Chapter 18
Costs that are indirect materials cost and indirect labor cost incurred in the manufacturing process are classified as:
Factory overhead costs
Controlling deals with choosing goals and deciding how to achieve them
False
Conversion costs are the combination of direct labor, direct material, and factory overhead costs
False
Planning is the process of monitoring operating results and comparing actual results with the expected results
False
Prime costs are the combination of direct labor costs and factory overhead costs
False
Materials must have which two qualities in order to be classified as direct materials?
They must be an integral part of the finished product and a significant portion of the total product cost.
A cost object indicates how costs are related or identified
True
A staff department has no direct authority over a line department.
True
If the cost of materials is not a significant portion of the total product cost, the materials may be classified as part of factory overhead costs
True
In most business organizations, the chief management accountant is called the controller.
True
Only the value of the inventory that is sold will appear on the income statement.
True
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 are basic phases of the management process?
planning and controlling
Goods that are partially completed by a manufacturer are
work in progress
The controller's staff consists of management accountants responsible for systems and procedures, general accounting, budgets, taxes, and cost accounting
True
report analyzing the dollar savings of purchasing new equipment to speed up the production process is a managerial accounting report.
True
finished goods inventory is reported on the
balance sheet as a current asset
Cost of goods manufactured is equal to
total manufacturing costs plus beginning work in process inventory less ending work in process inventory
The following are all product costs except 1) factory overhead 2) direct labor 3) sales and administrative expenses 4) direct materials
3
T/F= Factory overhead cost is sometimes referred to as factory burden.
False
T/F=. Managerial accounting reports must be prepared according to generally accepted accounting principles.
False