?
Factory heating and lighting cost
Which of the following is the primary guideline for preparing managerial accounting reports?
usefulness to management
Goods that are partially completed by a manufacturer are
work in process inventory
Which of the following would most likely be considered an indirect material by a manufacturer?
glue
Which of the following is the primary criterion for the preparation of managerial accounting reports?
manager needs
Which of the following is most associated with managerial accounting?
may rely on estimates and forecasts
Management Process Three functions of the management process are strategic planning, evaluation, and control. Identify the following descriptions to the proper function: a. Developing long-term objectives b. The process by which management takes actions to encourage specific behaviors or outcomes c. Process by which managers monitor operations by comparing actual and expected results
a. strategic planning b. control c. evaluation
In order to be useful to managers, managerial accounting reports should possess which of the following characteristics?
d. all of these choices a. provide objective measures of past operations and subjective estimates about future decisions b. be prepared to report information for any unit of the business to support decision making c. be provided at any time management needs information d. all of these choices
Which of the following costs are conversion costs?
direct labor cost and factory overhead cost
The cost of a manufactured product generally consists of which of the following costs?
direct labor cost, direct materials cost, and factory overhead cost
Which of the following is a period cost?
sales salaries expense NOT: direct labor direct materials factory overhead
Which of the following is most associated with financial accounting reports?
prepared in accordance with GAAP
Managerial accounting reports must be prepared according to generally accepted accounting principles.
FALSE
Conversion cost is the combination of direct labor cost and factory overhead cost.
TRUE
Factory overhead cost is sometimes referred to as factory burden.
TRUE
Managerial accounting information includes both historical and estimated data.
TRUE
The cost of a manufactured product generally consists of direct materials cost, direct labor cost, and factory overhead cost
TRUE
The cost of wages paid to employees directly involved in converting materials to finished product is classified as direct labor cost.
TRUE
Managerial accounting uses only past data in reports to aid management in the decision-making process.
FALSE
Direct Materials, Direct Labor, and Factory Overhead Identify the following costs as direct materials, direct labor, or factory overhead for a magazine publisher: a. Paper used in the magazines b. Wages of printing machine employees c. Maintenance on printing machines d. Glue used to bind the magazines
a. direct materials b. direct labor c. factory overhead d. factory overhead
Product and Period Costs Identify the following costs as a product cost or a period cost for a magazine publisher: a. Sales salaries b. Paper used in the magazines c. Depreciation expense—corporate headquarters d. Maintenance on printing machines
a. period cost b. product cost c. period cost d. product cost
Prime and Conversion Costs Identify the following costs as a prime cost (P), conversion cost (C), or both (B) for a magazine publisher: a. Paper used in the magazines b. Wages of printing machine employees c. Maintenance on printing machines d. Glue used to bind the magazines
a. prime cost b. both: prime and conversion cost c. conversion cost d. conversion cost
