Managerial Makeup Test Review
Period costs
Costs that are incurred in generating revenue during the period, but are not involved in the manufacturing process are referred to as:
Product costs
Costs that are treated as assets until the product is sold are
125%
Current year: 1,025,000 Preceding year: 820,000 Change in sales from preceding to current year
12.00
FOH Costs: 360,000 DL Hours: 30,000 What was predetermined rate per direct labor hour?
Indirect labor and indirect materials
Factory overhead includes
Balance sheet as a current asset
Finished good inventory is reported on the
A paper mill
For which of the following would the process cost system be apprpriate?
Work in process Inventory
Goods that are partially completed by a manufacturer are:
Over a period of time
Horizontal analysis is a technique for evaluating financial statement data
Calculation of dollar amount changes and percentage changes from the previous to the current year
Horizontal analysis of comparative financial statements includes
$66,000
If a gain of 11,000 is realized in selling (for cash) office equipment having a book value of 55,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is:
Sales
In a common sized income statement, 100% is the:
Debit materials, credit WIP
In a job order cost accounting system, the entry to record the flow of direct materials into production is to
Sales
In a vertical analysis, the base for COGS is:
Base year figure
In horizontal analysis, each item is expressed as a percentage of the
Be prepared in accordance with GAAP
In order to be useful to managers, managerial accting. reports should possess all of the following except
6.25 times
Interest expense was $80,000, net income was 300,000, find times interest earned
175,000
Jensen Company period costs are
$50,000
Land costing 71,000 was sold for 50,000 cash. The loss on the sale was reported on the income statement as other expense. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?
Prepared according to management needs
Managerial accounting reports are
Materials: 190,000 Cash: 190,000
Material purchased on account during the month totaled to 190,000, what would you credit and debit?
Total assets
On a common sized balance sheet, 100% is
Receipts from the issuance of capital stock
On the statement of cash flows, the cash flows from investing activities section would include:
Cash receipts from sales activities
On the statement of cash flows, the cash flows from operating activities section would include
Receipts from the issuance of capital stock
On the statement of cash flows, the cash flows from the financing activities section would include:
make a better comparison of two companies of different sizes in the same industry
One reason a common sized statement is a useful tool in financial analysis is that it enables the user to:
Useful analytical measures
Percentage analyses, ratios, turnovers, and other measures of financial position and operating results are:
Not involved in the production process
Period costs are:
cash flows from financing activities section
Preferred stock issued in exchange for land would be reported in the statement of cash flows in
COGS: 375,000 Finished goods: 375,000
Production costs of 375,000, what are the journal entries to record the transfer of costs from finished goods to COGS is:
2.6
Relationship of $325,000 to $125,000, expressed as a ratio is:
Product Cost
Rent expense on a factory building would be treated as a(n)
34%
Sales: 175,000 COGS: 115,000 Difference: 60,000 Using vertical analysis of the income statement for Sadie Company, determine the gross profit margin
Solvency and Profitability
The ability of a business to pay its debts as they come due and to earn a reasonable amount of income is referred to as
Time tickets
The amount of time spent by an employee in the factory is usually recorded on
DL cost, DM cost, and FOH cost
The cost of a manufactured product generally consists of which of the following costs?
355,000
The current period statement of cash flows includes the following: 310,000+185,000-43,000-97,000=???
Used to evaluate a company's liquidity and short term debt paying ability
The current ratio is
Cost ledger
The details concerning the costs incurred on each job order are accumulated in a work in process account and supported by a
Materials requisition
The document authorizing the issuance of materials from the storeroom is a
debit COGS, credit Finished goods, debit A/R, credit sales
The entries to record cost and sale of a finished good on account is
Debit WIP, credit Wages payable
The entry to record the flow of direct labor costs into production in a job order cost accounting system is to
Sales and Admin Expenses
The following are all product costs except
Average Accounts Receivable
The numerator in calculating the accounts receivable turnover is
operating, investing, financing
The order of presentation of activities on the statement of cash flows is
Finished goods
The recordng of the jobs completed would include a debit to
500,000 overapplied
The thomlin company forecases that total overhead for the current year will be $15,000,000 with 300,000 total machine hours. YTD, the actual overhead is $16,000,000 and the actual machine hours are 33,000 hours. If the Thomlin company uses a predetermined rate based on machine hours applying overhead, as of this point in time (YTD), the overhead is
Direct materials and direct labor
What are prime costs?
55,000
What is the amount of raw materials used? Beginning materials: 30,000 Mats. purchased: 65,000 Ending materials: 40,000
Conversion Cost
What term refers to the costs of the changing of direct materials into a finished manufactured good?
COGS
Which of the following accounts will be found on the income statement?
Planning and controlling
Which of the following are basic phases of the management process?
Job order and process cost systems
Which of the following are the two main types of cost accounting systems for manufacturing operations?
cash flows from operating activities
Which of the following can be found on the statement of cash flows?
Borrowing money by issuing a six-month note
Which of the following increases cash?
Issuance of common stock to acquire land
Which of the following is a noncash investing and financing activity?
Drill bits for a drill press used in the plant assembly area
Which of the following is a product cost
Cost of interior upholstery
Which of the following is an example of direct materials cost for an automobile manufacturer?
Gain on sale of land
Which of the following is deducted to net income as an adjustment under the indirect method of preparing the statement of cash flows?
may rely on estimates and forecasts
Which of the following is most associated with managerial accounting?
Common-sized financial statements
Which of the following is most useful in analyzing companies of different sizes?
Inventory
Which of the following is not included in the computation of quick ratio?
Statement of changes in financial position
Which of the following is not one of the four basic financial statements?
Raw materials, work in process, finished goods, cost of goods sold
Which of the following is the correct flow of manufacturing costs?
Current ratio
Which of the following measures a company's ability to pay its current liabilities?
Predetermined FOH rate times actual activity base
Which of the following represents the FOH applied to a product
A decrease in A/R
Which of the following should be added to net income in calculating net cash flow from operating activies using the indirect method?
The payment of cash to retire a long-term note
Which of the following should be shown on a statement of cash flows under the financing activities section?
Purchase of non current assets
Which of the following types of transactions would be reported as a cash flow from investing activity on the statement of cash flows?
A swimming pool installer
Which of the following would most likely use a job order costing system?
payment of dividends
Which of the following would not be classified as an operating activity?
Direct materials inventory, WIP inventory, finished goods inventory
Which types of inventories does a manufacturing business report on the balance sheet?
Financing activities include
issuing debt
Horizontal Analysis
the percentage analysis of increases and decreases in related items in comparative financial statements
24,500
the product costs of Darwin Company
cash flows from investing activities section
Cash paid to purchase long-term investments would be reported in the statement of cash flows in
$384,200
Compute conversion costs given the following data: DM: 347,500, DL: 196,300, FOH: 187,900 and Selling expenses: 45,290
Operating expenses
Costs on the income statement for both a merchandiser and a manufacturer would be
Factory Overhead Cost
costs other than direct materials and direct labor that are incurred in the manufacturing process
Financing Activities
Cash paid to preferred stock dividends should be shown on the statement of cash flows under the
Common sized balance sheet
A balance sheet that displays only component percentages is a
An increase of $63,000 from investing activities and a deduction from net income of $9,000
A building with a book value of 54,000 is sold for 63,000 cash. Using the indirect method, this transaction should be shown on the statement of cash flows as follows:
270,000
A company manufactured 50,000 units of a product at 450K. It sold 45,000 units at $15 each, what is the gross profit?
Investing Activities
A company purchases equipment for $32,000 cash. This transaction should be shown on the statement of cash flows under the
$720,000
A company with working capital of $720,000 and a current ratio of 2.2 pays a $125,000 short-term liability. The amount of working capital after payment is:
Financing Activities
A ten year bond was issued at par for $250,000 cash. This transaction should be shown on a statement of cash flows under the
Machine Hours
A widely used activity base for developing factory overhead rates in highly automated settings is
$92,000
A/R from sales transactions were $51,000 at the beginning of the year and $64,000 at the end of the year. Net income reported on the income statement for the year was 105,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows prepared by the indirect method is:
Managerial Accounting
Accounting designed to meet the needs of decision makers inside the business is:
Product costs include sales and admin expenses
All of the following are true regarding product costs except:
Glue
All of the following could be a direct material except:
Factory Overhead
All of the following would be reported on the balance sheet as a current asset except
Decrease
An acceleration in the collection of receivables will tend to cause the A/R turnover to:
Vertical Analysis
An analysis in which all the components of an income statement are expressed as a percentage of sales is ?
Advertising expense
An example of a period cost:
13.20
Aspen technologies has following budget data Estimated DL hours: 15,000 Estimated DL $s: 90,000 Estimated FOH costs: $198,000 If FOH is applied to based on DL hours, the predetermined rate is:
76.9%
Assume the following sales data for a company: Current year: 325K Preceding year: 250K What is the percentage increase in sales from preceding to current
Increase by $1,700,000
At the end of the year, overhead applied $42,000,000. Actual overhead was $40,300,000. Closing over/underapplied overhead into COGS would cause net income to:
1.58
Brock company current ratio
cash flows from investing activities
Cash paid for equipment would be reported on the statement of cash flows in: