Managerial Accounting (Chapter 14)

Financial accounting provides information for (internal/external) users, while managerial accounting provides information for (internal/external) decision makers.

External; internal

Conversion costs consist of:

Factory overhead and direct labor

Managerial accounting primarily provides information to:

Internal users

Activities such as purchasing raw materials are considered ___________ activity

Materials

What types of information does managerial accounting provide? (Check all that apply.)

Non-financial Information for managers Financial

A company began the year with $500 in raw materials and purchased $10,250 more during the year. If the company has $725 in raw materials at the end of the year, then they would report direct materials used of ______________ on the schedule of cost of goods manufactured.

$10,025 $500 + $10,250 - $725 = $10,025

List the items below in the correct order in which they would appear in the calculation of cost of goods sold for a manufacturing company

1. Beginning finished goods Inventory 2. Plus 3. Cot of goods manufactured 4. Minus 5. Ending finished goods Inventory

List the following activities in the order in which they occur, with the first activity on top: Materials activity Production activity Sales activity

1. Materials activity 2. Production activity 3. Sales activity

A manufacturing company reports the following items: Finished goods inventory, beginning balance: $1,000 Finish goods inventory, ending balance: $1,200 Cost of goods manufactured, $5,000 The cost of goods sold is

Cost of Goods Sold = Opening balance + Cost of goods manufactured - Closing Balance Cost of Goods Sold = 1000 + 5000 - 1200 Cost of Goods Sold = $4800

Consider a company that manufactures automobiles. Which of the following costs would be considered a direct cost? A. Wages of factory maintenance worker B. Salary of the accounting manager C. Salary of production supervisor D. Wages of assembly line workers

D. Wages of assembly line workers

Consider a service company that provides carpet cleaning. Classify the cost of the hourly workers who clean carpets for customers.

Direct

Costs which are crucial parts of the finished product are called

Direct costs

Prime costs consist of:

Direct materials and direct labor

Managerial accounting has the following characteristics? (Check all that apply.)

Emphasis on projects, processes, and divisions Focus on its internal users Includes mostly monetary and some non-monetary information

The characteristics of the fraud triangle include: (Check all that apply)

Rationalization Pressure Opportunity

The cost of materials a company purchases to use in making products are

Raw materials

The main purpose of managerial accounting is

To provide financial and non-financial information to an organization's managers

True or false: Managerial accounting provides information to internal managerial and executive employees who are in charge of a company's business activities.

True

Which of the following characteristics describe managerial accounting? (Check all that apply.)

Used to make planning and control decisions Many future projections

Inventory which is partially complete is known as

Work in progress