prin acct 2 ch 18-20

machinery and equipment are moved into small autonomous production lines called manufacturing cells

When a firm adopts lean manufacturing, machinery and equipment are moved into small autonomous production lines called manufacturing cells new machinery and equipment must be purchased from franchised JIT dealers employees are retrained on different equipment but the plant layout generally stays unchanged new, more efficient machinery and equipment must be purchased and installed in the original layout

cost of production report

A report prepared periodically for each processing department summarizing the product costs incurred by the department and the allocation of those costs between completed and partially completed units is termed a manufacturing cost report factory overhead production report cost of production report process cost report

Work in Process and Factory Overhead

A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the materials controlling account in the general ledger to the controlling accounts for Finished Goods and Cost of Goods Sold Work in Process and Finished Goods Work in Process and Factory Overhead Work in Process and Cost of Goods Sold

direct materials and conversion costs

When preparing the cost of production report using the FIFO method, equivalent production units are generally determined for direct materials and direct labor costs only direct materials only direct materials and conversion costs conversion costs only

Materials, Work in Process, and Finished Goods

Which of the following are controlling accounts for a manufacturing business, each with its own subsidiary ledger Materials, Work in Process, and Cost of Goods Sold Materials, Work in Process, and Finished Goods Finished Goods, Work in Process, and Cost of Goods Sold Materials, Finished Goods, and Cost of Goods Sold

direct labor cost and factory overhead cost

Which of the following costs are conversion costs? Question options: direct materials cost and direct labor cost factory overhead cost direct labor cost and factory overhead cost direct materials cost and factory overhead cost

the system accumulates costs per job

All of the following are characteristics of a process cost system except the system may use several work in process inventory accounts the cost flows are similar to the physical flow of materials through the production departments manufacturing costs are grouped by department rather than by job the system accumulates costs per job

sales and administrative expenses

All of the following are product costs except Question options: direct materials sales and administrative expenses factory overhead direct labor

assembly labor's wages

Which of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as conversion costs? administrative salaries accounting department costs raw lumber assembly labor's wages

a debit to Work in Process and a credit to Materials

Which of the following entries would not be found on the books of a service provider? a debit to Work in Process and a credit to Wages Payable a debit to Work in Process and a credit to Overhead a debit to Cost of Services and a credit to Work in Process a debit to Work in Process and a credit to Materials

factory heating and lighting cost

Which of the following is an example of a factory overhead cost? Question options: insurance premiums on salespersons' automobiles president's salary factory heating and lighting cost repair and maintenance cost on an administrative building

controlling

What term is used to describe the process of monitoring operating results and comparing actual results with the expected results? Question options: controlling directing improving planning

prepared in accordance with GAAP

Which of the following is most associated with financial accounting? Question options: can be prepared periodically, or as needed can be prepared for the entity or segment can have both objective and subjective information prepared in accordance with GAAP

to project production

Which of the following is not a use of the cost of production report? to help managers control operations to help managers improve operations to project production to help managers control operations

direct materials

Which of the following is not included in conversion costs? direct materials indirect labor factory overhead direct labor

movement of the product and material is reduced

According to lean manufacturing, movement of the product and material is reduced the product moves from process to process until completion finished goods should always be available in case a customer wants something employees should be expert at one function rather than be cross-trained for multiple functions

factory burden

Another term for factory overhead is Question options: period cost surplus supervisory cost factory burden

5

If a company uses a process cost system to account for the costs in its five production departments, how many work in process accounts will it use? 5 6 4 2

factory overhead cost

If the cost of a material is a small portion of total production cost, it may be classified as part of Question options: factory overhead cost selling and administrative costs miscellaneous costs direct labor cost

cost accounting systems

Job order costing and process costing are cost flow systems inventory tracking systems cost accounting systems pricing systems

waste and simplify the production process

Lean manufacturing attempts to significantly reduce waste and simplify the production process profits inventory needed to produce products processing time

both use job cost sheets

Process and job order cost systems are similar in all of the following ways except both classify product costs as direct materials, direct labor, and factory overhead both use job cost sheets both use perpetual inventory system for materials, work in process, and finished goods both allocate factory overhead costs to products

cost of goods manufactured

Purchases on the income statement of a retail business is comparable to _____ on the income statement of a manufacturing business. Question options: finished goods cost of goods manufactured cost of merchandise available work in process

Work in Process

Recording jobs completed would include a credit to Cost of Goods Sold Finished Goods Factory Overhead Work in Process

Finished Goods

Recording jobs completed would include a debit to Cost of Goods Sold Work in Process Factory Overhead Finished Goods

energy efficiency

Replacing light fixtures with energy-efficient lighting is an example of which eco-efficiency measure? Question options: material use efficiency fuel efficiency energy efficiency waste efficiency

manager needs

What is the primary criterion for the preparation of managerial accounting reports? Question options: relevance of the reports timing of the reports manager needs cost of the reports

planning

What term is used to describe the process of developing the organization's objectives and translating those into courses of action? Question options: decision making improving supervising planning

The system measures costs for each completed job.

Which of the following is not a characteristic of a process cost system? The system allocates costs between completed and partially completed units within a department. The system measures costs for each completed job. Manufacturing costs are grouped by departments. The system may use several work in process accounts

vice president of finance

all of the following employees hold line positions except Question options: vice president of finance vice president of sales manager of equipment vice president of production

processing departments

In process cost accounting, the costs of direct materials and direct labor are charged directly to customer accounts receivable processing departments job orders service departments

combining processing functions into work centers and cross-training workers to perform more than one function

Lean manufacturing is a business philosophy that focuses on reducing time and cost and eliminating poor quality. This is accomplished in manufacturing and nonmanufacturing processes by combining processing functions into work centers and cross-training workers to perform more than one function having production supervisors attempt to enter enough materials into manufacturing to keep all manufacturing departments operating moving a product from process to process as each function is completed having workers typically perform one function on a continuous basis

machine operators

All of the following are examples of indirect labor except Question options: machine operators janitorial personnel maintenance personnel plant managers

hospital

For which of the following businesses would the job order cost system be appropriate? canned soup processor hospital lumber mill oil refinery

allocating departmental costs between completed and partially completed units

In a process cost system, the amount of work in process inventory is valued by multiplying units in ending inventory by the direct materials cost per unit finding the sum of all completed jobs allocating departmental costs between completed and partially completed units finding the sum of all open job costs

equivalent units

The portion of whole units that were completed with respect to either materials or conversion costs within a given accounting period is the definition of equivalent units units started and completed conversion costs ending work in process

factory overhead

The three categories of manufacturing costs comprising the total cost of work in process are direct labor, direct materials and selling expenses direct expenses accounting salaries expense factory overhead

All of these choices

What is the purpose of the statement of cost of goods manufactured? Question options: to determine the ending work in process inventory to determine the ending materials inventory to determine the amount transferred to finished goods All of these choices

direct labor used

Which of the following items would not be classified as part of factory overhead? Question options: direct labor used amortization of manufacturing patents production supervisors' salaries factory supplies used

commissions for sales personnel

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

commissions paid per time period

Which of the following measures would not help managers to control and improve operations? yield trends units produced per time period cost trends of a product commissions paid per time period

all of these choices

When an employee reports for work, he or she may register with an in-and-out card an electronic badge all of these choices a clock card

cost of goods sold

Which of the following accounts will not be found on the statement of cost of goods manufactured? Question options: Which of the following accounts will not be found on the statement of cost of goods manufactured? Work in Process Purchases Cost of Goods Sold

plannng and controlling

Which of the following are basic phases of the management process? Question options: planning and controlling decision making and supervising supervising and directing organizing and directing

Cost of Goods Manufactured

Which of the following are reported on the income statement as part of cost of goods? Question options: operating expenses period costs administrative expenses cost of goods manufactured

drill bits for a drill press used in the plant assembly area

Which of the following is a product cost? salary of a sales manager salary of the company receptionist advertising for a particular product drill bits for a drill press used in the plant assembly area

It accumulates cost for each department within the factory.

Which of the following is not a characteristic of a job order cost system? It provides a separate record for the cost of each quantity of product that passes through the factory. It uses only one work in process account. It is best suited for industries that manufacture custom goods. It accumulates cost for each department within the factory.

adhere to gaap

Which of the following is not a characteristic of useful managerial accounting reports? Question options: historical and estimated data accurate adhere to GAAP prepared as needed

to determine department costs within the firm

Which of the following is not a reason a firm would use a job order cost system? to determine department costs within the firm to determine product pricing to help control costs to determine profit

managerial accounting

Accounting designed to meet the needs of decision makers inside the business is Question options: managerial accounting financial accounting general accounting external accounting

glue

All of the following could be considered a direct material except Question options: fabric steel lumber glue

indirect labor and indirect materials

Factory overhead includes Question options: indirect materials and direct materials factory rent and direct labor direct materials and direct labor indirect labor and indirect materials

work in process inventory

For a manufacturing business, products that are in the process of being manufactured are referred to as work in process inventory materials inventory finished goods inventory supplies inventory

shampoo manufacturer

For which of the following businesses would a process cost system be appropriate? boat repair service custom furniture manufacturer dressmaker shampoo manufacturer

annual report for external regulators such as the SEC

Managerial accountants could prepare all of the following reports except a(n) Question options: performance report identifying amounts of scrap sales report targeting monthly sales and potential bonuses annual report for external regulators such as the SEC control report comparing direct material usage over time

indirect costs

A plant manager's salary is a(n) Question options: indirect cost direct cost direct cost and an indirect cost period cost

factory overhead costs

Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as Question options: miscellaneous expenses factory overhead costs product costs period costs

product costs

Costs that are treated as assets until the product is sold are selling expenses product costs conversion costs period costs

product costs and expensed when incurred

Direct labor and direct materials are Question options: period costs and expensed when the goods are sold product costs and expensed when incurred period costs and expensed when incurred product costs and expensed when the goods are sold

operating costs that are shown on the income statement in the period in which they are incurred

Period costs include Question options: operating costs that are shown on the income statement in the period in which they are incurred operating costs that are shown on the income statement when products are sold current assets on the balance sheet current liabilities on the balance sheet

investments and shareholder relations managers

The controller's staff often consists of several management accountants. All of the following would most likely be on the controller's staff except Question options: general accountants investments and shareholder relations managers cost accountants budget analysts

Work in Process

The controlling account for the cost ledger is Cost of Goods Sold Materials Finished Goods Work in Process

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

The cost of a manufactured product generally consists of which of the following costs? Question options: direct labor cost and factory overhead cost only direct labor cost, direct materials cost, and factory overhead cost direct materials cost and factory overhead cost only direct materials cost and direct labor cost only

debit Work in Process—Dept. B; credit Work in Process—Dept. A

In a process cost system, the cost of completed production in Department A is transferred to Department B by which of the following journal entries? debit Finished Goods—Dept. A; credit Work in Process—Dept. B debit Work in Process—Dept. B; credit Work in Process—Dept. A debit Work in Process—Dept. B; credit Cost of Goods Sold—Dept. A debit Work in Process—Dept. B; credit Finished Goods—Dept. A

They must be an integral part of the finished product and a significant portion of the total product cost.

Materials must have which two qualities in order to be classified as direct materials? Question options: They must be classified as both prime costs and conversion costs. They must be an integral part of the finished product and a significant portion of the total product cost. They must be an integral part of the finished product, but can be an insignificant portion of the total product cost. They must be introduced into the process in both work in process inventories and finished goods inventories.

cost ledger

The details concerning the costs incurred on each job order are accumulated in a work in process account and supported by a cost ledger stock ledger materials ledger creditors ledger

materials requisition

The document authorizing the issuance of materials from the storeroom is a receiving report purchase requisition materials requisition purchase order

release materials from the storeroom to production

The materials requisition is used to record the acquisition of materials from a vendor release finished goods to the shipping department release materials from the storeroom to production record and electronically transmit materials data in place of a receiving report

Management

The primary goal of managerial accounting is to provide information to Question options: investors creditors management external auditors

paper cupcake liners, that become part of the product, must be accounted for as direct materials

Which of the following is not true regarding direct materials for a bakery? Question options: Paper cupcake liners, that become part of the product, must be accounted for as direct materials. Flour and sugar would probably be direct materials. Oil to lubricate factory machines would not be a direct material. Eggs would probably be a direct material.

depreciation of factory equipment and machines

Which of the following is part of factory overhead cost? Question options: sales commissions depreciation of salesperson's vehicle depreciation of factory equipment and machines direct materials used

materials used directly in the manufacturing process of the product

Which of the following may not be a factory overhead cost? Question options: salaries of production supervisors materials used directly in the manufacturing process of the product insurance on factory equipment property tax on factory building

lawn fertilizer manufacturer

Which of the following would be most likely to use a process cost system? lawn fertilizer manufacturer auto body repair shop custom furniture manufacturer law firm

a statement of stockholders' equity

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

swimming pool installer

Which of the following would most likely use a job order cost system? oil refinery company that manufactures chlorine for swimming pools paper mill swimming pool installer