Smartbook Ch 14

A manufacturing company reports the following items: Work in process inventory, beginning balance: $1,000 Work in process inventory, ending balance: $3,000 Direct materials: $5,000 Direct labor: $7,000 Factory overhead: $4,000 The cost of goods

$14000

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. Cost 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.

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

A manufacturing company reports the following items: Work in process inventory, beginning balance: $500; Work in process inventory, ending balance: $200; Direct materials: $700; Direct labor: $600; Factory overhead: $100. The cost of goods manufactured is $

1700

A merchandising company usually has one inventory account while a manufacturing company usually has _____ inventory accounts.

3

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 $

4800

A company incurred the following costs: Selling and administrative expenses: $45,000; Direct materials: $15,000; Income tax expense: $10,000; Direct labor: $30,000; Factory overhead: $5,000. Total manufacturing costs reported on the schedule of cost of goods manufactured are $

50000

Which of the following are product costs for a manufacturer?

Depreciation on the factory equipment Direct materials

A schedule of cost of goods manufactured has the following main sections:

Direct labor Direct materials Overhead Cost of goods manufactured

Costs which are crucial parts of the finished product are called

Direct materials

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

Direct; The hourly workers who clean carpets are a direct and variable cost.

The following items would be included in the overhead section of the schedule of cost of goods manufactured

Factory supplies used Factory insurance Factory utilities

True or false: Finished goods are products which are partially complete.

False; Finished goods are products which are ready for sale.

Managerial accounting has the following characteristics?

Includes mostly monetary and some nonmonetary information Emphasis is on projects, processes, and divisions focus is on internal users

__________ accounting allows internal users to determine what information they need to make planning and control decisions and is not rules-based.

Managerial

Purchase materials

Material Activity

Activities such as purchasing raw materials are considered

Materials

What types of information does managerial accounting provide?

Non-financial Information for managers Financial

Consider a company that manufactures picture frames. Which of the following costs would be considered direct costs?

Oak wood used for frame Glass used in the frame Wages of assembly line worker

Use materials

Production activity

Which of the following are period costs for a manufacturer?

Salary for administrative staff Rent on the office building Sales commissions

Activities that include finished goods are considered

Sales activities

Product sold

Sales activity

Direct materials costs for an automobile manufacturer would include all of the following:

Tires, steering wheels, and bumpers are direct materials for an automobile manufacturer. Employees who work on the product are a direct labor cost.

Factory overhead includes all manufacturing costs except direct materials and direct labor.

True

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?

Used to make planning and control decisions Many projections and estimates

Managerial

Uses current performance and future projections

Financial

Uses past performance using historical information

Consider a company that manufactures picture frames. Which of the following costs would be considered direct costs?

Wages of assembly line worker Oak wood used for frame Glass used in the frame

Partially complete units are known as _________ _____ __________ inventory.

Work in process

Managerial information:

allows estimates and projections

Managerial accounting information is normally provided to managers

as they request it.

The Institute of Management Accountants requires members to:

be competent, maintain confidentiality, act with integrity, and communicate information in a fair and credible manner.

The cost of goods sold for a manufacturer is computed as

beginning finished goods inventory plus cost of goods manufactured minus ending finished goods inventory

The main difference between merchandising and manufacturing companies is that merchandising companies ___________ goods ready for sale and manufacturing companies ___________ products.

buy produce, make, or manufacture

The primary difference between the income statement for a merchandising company and a manufacturing company is in the _____ section.

cost of goods sold

The efforts of employees who work directly to convert direct materials into the finished product are referred to as

direct labor

Those who work directly on the product to convert raw materials into a finished product are known as

direct labor

Which of the following are included in Raw materials inventory?

direct materials and indirect materials

Production activities include:

direct materials used. factory overhead costs. production workers assembling products.

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

direct variable

Managerial accounting report both monetary and nonmonetary information. Examples of nonmonetary information include:

employee satisfaction data. employee diversity. percentage of on-time deliveries.

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

financial pressure, rationalization, opportunity

Inventory which is completed but not yet sold by a manufacturer is known as

finished goods inventory

Managerial reporting systems are

flexible

Managerial accounting has the following characteristics?

focus is on internal users Includes mostly monetary and some nonmonetary information Emphasis is on projects, processes, and divisions

Consider a service company that provides carpet cleaning and uses straight-line depreciation. Classify the cost of the depreciation on the carpet cleaning machines.

indirect and fixed

Each of the following are examples of factory overhead:

indirect materials and indirect labor

Managerial accounting primarily provides information to

internal users

Managerial accounting is different from financial accounting in that:

managerial accounting is used in planning and control decisions and financial accounting is used in making investment and credit decisions

In addition to monetary information, managerial accounting reports __________ information.

nonmonetary or nonfinancial

The fraud triangle shows three factors that push a person to commit fraud and includes ___, pressure, and rationalization.

opportunity

Activities such as using materials and labor to produce finished products are considered

production activities

Managers use an internal control system to:

protect assets. ensure reliable accounting. promote efficiency.

The main purpose of managerial accounting is

providing financial and nonfinancial information to an organization's managers

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

raw materials

Materials activities include:

raw materials beginning inventory. purchasing materials.

Sales activities include:

selling finished products. finished goods inventory.

Direct materials costs for an automobile manufacturer would include all of the following:

tires bumpers steering wheels

Consider a company that manufactures automobiles. Which of the following costs would be considered a direct cost?

wages of assembly line workers

Inventory which is partially complete is known as

work in process