ACCOUNTING ch1 quiz

Cost of goods manufactured during 2011 is $240, work in process inventory on December 31, 2011, is $50. Work in process inventory during 2011 decreased 60%. Total manufacturing costs incurred during 2011 amount to:

b. $165

A company manufactured 50,000 units of a product at a cost of $250,000. They sold 40,000 units for $10 each. What is the gross margin?

b. $200,000

Who are the individuals charged with the responsibility for directing the day-to-day operations of a business?

b. Managers

Which of the following is most associated with managerial accounting?

b. May rely on estimates and forecasts

The following are all product costs except:

b. Sales and administrative expenses

In most business organizations, the chief management accountant is called the:

b. controller

The cost of wages paid to employees directly involved in the manufacturing process in converting materials into finished product is classified as:

b. direct labor cost

Prime costs are

b. direct materials and direct labor

Managerial accounting

b. is prepared according to management needs.

Rent expense on a factory building would be treated as a(n):

b. product cost

Indirect costs incurred in a manufacturing environment that cannot be traced directly to a product are treated as:

b. product costs and expensed when the goods are sold

All of the following are examples of indirect labor except:

c. machine operators

Cost of Materials Used $40,000 Direct Labor costs $55,000 Factory Overhead $32,000 Work in Process, beg. $28,000 Work in Process, end. $18,000 What is Cost of Goods Manufactured?

d. $137,000

Work in process inventory increased $20,000 during 2011. Cost of goods manufactured was $280,000. Total manufacturing costs incurred in 2011 are:

d. $300,000

A product cost is:

d. expensed in the period the product is sold

Another term often used to refer to factory overhead is:

d. factory burden

If the cost of direct materials is a small portion of total production cost, it may be classified as part of:

d. factory overhead cost

Period costs include:

d. operating costs that are shown on the income statement in the period in which they are incurred

Cost of goods manufactured is equal to:

d. total manufacturing costs plus beginning work in process inventory less ending work in process inventory

At the beginning of 2011, the Gilbert Company's work in process inventory account had a balance of $30,000. During 2011, $68,000 of direct materials were used in production, and $66,000 of direct labor costs were incurred. Factory overhead in 2011 amounted to $90,000. Cost of goods manufactured is $220,000 in 2011. The balance in work in process inventory on December 31, 2011, is:

a. $34,000

Which of the following costs are referred to as conversion costs?

a. Direct labor cost and factory overhead cost

Which of the following manufacturing costs is an indirect cost of producing a product?

a. Oil lubricants used for factory machinery

Which of the following is not a prime cost?

a. Supervisor's wages

Which of the following statements is false?

a. There is no overlap between financial and managerial accounting.

Which of the following is the principle reason for preparing managerial accounting reports?

a. Usefulness to management

An example of a period cost is:

a. advertising expense

Beginning work in process is equal to:

a. cost of goods manufactured plus ending work in process minus manufacturing costs incurred during the current period

Which one of the following will not be found on the balance sheet of a manufacturing company?

a. cost of goods sold

All of the following would be reported on the balance sheet as a current asset except:

a. factory overhead

Indirect labor and indirect materials are classified as:

a. factory overhead and product costs

Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as:

a. factory overhead cost

Which of the following is not a factory overhead cost?

a. materials used directly in the manufacturing process of the product

Costs on the income statement for both a merchandiser and a manufacturer would include:

a. operating expenses

Direct labor and direct materials are classified as:

a. product costs and expensed when the goods are sold

All of the following are ways that managers use managerial information except

a. to evaluate the company's stock performance

The cost of goods sold for Heedy manufacturing in 2011 was $233,000. The January 1, 2011, finished goods inventory balance was $31,600, and the December 31, 2011, finished goods inventory balance was $24,200. Cost of goods manufactured during the period was:

b. $225,600

What term is used to describe the process of monitoring operating results and comparing actual results with the expected results?

b. Controlling

Which of the following is an example of direct labor cost for an airplane manufacturer?

b. Cost of wages of assembly worker

Which of the following is considered a part of factory overhead cost?

b. Depreciation of factory buildings

Which of the following is an example of a factory overhead cost?

b. Factory heating and lighting cost

Which of the following is not a characteristic of useful managerial accounting reports?

b. GAAP

What is the primary criterion for the preparation of managerial accounting reports?

b. Meet the manager needs

What term is used to describe the process of developing the organization's objectives and translating those into courses of action?

b. Planning

In order to be useful to managers, management accounting reports should possess all of the following characteristics EXCEPT:

b. be prepared in accordance with generally accepted accounting principles

All of the following employees hold line positions in Anthea Electric EXCEPT:

b. vice president of finance

Goods that are partially completed by a manufacturer are referred to as:

b. work in process inventory

Work in process inventory on December 31, 2011, is $42,000. Work in process inventory decreased 40% during 2011. Total manufacturing costs incurred in 2011 amount to $260,000. What is cost of goods manufactured?

c. $288,000

Beginning Raw Materials Inventory $75,000 Materials Purchased $20,000 Ending Raw Materials Inventory $30,000 What is the amount of raw materials used?

c. $65,000

What term is used to refer to the cost of changing direct materials into a finished manufactured product?

c. Conversion cost

In the income statement of a manufacturing company, what replaces purchases in the cost of goods section of a retail company?

c. Cost of goods manufactured

The cost of a manufactured product generally consists of which of the following costs?

c. Direct labor cost, direct materials cost, and factory overhead cost

Which of the following is most associated with financial accounting?

c. Prepared in accordance with GAAP

A company sells goods for $300,000 that cost $140,000 to manufacture. Which statement(s) are true?

c. The company will decrease finished goods by $140,000.

A plant manager's salary may be referred to as:

c. an indirect cost

Finished goods inventory is reported on the:

c. balance sheet as a current asset

Cost of goods sold for a manufacturer equals cost of goods manufactured plus:

c. beginning finished goods inventory less ending finished goods inventory

Costs which are reported on the income statement as part of cost of goods sold are referred to as:

c. cost of goods manufactured

Conversion costs are

c. factory overhead and direct labor

All of the following would probably be considered a direct material except:

c. glue

The controller's staff often consists of several management accountants. All of the following would most likely be on the controller's staff EXCEPT:

c. investments and shareholder relations managers

The primary goal of managerial accounting is to provide information to:

c. management

Accounting designed to meet the needs of decision-makers inside the business is referred to as:

c. managerial accounting

Reedy Company reports the following information for 2012: Cost of goods manufactured $69,500 Direct materials used 27,000 Direct labor incurred 25,000 Work in process inventory, January 1, 2012 11,000 Factory overhead is 75% of the cost of direct labor. Work in process inventory on December 31, 2012, is:

d. $12,250

Williams Company reports production costs for 2012 as follows: Direct materials used $375,000 Direct labor incurred 250,000 Factory overhead incurred 400,000 Operating expenses 145,000 Williams Company's period costs for 2012 amount to:

d. $145,000

Compute conversion costs given the following data: Direct Materials, $452,700; Direct Labor, $186,300; Factory Overhead, $175,600; and Selling Expenses, $45,290.

d. $361,900

Managerial accountants would most likely prepare all of the following reports except:

d. An annual report for external regulators such as the SEC.

Which of the following is an example of direct materials cost for an automobile manufacturer?

d. Cost of interior upholstery

Which of the following are basic phases of the management process?

d. Planning and controlling

Which of the following is false in regards to direct materials for an auto manufacturer?

d. Small plastic clips to hold on door panels, that become part of the auto, must be accounted for as direct materials.

Materials must have which two qualities in order to be classified as direct materials?

d. They must be an integral part of the finished product and be a significant portion of the total product cost.

Which of the following would be least likely to be considered a managerial accounting report?

d. a statement of stockholders' equity

What is the purpose of the Statement of Cost of Goods Manufactured?

d. all of the answers are true

Product costs

d. appear on both the income statement and balance sheet

Rent expense incurred on a factory building would be treated as a(n):

d. both A and C are correct

Which of the following accounts will be found on the income statement?

d. cost of goods sold

Factory overhead includes:

d. indirect labor and indirect materials

Work in Process, Beginning $10,000 Work in Process, Ending $15,000 Direct Labor Costs Incurred $4,000 Cost of Goods Manufactured $8,000 Factory Overhead $8,000 What is the amount of direct materials used?

a. $1,000

Williams Company reports production costs for 2012 as follows: Direct materials used $375,000 Direct labor incurred 250,000 Factory overhead incurred 400,000 Operating expenses 145,000 Williams Company's product costs for 2012 amount to:

a. $1,025,000

Cost of Materials Used $40,000 Direct Labor costs $55,000 Factory Overhead $32,000 Work in Process, beg. $28,000 Work in Process, end. $18,000 Finished Goods,beg. $28,000 Finished Goods, end. $18,000 What is Cost of Goods Sold?

a. $147,000

Which of the following items would not be classified as part of factory overhead?

a. Direct labor used

A company used $35,000 of direct materials, incurred $73,000 in direct labor cost, and $114,000 in factory overhead costs during the period. If beginning and ending work in process inventories were $28,000 and $21,000 respectively, the cost of goods manufactured was:

a. $229,000

Work in process inventory on December 31, 2011, is $44,000. Work in process inventory increased 60% during 2011. Cost of goods manufactured for 2011 amounts to $275,000. What are the total manufacturing costs incurred in 2011?

a. $291,500