Chapter 1 - Managerial Accounting - Practice Questions

For the year, Redder Company has cost of goods manufactured of $600,000, beginning finished goods inventory of $200,000 and ending finished goods inventory of $250,000. The cost of goods sold is:

$550,000 [beginning finished goods inventory ($200,000) + cost of goods manufactured ($600,000) - ending finished goods inventory ($250,000)]

Which managerial accounting technique attempts to allocate manufacturing overhead in a more meaningful fashion?

Activity-based costing (ABC)

The formula to determine the cost of goods manufactured is:

Beginning work in process inventory + Total manufacturing costs - Ending work in process inventory

After passage of the Sarbanes-Oxley Act:

CEOs and CFOs must certify that financial statements give a fair presentation of the company's operating results

Cost of goods available for sale is a step in the calculation of cost of goods sold of:

a merchandising company and a manufacturing company (both use cost of goods available for sale to calculate cost of goods sold)

Corporate social responsibility refers to:

efforts by companies to employe sustainable business practices with regard to employees and the environment

A computer manufacturer would include depreciation on testing equipment in:

manufacturing overhead

A plant manager's salary, a factory repairman's wages, and a product inspector's salary are all elements of:

manufacturing overhead

Wages paid to a cost accounting department supervisor is classified as a:

period cost

Managerial accounting:

places emphasis on special-purpose information

The management of an organization performs several broad functions. They are:

planning, directing, and controlling

Indirect labor is a:

product cost

Direct materials are a:

product cost only

A cost of goods manufactured schedule shows beginning and ending inventories for:

raw materials and work in process only