Accounting: Chapter 15

Managerial accounting

Accounting designed to meet the needs of decision makers inside the business is a. managerial accounting b. general accounting c. financial accounting d. external accounting

Machine operators

All of the following are examples of indirect labor except a. plant managers b. janitorial personnel c. machine operators d. maintenance personnel

Factory Overhead

All of the following would be reported on the balance sheet as current assets except a. materials inventory b. work in process inventory c. factory overhead d. finished goods inventory

Factory Burden

Another term for factory overhead is a. factory burden b. period cost c. surplus d. supervisory cost

Factory overhead cost

Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as a. miscellaneous expense b. factory overhead cost c. period cost d. product costs

Beginning Materials + Costs of Materials Purchased - Ending Materials = Direct Material Used

Direct materials cost equation

decision making

Inherent in each of the preceding management processes is _____________ ____________.

$175,000

Jensen Company reports the following: Direct materials used$345,000 Direct labor incurred250,000 Factory overhead incurred400,000 Operating expenses175,000 Jensen Company's period costs are a. $250,000 b. $345,000 c. $400,000 d. $175,000

Direct materials and direct labor

Prime costs are a. direct labor and factory overhead b. direct materials and factory overhead c. period costs and factory overhead d. direct materials and direct labor

Period costs

Selling and administrative expenses incurred in marketing the product, delivering the product, or managing the company and not directly related to manufacturing the product.

management

The primary goal of managerial accounting is to provide information to a. management b. external auditors c. creditors d. investors

Product costs

The three components of manufacturing cost: direct materials, direct labor, and factory overhead costs.

1. cost of good sold 2. cost of goods manufactured

What information can you expect to see on an income statement?

1. Materials inventory 2. work in process inventory 3. Finished goods inventory

What items are reported on the balance sheet in a manufacturing company?

planning and controlling

Which of the following are basic phases of the management process? a. planning and controlling b. organizing and directing c. supervising and directing d. decision making and supervising

C

Which of the following costs are conversion costs? a. direct materials cost and direct labor cost b. factory overhead cost c. direct labor cost and factory overhead cost d. direct materials cost and factory overhead cost

cost of interior upholstery

Which of the following is an example of direct materials cost for an automobile manufacturer? a. cost of wages of assembly worker b. cost of oil lubricants for factory machinery c. cost of interior upholstery d. salary of production supervisor

Plant janitor's wages

Which of the following is not a prime cost? a. machine operator wages b. assembly line wages c. plant janitor's wages d. direct labor wages

Commissions for sales personnel

Which of the following manufacturing costs is an indirect cost of producing a product? a. oil lubricants used for factory machinery b. hourly wages of an assembly worker c. memory chips for a microcomputer manufacturer d. commissions for sales personnel

C.

Which of the following must be true in order for materials to be classified as direct materials? a. They must be classified as both prime costs and conversion costs. b. They must be an integral part of the finished product, but can be an insignificant portion of the total product cost. c. They must be an integral part of the finished product and be a significant portion of the total product cost. d. They must be introduced into the process in both work in process inventories and finished goods inventories.

Planning

Which of the following terms is used to describe the process of developing the organization's objectives and translating those into courses of action? a. decision making b. planning c. supervising d. improving

Controlling

Which of the following terms is used to describe the process of monitoring operating results and comparing actual results with the expected results? a. controlling b. directing c. improving d. planning

Direct labor

______ ________ is both a prime cost and a conversion cost.

Continuous Process Improvement

____________ ____________ ____________ is the philosophy of continually improving employees, business processes, and products.

current liabilities

amounts due to be paid to creditors within twelve months.

long-term assets

assets and property that may not easily be converted into cash.

indirect labor

labor that is not directly related to the production of a product.

Period cost

Insurance expense incurred on a factory building would be treated as a a. direct cost b. product cost c. selling cost d. period cost

direct labor cost, direct materials cost, and factory overhead cost

The cost of a manufactured product generally consists of which of the following costs? a. direct labor cost and factory overhead cost only b. direct materials cost and direct labor cost only c. direct labor cost, direct materials cost, and factory overhead cost d. direct materials cost and factory overhead cost only

directing

The process by which managers run day-to-day operations is called __________.

1. Planning 2. Decision making 3. Improving 4. Controlling 5. Directing

What are the five basic phases of the management process?

1. Heating and lighting the factory 2. Repairing and maintaining factory equipment 3. Property taxes on factory buildings and land 4. Insurance on factory buildings 5. Depreciation of factory plant and equipment

What cost are included in factory overhead?

Cost of wages of assembly worker

Which of the following is an example of direct labor cost for a cell phone manufacturer? a. cost of wages of assembly worker b. cost of oil lubricants for factory machinery c. cost of phone components d. salary of plant supervisor

long-term liabilities

liabilities that are due beyond a year or the normal operation period of the company.

managerial accounting

managers use accounting information in decision-making and to assist in the management and performance of their control functions.

Indirect cost

A plant manager's salary is a(n) a. direct cost b. indirect cost c. direct cost and an indirect cost d. period cost

planning

Management uses _______ in developing the company's objectives (goals) and translating these objectives into courses of action.

Controlling

Monitoring operating results and comparing actual results with the expected results is ______.

Cost of Goods Manufactured

On the income statement of a manufacturing company, which of the following replaces purchases in the "Cost of goods sold" section of a retail company? a. cost of merchandise available b. work in process c. finished goods d. cost of goods manufactured

financial accounting

The branch of accounting that is concerned with recording transactions using generally accepted accounting principles (GAAP) for a business or other economic unit and with a periodic preparation of various statements from such records.

Conversion costs

The combination of direct labor and factory overhead costs; in lean accounting, the osts are the direct labor and overhead expenses incurred when raw materials are transformed into finished products.

Prime costs

The combination of direct materials and direct labor costs.

Current assets

cash and other assets that are expected to be converted to cash within a year.

Direct costs

Costs that are identified with and traced to a cost object.

Indirect costs

Costs that are not identified with or traced to a cost object.