168) Using the information below, calculate the cost of goods manufactured for the period:
Beginning Raw Materials Inventory
$
25,000
Ending Raw Materials Inventory
30,000
Beginning Work in Process Inventory
55,000
Ending Work in Process Inventory
64,000
Beginning Finished Goods Inventory
80,000
Ending Finished Goods Inventory
67,000
Cost of Goods Sold for the period
540,000
Sales Revenues for the period
1,254,000
Operating Expenses for the period
232,000
A) $553,000.
B) $536,000.
C) $549,000.
D) $527,000.
E) $525,000.
169) Using the information below, calculate gross profit for the period:
Beginning Raw Materials Inventory
$
25,000
Ending Raw Materials Inventory
30,000
Beginning Work in Process Inventory
55,000
Ending Work in Process Inventory
64,000
Beginning Finished Goods Inventory
80,000
Ending Finished Goods Inventory
67,000
Cost of Goods Sold for the period
540,000
Sales Revenues for the period
1,254,000
Operating Expenses for the period
232,000
A) $714,000.
B) $482,000.
C) $1,022,000.
D) $187,000.
E) $727,000.
170) Using the information below, calculate cost of goods sold for the period:
Sales revenues for the period
$
1,304,000
Operating expenses for the period
239,000
Finished Goods Inventory, January 1
36,000
Finished Goods Inventory, December 31
41,000
Cost of goods manufactured for the period
540,000
A) $774,000.
B) $769,000.
C) $530,000.
D) $535,000.
E) $448,000.
171) Using the information below, calculate gross profit for the period:
Sales revenues for the period
$
1,304,000
Operating expenses for the period
239,000
Finished Goods Inventory, January 1
36,000
Finished Goods Inventory, December 31
41,000
Cost of goods manufactured for the period
540,000
A) $774,000.
B) $769,000.
C) $530,000.
D) $535,000.
E) $448,000.
172) Using the information below, calculate net income for the period:
Sales revenues for the period
$
1,304,000
Operating expenses for the period
239,000
Finished Goods Inventory, January 1
36,000
Finished Goods Inventory, December 31
41,000
Cost of goods manufactured for the period
540,000
A) $774,000.
B) $769,000.
C) $530,000.
D) $535,000.
E) $448,000.
173) An internal control system consists of the policies and procedures managers use to do all of
the following except:
A) Urge adherence to company policies.
B) Promote efficient operations.
C) Ensure reliable accounting.
D) Determine pricing for products.
E) Protect assets.
174) The schedule of cost of goods manufactured is divided into four parts consisting of all of
the following except:
A) Direct materials.
B) Computation of cost of goods sold.
C) Overhead.
D) Computation of cost of goods manufactured.
E) Direct labor.
175) All of the following statements regarding manufacturing costs are true except:
A) Direct material costs are traceable to products.
B) The reporting of fixed and variable costs separately is not helpful to managers in analyzing
cost behavior.
C) When overhead costs vary with production, they are called variable overhead.
D) When overhead costs don’t vary with production, they are called fixed overhead.
E) Overhead can be both variable and fixed.
176) Using the information below, compute the raw materials inventory turnover:
Raw materials used
$
85,500
Beginning raw materials inventory
8,000
Ending raw materials inventory
9,000
A) 11.02.
B) 382.02.
C) 10.06.
D) 9.94.
E) 9.50.
177) Using the information below, compute the days’ sales in raw materials inventory:
Raw materials used
$
85,500
Beginning raw materials inventory
8,000
Ending raw materials inventory
9,000
A) 11.02.
B) 36.3.
C) 10.06.
D) 9.94.
E) 38.4.
178) Using the information below, compute the raw materials inventory turnover:
Raw materials used
$
Beginning raw materials inventory
Ending raw materials inventory
A) 6.76.
B) 6.02.
C) 54.0.
D) 60.6.
E) 6.37.
179) Using the information below, compute the days’ sales in raw materials inventory:
Raw materials used
$
Beginning raw materials inventory
Ending raw materials inventory
A) 6.76.
B) 6.02.
C) 54.0.
D) 60.6.
E) 6.37.
180) Just-in-time manufacturing techniques can be useful in ________ days’ sales in raw
materials inventory.
A) keeping constant.
B) changing upward.
C) adding to.
D) lowering.
E) increasing.
181) Which of the following statements is true regarding product and period costs?
A) Office salaries expense and factory maintenance are both product costs.
B) Office rent is a product cost and supervisors’ salaries expense is a period cost.
C) Factory rent is a product cost and advertising expense is a period cost.
D) Delivery expense is a product cost and indirect materials is a period cost.
E) Sales commissions and indirect labor are both period costs.
182) A company’s prime costs total $4,500,000 and its conversion costs total $5,500,000. If
direct materials costs are $2,000,000, calculate the overhead costs:
A) $2,500,000.
B) $3,500,000.
C) $2,000,000.
D) $1,000,000.
E) $3,000,000.
183) If the cost of the beginning work in process inventory is $60,000, costs of goods
manufactured is $890,000, direct materials cost is $330,000, direct labor cost is $210,000, and
overhead cost is $315,000, calculate the ending work in process inventory.
A) $35,000.
B) $25,000.
C) $45,000.
D) $350,000.
E) $355,000.
184) If the cost of the beginning work in process inventory is $60,000, direct materials cost is
$350,000, direct labor cost is $216,000, and overhead cost is $319,000, and the ending work in
process inventory is $55,000, calculate the cost of goods manufactured.
A) $1,000,000.
B) $571,000.
C) $885,000.
D) $890,000.
E) $945,000.
185) Calculate the cost of goods manufactured using the following information:
Direct materials used
$
Direct labor used
Factory overhead costs
General and administrative expenses
Selling expenses
Work in Process inventory, January 1
Work in Process inventory, December 31
Finished goods inventory, January 1
Finished goods inventory, December 31
A) $680,500.
B) $701,900.
C) $687,100.
D) $674,600.
E) $772,600.
186) Calculate the cost of goods sold using the following information:
Direct materials used
$
Direct labor used
Factory overhead costs
General and administrative expenses
Selling expenses
Work in Process inventory, January 1
Work in Process inventory, December 31
Finished goods inventory, January 1
Finished goods inventory, December 31
A) $680,500.
B) $701,900.
C) $687,100.
D) $674,600.
E) $772,600.
187) Match each of the following terms with the appropriate definition.
________ (1) Direct materials
________ (2) Indirect costs
________ (3) Product costs
________ (4) Prime costs
________ (5) Fixed costs
________ (6) Direct labor
________ (7) Period costs
________ (8) Conversion costs
________ (9) Factory overhead
________ (10) Variable costs
(a) Costs that are expensed to the income statement in the period incurred..
(b) Costs that change in proportion to changes in volume of activity.
(c) The efforts of employees who physically convert materials to finished products.
(d) Manufacturing costs that cannot be separately or readily traced to finished goods.
(e) Costs necessary to create a product..
(f) Costs incurred in the process of converting raw materials to finished products; include direct
labor and factory overhead.
(g) Tangible components of a finished product separately and readily traced through the
manufacturing process.
(h) Costs directly associated with the manufacture of finished products; include direct materials
and direct labor.
(i) Costs that do not change in total with changes in the volume of activity.
(j) Costs that cannot be easily and cost-beneficially traced to a single cost object.
188) Match each of the following terms to the appropriate definitions.
________ (1) Prime costs
________ (2) Continuous improvement
________ (3) Raw materials inventory
________ (4) Corporate social responsibility
________ (5) Just-in-time manufacturing
________ (6) Work in Process inventory
________ (7) Lean business model
________ (8) Customer orientation
________ (9) Managerial accounting
________(10) Raw materials inventory turnover
(a) An idea that rejects the notions of “good enough” or “acceptable” and challenges
employees and managers to continually experiment with new and improved business
practices.
(b) Materials a company acquires to use in making products.
(c) Reveals how many times a company uses its raw materials inventory in production during a
period.
(d) A system that acquires inventory and produces only when needed.
(e) A concept that considers the demands of diverse stakeholders, including employees,
suppliers, and society.
(f) Costs directly associated with the manufacture of finished goods; includes direct materials
and direct labor.
(g) The idea that managers and employees understand the changing needs and wants of their
customers and align their management and operating practices accordingly.
(h) Products in the process of being manufactured but not yet complete.
(i) A model whose goal is to eliminate waste while satisfying the customer and providing a
positive return to the company.
(j) An activity that provides financial and nonfinancial information to an organization’s
managers and other internal decision makers.
189) For each of the characteristics below, identify whether it is a focus of financial accounting
or managerial accounting. Use the letter F to identify financial accounting and M to identify
managerial accounting.
_____ 1. Users are generally investors, creditors, analysts, and regulators.
_____ 2. Used to assist managers in making planning and control decisions.
_____ 3. Information is structured and controlled by GAAP.
_____ 4. Information is available quickly without the need to wait for an audit.
_____ 5. Information is mainly historical with some predictions.
_____ 6. Emphasis of the information is a company’s projects, processes, and divisions.
_____ 7. Information is mostly monetary, but includes nonmonetary information.
190) Identify and describe the three categories of manufacturing costs.
191) What is managerial accounting and how is it used to aid decision makers?
192) There are many differences between financial and managerial accounting. Identify and
explain at least three of these differences.
193) Explain what is meant by the “lean business model” and why many businesses have
adopted it.
194) Define fraud and give at least two examples of employee fraud.
195) List the four goals of an internal control system.