MANAGERIAL ACCT 1

A cost that can be traced to a cost object is known as​ a(n) A. direct cost. B. period cost. C. indirect cost. D. product cost.

A. direct cost.

A janitor in the factory would be​ considered? A. indirect labor and manufacturing overhead. B. period costs. C. direct labor. D. direct materials.

A. indirect labor and manufacturing overhead.

Chapter 3 discusses job costing. Process costing was briefly discussed. Which company listed below would most likely use process costing. A. Engineering firm B. Law firm C. soda pop manufacturer D. custom jewelry maker

C. soda pop manufacturer

The CEO manages the company on a daily basis

CEO

Typically, the treasurer and the controller report directly to the CFO.

CFO

Managers' responsibilities in an organization include decision making and continuous feedback. Of the three direct responsibilities of a​ manager, which one covered comparing the actual results to the budget the manger is responsible​ for?

Controlling

Which of the following types of companies has raw​ materials, work in process and finished goods​ inventory? A. Retailers B. Wholesalers C. Service companies D. Manufacturers

D. Manufacturers

​Overallocated/overcosted overhead occurs when A. allocated overhead all year long is less than the actual manacturing overhead at year end B. estimated overhead at the beginning of the year is less than the actual manacturing overhead at year end C. estimated overhead at the beginning of the year is greater than the actual manacturing overhead at year end D. allocated overhead all year long is greater than the actual manufacturing overhead at year end

D. allocated overhead all year long is greater than the actual manufacturing overhead at year end

A​ ________ is a source document used to track employee hours. A. process costing B. job cost record C. job costing D. labor time record

D. labor time record

Indirect costs cannot be directly traced to​ a(n) COST OBJECT.

cost object

DIRECTING is the management process of overseeing the company's day-to-day operations.

directing

PRODUCT COSTS are initially treated as ASSETS on the balance sheet.

product costs, assets

Johnson​ & Johnson, a personal care products​ manufacturer, converts RAW MATERIALS INVENTORY into finished products.

raw materials inventory

Jasper Carts manufactures custom carts for a variety of uses. The following data have been recorded for Job​ 651, which was recently completed. Direct materials used cost​ $7,700. There were 178 direct labor hours worked on this job at a direct labor wage rate of​ $22 per hour. There were 90 machine hours used on this job. The predetermined overhead rate is​ $32 per machine hour used. What is the total manufacturing cost of Job​ 651? A. ​$14,496 B. ​$7,968 C. ​$2,880 D. ​$3,916

A. ​$14,496

Which of the following professional standards requires management accountants to not disclose private information about their​ organizations? A. Credibility B. Confidentiality C. Competence D. Integrity

B. Confidentiality

Advertising expenses would be considered which element of the value​ chain? A. Research and development B. Marketing C. Customer service D. Production

B. Marketing

Here are selected basic data for Wilson​ Company: Estimated manufacturing overhead ​ $243,750 Factory utilities ​ $31,100 Estimated labor hours ​ 35,000 Indirect labor ​ $22,800 Actual direct labor hours ​ 36,000 Sales commissions ​ $54,300 Estimated direct labor cost ​ $325,000 Factory rent ​ $47,700 Actual direct labor cost ​ $320,000 Factory property taxes ​ $28,700 Factory depreciation ​ $65,500 Indirect materials ​ $33,300 If the company allocates overhead based on direct labor​ cost, what are the total actual manufacturing overhead​ costs? A. ​$283,400 B. ​$229,100 C. ​$173,000 D. ​$260,600

B. ​$229,100

Costs of Goods Sold of a manufacturing represents the costs related to building a product that are expensed when it is sold. To determine Costs of Goods​ Sold, three formulas where used representing the three different categories of inventory. Which schedule is based on work in process​ inventory? A. Direct Materials Used B. Income Statement C. Costs of Goods Manufactured D. Cost of Goods Sold

C. Costs of Goods Manufactured

​Kohl's Department​ Store, a clothing and home goods​ store, is primarily what type of​ company? A. Real estate B. Service C. Retailer D. Manufacturer

C. Retailer

In job​ costing, what is included in the cost of a​ job? A. manufacturing overhead B. direct labor and manufacturing overhead C. direct​ materials, direct labor and manufacturing overhead D. direct materials and direct labor

C. direct​ materials, direct labor and manufacturing overhead

Before the year​ began, Butler Manufacturing estimated that manufacturing overhead for the year would be​ $176,400 and that​ 13,800 direct labor hours would be worked. Actual results for the year included the​ following: Actual manufacturing overhead cost ​$185,000 Actual direct labor hours ​ 14,600 The predetermined manufacturing overhead rate per direct labor hour is closest to A. ​$13.41. B. ​$12.67. C. ​$12.78. D. ​$12.08.

C. ​$12.78.

The value chain describes the costs associated with making a product. What​ box(es) are expensed immediately when incurred on the income statement as operating​ expenses/SGA ("period​ costs")? A. All of them B. Marketing C. Production or Purchases D. All of​ them, except production or purchases

D. All of​ them, except production or purchases

Which statement is FALSE regarding Manufacturing​ Overhead? A. Manufactuirng overhead includes manufacturing costs of making the​ product, that are not direct materials and direct labor. B. Examples of manufacturing overhead​ include: plant​ supervision, depreciation of plant and factory​ equipment, insurance and taxes on the​ plant, indirect materials and indirect labor. C. Manufacturing overhead can include indirect materials and indirect labor​ (supervision, janitorial,​ engineers, etc.) D. Examples of manufacturing overhead include costs of raw​ materials, assembly line​ workers, and other costs to produce the product.

D. Examples of manufacturing overhead include costs of raw​ materials, assembly line​ workers, and other costs to produce the product.

Due to many organizations reporting fraudulent financial​ statements, companies on certain stock exchanges are required to form an audit committee. An audit committee​ is/does all of the following​ except: A. internal audit reports to the audit committee B. hire the external auditors C. ​sub-set of the Board of Directors D. are employees of the company

D. are employees of the company

When is the predetermined manufacturing overhead rate calculated and what is it used​ for? A. beginning of the​ year; to allocate direct​ materials, direct​ labor, and manufacturing overhead to a job during the year B. end of the​ year; to allocate manufacturing overhead to a job during the year C. end of the​ year; to allocate direct​ materials, direct​ labor, and manufacturing overhead to a job during the year D. beginning of the​ year; to allocate manufacturing overhead to a job during the year

D. beginning of the​ year; to allocate manufacturing overhead to a job during the year

Utilites and propert taxes for the plant factory would be​ considered? A. direct labor. B. direct materials. C. indirect labor and manufacturing overhead. D. manufacturing overhead.

D. manufacturing overhead.

George's Chemicals allocates overhead based on machine hours. Selected data for the most recent year follow. Estimated manufacturing overhead cost ​$235,400 Actual manufacturing overhead cost ​$244,600 Estimated machine hours ​20,100 Actual machine hours ​23,200 The estimates were made as of the beginning of the​ year, while the actual results were for the entire year. The amount of manufacturing overhead allocated for the year based on machine hours would have been Modifying question mark with underline ​(Round intermediary calculations to the nearest​ cent.) A. ​$244,600. B. ​$211,916. C. ​$235,400. D. ​$271,672.

D. ​$271,672.

Of the following​ skills, which are needed by​ today's management​ accountants? A. Strategic thinking B. Cost management C. Decision analysis D. All of the above

D. All of the above

ERP serves the information needs of people in accounting as well as people in marketing and in the warehouse.

ERP

Financial accounting provides information on a company's past performance to external parties

FINANCIAL ACCOUNTING

INVENTORY (MERCHANDISE) for a company such as Best Buy​ (consumer electronics) includes all of the costs necessary to purchase products and get them onto the store shelves.

Inventory (merchandise)

MANAGERIAL ACCOUNTING systems report on various segments or business units of the company.

Managerial accounting

systems are chosen by comparing the costs versus the benefits of the system and are not restricted by GAAP (or International Financial Reporting Standards, IFRS, in the case of companies headquartered in many countries outside of the United States).

Managerial accounting

Choosing goals and the means to achieve them is the planning function of management.

PLANNING

Ethical Standards are critical for management accountants. Which one best relates to​ Competance?

Perform professional duties in accordance with laws, regulations and technical standards.

The SARBANES-OXLEY ACT OF 2002 was enacted to restore trust in publicly traded corporations, their management, their financial statements, and their auditors.

Sarbanes-Oxley Act of 2002

Which of the following requires the​ company's CEO and CFO to assume responsibility for the​ company's financial statements and​ disclosures?

Sarbanes-Oxley Act of 2002​ (SOX)

WORK IN PROCESS INVENTORY is composed of goods partially through the manufacturing process​ (not finished​ yet).

Work in process inventory

The allocation process results in a less precise cost figure being ASSIGNED to the COST OBJECTS

assigned, cost objects

The BILL OF MATERIALS is like a list of ingredients in a​ recipe, stating the materials needed to produce a product.

bill of materials

Perform professional duties in accordance with relevant laws, regulations, and technical standards.

competence

Provide decision support information and recommendations that are accurate, clear, concise, and timely

competence

Recognize and communicate professional limitations that would preclude responsible judgment or successful performance of an activity.

competence

Inform all relevant parties regarding the appropriate use of confidential information. Monitor subordinates' activities to ensure compliance.

confidentiality

Keep information confidential except when disclosure is authorized or legally CONFIDENTIALITY required.

confidentiality

Refrain from using confidential information for unethical or illegal advantage

confidentiality

The CONTROLLER is the person responsible for general financial accounting, managerial accounting, and tax reporting.

controller

CONTROLLING is the management process of evaluating the results of business operations against the plan and making adjustments to keep the company pressing toward its goals.

controlling

When managers evaluate the company's performance compared to the plan, they are performing the CONTROLLING role of management.

controlling

CONVERSION COSTS are the costs of transforming direct materials into finished goods.

conversion costs

Costs that can be directly traced to​ a(n) COST OBJECT are called DIRECT COSTS

cost object are called direct costs

When manufacturing companies sell their finished​ products, the costs of those finished products are removed from inventory and expensed as COST OF GOODS SOLD.

cost of goods sold

Communicate information fairly and objectively

credibility

Disclose delays or deficiencies in information, timeliness, processing, or internal CREDIBILITY controls in conformance with organization policy and/or applicable law.

credibility

Disclose all relevant information that could reasonably be expected to influence CREDITIBILITY an intended user's understanding of the reports, analyses, or recommendations.

creditbility

Financial accounting develops reports for external parties such as CREDITORS and SHAREHOLDERS

creditors and shareholders

Financial accounting develops reports for external parties such as CREDITORS and SHAREHOLDERS.

creditors and shareholders

CRITICAL THINKING improves the quality of thought by skillfully analyzing, assessing, and reconstructing initial thoughts

critical thinking

In the​ future, after​ graduation, you will end up working with various individuals accross the​ organization, not just employees in your own department. What term is best associated with​ this?

cross-functional teams

​Steel, tires,​ engines, upholstery,​ carpet, and dashboard instruments are used in the assembly of a car. Since the manufacturer can trace the cost of these materials​ (including freight-in and import​ duties) to specific units or batches of​ vehicles, they are considered DIRECT COSTS of the vehicles.

direct costs

The three pillars of sustainability are: ECONOMIC, ENVIRONMENTAL, and SOCIAL.

economic, environmental, and social.

CPAs audit the FINANCIAL ACCOUNTING statements of public companies.

financial accounting

Companies must follow GAAP (or International Financial Reporting Standards, IRFS, in the case of companies headquartered in many countries outside of the United States) in their FINANCIAL ACCOUNTING systems.

financial accounting

FINANCIAL ACCOUNTING statements of public companies are audited annually by CPAs.

financial accounting

Information on a company's past performance is provided to external parties by

financial accounting

US companies must follow GAAP (or International Financial Reporting Standards, IFRS, in the case of companies headquartered in many countries outside of the United States) in their FINANCIAL ACCOUNTING systems.

financial accounting

The FINANCIAL ACCOUNTING SYSTEM is geared toward producing periodic financial statements that will be used by investors and creditors to make investment and lending decisions.

financial accounting system

​Company-paid FRINGE BENEFITS may include health​ insurance, retirement plan​ contributions, payroll​ taxes, and paid vacations.

fringe benefits

INTEGRATED REPORT is a broad holistic report that describes all material elements of value creation, not just the financial elements.

integrated report

Abstain from engaging in or supporting any activity that might discredit the profession.

integrity

Mitigate actual conflicts of interest. Regularly communicate with business associates to avoid apparent conflicts of interest. Advise all parties of any potential conflicts.

integrity

Refrain from engaging in any conduct that would prejudice carrying out duties ethically.

integrity

The role of the INTERNAL AUDIT function is to ensure that the company's internal controls and risk management policies are functioning properly.

internal audit

The accounting department will not pay​ a(n) INVOICE unless it agrees with the quantity of parts both ordered and received.

invoice

A(n) JOB COST RECORD is used to accumulate all of the costs affiliated with each job.

job cost record

All direct laborers in the factory fill out​ a(n) labor time record.

labor time record

MANAGERIAL ACCOUNTING systems report on various segments or business units of the company

managerial accounting

MANAGERIAL ACCOUNTING systems are not restricted by GAAP (or International Financial Reporting Standards, IFRS, in the case of companies headquartered in many countries outside of the United States) but are chosen by comparing the costs versus the benefits of the system.

managerial accouting

Decision makers inside a company are the MANAGERS.

managers

MANAGERS are decision makers inside a company.

managers

This course is dealing with managerial accounting versus financial accounting. One of the biggest differences between the two is

managers and other internal organization users will receive various reports to help them achieve their goals and​ objectives, whereas financial accounting deals with a set of financial statements that are provided to external users.

MANUFACTURING report three types of inventory on the balance sheet.

manufacturing companies

Forever​ 21, Target, and​ Kohl's are all examples of MERCHANDISING COMPANIES.

merchandising companies

PERIOD COSTS include​ R&D, marketing, distribution and customer service costs.

period costs

Choosing goals and the means to achieve them is the PLANNING function of management

planning

PLANNING is the management process of setting goals and objectives for the company and determining

planning

Direct material plus direct labor equals PRIME COSTS.

prime costs

U.S. GAAP requires companies to use only PRODUCT COSTS for inventory reported on external financial statements.

product costs

Before production​ begins, the​ manufacturer's purchasing department issues PURCHASE ORDERS to its supplier for needed direct materials.

purchase orders

Each item in the raw materials storeroom has its own RAW MATERIALS RECORD.

raw materials record

The RAW MATERIALS RECORD is a control for the materials stored in the storeroom. In order to get direct​ materials, a(n) MATERIALS REQUISITION must be presented.

raw materials record, materials requisition

​A(n) RECEIVING REPORT is typically a duplicate of the purchase order but without the quantity​ pre-listed on the form.

receiving report

A law​ office, an advertising​ agency, and a hospital are all examples of service companies.

service companies

SERVICE COMPANIES typically do not have an inventory account.

service companies

Most​ for-profit organizations can be described as being in one​ (or more) of three​ categories: SERVICE COMPANIES, MERCHANDISING COMPANIES, AND MANUFACTURING COMPANIES.

service companies, merchandising companies ,and manufacturing companies

The goal of producing near perfection with less than 3.4 defects per one million opportunities is called SIX SIGMA.

six sigma

SUSTAINABILITY is the ability to meet the needs of the present without compromising the ability of future generations to meet their own needs.

sustainability

TOTAL COSTS include the costs of all resources used throughout the value chain.

total costs

The TREASURER is the person responsible for raising the firm's capital and investing its funds

treasurer

WHOLESALERS buy products in bulk from​ producers, marks them​ up, and resell to retailers.

wholesalers