ACC 102: Ch. 15 Exam Prep.

Work in process inventory on December 31 of the current year is $44,000. Work in process inventory increased by 60% during the year. Cost of goods manufactured amounts to $275,000. The total manufacturing costs incurred in the current year are a. $291,500 b. $233,750 c. $302,000 d. $275,750

Total Manufacturing Costs = Cost of Goods Manufactured - Beginning Work in Process Inventory + Ending Work in Process Inventory $275,000 - ($44,000 ÷ 1.6) + $44,000 = $275,000 - $27,500 + $44,000 = $291,500

An example of a period cost is a. property taxes on plant facilities b. advertising expense c. depreciation on factory equipment d. indirect materials

b. advertising expense

Product costs a. appear only on the income statement b. appear on both the income statement and balance sheet c. are expensed as costs are incurred for direct labor, direct materials, and factory overhead d. appear only on the balance sheet

b. appear on both the income statement and balance sheet.

In order to be useful to managers, managerial accounting reports should possess all of the following characteristics except... a. be prepared to report information for any unit of the business to support decision making b. be prepared in accordance with generally accepted accounting principles c. be provided at any time management needs information d. provide objective measures of past operations and subjective estimates about future decisions

b. be prepared in accordance with generally accepted accounting principles.

Indirect labor and indirect materials are classified as...

b. factory overhead and product costs

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

c. product cost

Direct labor and direct materials are a. product costs and expensed when incurred b. period costs and expensed when incurred c. product costs and expensed when the goods are sold d. period costs and expensed when the goods are sold

c. product costs and expensed when the goods are sold

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

d. direct materials and direct labor.

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

d. management.

Which of the following is the primary criterion for the preparation of managerial accounting reports? a. timing of the reports b. relevance of the reports c. cost of the reports d. manager needs

d. manager needs.

Compute conversion costs given the following data: direct materials, $367,500; direct labor, $209,300; factory overhead, $195,800 and selling expenses, $35,500.

Conversion Costs = Direct Labor Cost + Factory Overhead Cost = $209,300 + $195,800 = $405,100

Work in process inventory on December 31 is $42,000. Work in process inventory decreased by 40% during the year. Total manufacturing costs incurred amount to $260,000. The cost of goods manufactured is...

Cost of Goods Manufactured = Beginning Work in Process Inventory + Total Manufacturing Costs Incurred - Ending Work in Process Inventory = ($42,000 ÷ 0.6) + $260,000 - $42,000 = $70,000 + $260,000 - $42,000 = $288,000

The cost of goods sold for Michaels Manufacturing in the current year was $233,000. The January 1 finished goods inventory balance was $31,600, and the December 31 finished goods inventory balance was $24,200. Cost of goods manufactured during the period was

Cost of Goods Manufactured = Cost of Goods Sold - Beginning Finished Goods Inventory + Ending Finished Goods Inventory = $233,000 - $31,600 + $24,200 = $225,600

Given the following data: Work in process, beginning $14,000 Work in process, ending 20,000 Direct labor costs 4,000 Cost of goods manufactured 8,000 Factory overhead 8,000 Direct materials used is

Direct Materials Used = Cost of Goods Manufactured - Work in Process, Beginning + Work in Process, Ending - Direct Labor Costs - Factory Overhead = $8,000 - $14,000 + $20,000 - $4,000 - $8,000 = $2,000

At the beginning of the current year, Grant Company's work in process inventory account had a balance of $30,000. During the year, $68,000 of direct materials were used in production, and $66,000 of direct labor costs were incurred. Factory overhead for the year amounted to $90,000. Cost of goods manufactured is $230,000. The balance in work in process inventory on December 31 is

Work in Process Inventory on December 31 = Beginning Work in Process Inventory + Direct Materials Used + Direct Labor Incurred + Factory Overhead - Cost of Goods Manufactured = $30,000 + $68,000 + $66,000 + $90,000 - $230,000 = $24,000

The Putney Company reports the following information: Sales $76,500 Cost of direct materials used in production 7,300 Depreciation on factory equipment 4,700 Indirect labor 5,900 Direct labor 10,500 Factory rent 4,200 Factory utilities 1,200 Sales salaries expense 15,600 Office salaries expens 8,900 Indirect materials a. Compute product costs. b. Compute period costs.

a. Product Costs = $7,300 + $4,700 + $5,900 + $10,500 + $4,200 + $1,200 + $1,200 = $35,000 b. Period Costs = $15,600 + $8,900 = $24,500

Which of the following would be least likely to be considered a managerial accounting report? a. statement of cost of goods manufactured b. statement of stockholders' equity c. report to analyze potential efficiencies and savings for the purchase of new production equipment d. schedule of total manufacturing costs incurred

b. statement of stockholders' equity.