Ch 14: Managerial Accounting

Topeka Manufacturing reported sales of $750,000 during the current year. The company used $300,000 of raw materials to produce the units that were sold. Its raw materials inventory totaled $10,000 at the beginning of the year and $14,000 at the end of the year. What is the company's days' sales in raw materials inventory at the end of the current year?

17.03 days Days' sales in raw materials inventory = ending raw materials inventory of $14,000 ÷ raw materials used of $300,000 × 365 = 17.03 days.

Topeka Manufacturing reported sales of $750,000 during the current year. The company used $300,000 of raw materials to produce the units that were sold. Its raw materials inventory totaled $10,000 at the beginning of the year and $14,000 at the end of the year. What is the company's raw materials inventory turnover?

25.0 Raw materials inventory turnover = raw materials used of $300,000 ÷ average raw materials inventory of $12,000 (or ($10,000 + $14,000) ÷ 2) = 25.0.

_____ costs are cost-effectively traced to a cost object.

Direct Item #1: Direct costs cost-effectively traced to a cost object. Indirect costs cannot be easily and cost-effectively traced to a single cost object.

Nature of Managerial Accounting

Item #1:Managerial accounting information is provided to internal managers and employees who make and implement decisions about a company's business activities. This includes helping them plan and control the company's activities. Item #2:Financial accounting follows concepts and rules, called GAAP, which provides consistency and comparability of financial statements across companies.

Common examples of _____ costs include selling expenses and general office personnel, advertising expenses, and depreciation of office equipment.

Period

The purposes of managerial accounting are to provide useful information to aid in: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

determining costs of products and services comparing actual to planned results

Completed products ready for sale are referred to as:

finished goods inventory ( Completed products which are ready to be sold are known as finished goods inventory. )

From the list below, select the items that are classified as a materials activity. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

raw materials beginning inventory raw materials purchases.

Structured and follows GAAP.

Financial Accounting System

Purpose is to assist managers in planning and control decisions.

Managerial Accounting System

What are prime costs?

Direct Material + Direct Labor

Service companies do not classify costs as product versus period costs because:

their services are not inventoried A service company does not classify product versus period costs because their services are not inventoried so this type of classification is not relevant.