111. If beginning and ending goods in process inventories are $5,000 and $15,000, respectively,
and cost of goods manufactured is $170,000, what is the total manufacturing cost for the period?
A. $180,000.
B. $155,000.
C. $160,000.
D. $175,000.
E. $165,000.
112. Using the information below for Talking Toys, Inc., determine the manufacturing costs
incurred during the year:
Direct materials used $12,500
Goods in process, January 1 50,000
Goods in process, December 31 37,000
Total Factory overhead 5,500
Direct labor used 26,500
A. $13,000.
B. $44,500.
C. $57,500.
D. $94,500.
E. $89,000.
113. Using the information below for Talking Toys, Inc., determine cost of goods manufactured
for the year:
Direct materials used $12,500
Goods in process, January 1 50,000
Goods in process, December 31 37,000
Total Factory overhead 5,500
Direct labor used 26,500
A. $13,000.
B. $44,500.
C. $57,500.
D. $94,500.
E. $52,000.
114. Using the information below for Hardy Company; determine the manufacturing costs added
during the current year:
Direct materials used $5,000
Direct Labor 7,000
Total Factory overhead 5,100
Beginning goods in process 3,000
Ending goods in process 4,000
A. $12,000.
B. $16,100.
C. $17,100.
D. $18,100.
E. $13,600.
115. Using the information below for Hardy Company; determine the cost of goods
manufactured during the current year:
Direct materials used $5,000
Direct Labor 7,000
Total Factory overhead 5,100
Beginning goods in process 3,000
Ending goods in process 4,000
A. $12,000.
B. $16,100.
C. $17,100.
D. $18,100.
E. $13,600.
116. Total manufacturing costs incurred during the year do not include:
A. Direct materials used.
B. Factory supplies used.
C. Goods in process inventory, beginning balance.
D. Direct labor.
E. Depreciation of machinery.
117. Which of the following accounts would all appear on a manufacturing statement?
A. Raw materials, factory insurance expired, indirect labor.
B. Raw materials, goods in process, finished goods.
C. Factory buildings, delivery equipment, and depreciation on factory equipment.
D. Direct labor, indirect labor, sales salaries.
E. Direct labor, factory repairs and maintenance, wages payable.
118. Which of the following represents the correct formula for calculating cost of goods
manufactured?
A. Direct materials used + direct labor + factory overhead + beginning goods in process + ending
goods in process.
B. Direct materials used + direct labor + factory overhead + beginning goods in process – ending
goods in process.
C. Direct materials used + direct labor + factory overhead – beginning goods in process + ending
goods in process.
D. Direct materials used + direct labor + factory overhead – beginning goods in process – ending
goods in process.
E. Direct materials used + direct labor – factory overhead + beginning goods in process – ending
goods in process.
119. Current information for the Austin Company follows:
Beginning raw materials inventory $ 15,200
Beginning goods in process inventory 22,400
Ending raw materials inventory 16,600
Ending goods in process inventory 28,000
Direct labor 42,800
Total factory overhead 30,000
Raw material purchases 60,000
All raw materials used were traceable to specific batches of product. Austin Company’s cost of
goods manufactured for the year is:
A. $125,800.
B. $128,600.
C. $131,400.
D. $137,000.
E. $139,000.
120. Use the following data to determine the cost of goods manufactured.
Beginning finished goods inventory $ 10,800
Direct labor 30,600
Beginning goods in process inventory 7,200
General and administrative expenses 13,500
Direct materials used 40,500
Ending goods in process inventory 9,000
Indirect labor 6,300
Ending finished goods inventory 9,500
Indirect materials 13,500
Depreciation – factory equipment 7,500
A. $102,000.
B. $110,100.
C. $ 96,600.
D. $113,700.
E. $100,200.
121. Use the following information to compute the cost of goods manufactured:
Beginning raw materials $5,500
Ending raw materials 4,000
Direct labor 12,250
Raw material purchases 7,400
Depreciation on factory equipment 6,500
Factory repairs and maintenance 3,300
Beginning finished goods inventory 10,200
Ending finished goods inventory 8,900
Beginning goods in process inventory 5,700
Ending goods in process inventory 6,300
A. $36,650.
B. $30,950.
C. $30,650.
D. $30,350.
E. $31,650.
122. The following information pertains to the Hewett Corporation. Calculate the cost of goods
sold for the period:
Beginning Direct Materials $30,000
Ending Direct Materials $70,000
Beginning Goods in Process Inventory $40,000
Ending Goods in Process Inventory $46,000
Beginning Finished Goods Inventory $72,000
Ending Finished Goods Inventory $68,000
Cost of Goods Manufactured for the period $246,000
A. $250,000.
B. $290,000.
C. $242,000.
D. $258,000.
E. $246,000.
123. Using the information below, calculate the cost of goods manufactured for the period.
Beginning Direct Materials $25,000
Ending Direct Materials $30,000
Beginning Goods in Process $55,000
Ending Goods in Process $64,000
Beginning Finished Goods $80,000
Ending Finished Goods $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.
124. Using the information below, calculate gross profit for the period.
Beginning Direct Materials $25,000
Ending Direct Materials $30,000
Beginning Goods in Process $55,000
Ending Goods in Process $64,000
Beginning Finished Goods $80,000
Ending Finished Goods $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. Cannot be determined from the information provided.
125. 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.
126. The manufacturing statement 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.
127. All of the following statements regarding manufacturing costs are true except:
A. Direct material costs that increase with production are called variable costs.
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 costs.
D. When overhead costs don’t vary with production, they are called fixed overhead.
E. Overhead can be both variable and fixed.
128. 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.
129. Just-in–time manufacturing techniques can be useful in _____________ days’ sales in raw
materials inventory.
A. keeping it constant.
B. changing it upward.
C. adding to.
D. lowering.
E. increasing.
130. Which of the following statements is true regarding product and period costs?
A. Office salaries expense is a product cost and factory maintenance is a period cost.
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 is a product cost and indirect labor is a period cost.
131. Choosing to outsource a component of a product or manufacture it internally is an example
of a(n):
A. Opportunity cost.
B. Sunk cost.
C. Out-of-pocket cost.
D. Period cost.
E. Fixed cost.
132. A company’s prime costs total $4,500,000 and its conversion costs total $5,500,000. If
direct materials 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.
133. If the cost of the beginning goods 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 goods in process inventory:
A. $35,000.
B. $25,000.
C. $45,000.
D. $350,000.
E. $355,000.
134. Calculate the cost of goods manufactured using the following information:
Direct materials $298,500
Direct labor 132,000
Factory overhead costs 264,000
General and administrative expenses 85,500
Selling expenses 48,800
Goods in process inventory, January 1 118,500
Goods in process inventory, December 31 125,900
Finished goods inventory, January 1 232,100
Finished goods inventory, December 31 238,700
A. $680,500.
B. $701,900.
C. $687,100.
D. $674,600.
E. $772,600.
135. Calculate the cost of goods sold using the following information:
Direct materials $298,500
Direct labor 132,000
Factory overhead costs 264,000
General and administrative expenses 85,500
Selling expenses 48,800
Goods in process inventory, January 1 118,500
Goods in process inventory, December 31 125,900
Finished goods inventory, January 1 232,100
Finished goods inventory, December 31 238,700
A. $680,500.
B. $701,900.
C. $687,100.
D. $674,600.
E. $772,600.
136. Match the following terms with the appropriate definition.
__________ (1) Sunk costs
__________ (2) Indirect costs
__________ (3) Product costs
__________ (4) Prime costs
__________ (5) Fixed costs
__________ (6) Opportunity costs
__________ (7) Period costs
__________ (8) Conversion costs
__________ (9) Factory overhead
__________ (10) Variable costs
(a) Costs that flow directly to the current income statement as expenses.
(b) Costs that change in proportion to changes in volume of activity.
(c) The potential benefit lost by choosing a specific action from two or more alternatives.
(d) Manufacturing expenditures that cannot be separately or readily traced to finished goods.
(e) Expenditures necessary and integral to finished products.
(f) Expenditures incurred in the process of converting raw materials to finished products;
include direct labor and factory overhead.
(g) Costs that have already been incurred and cannot be avoided or changed.
(h) Expenditures 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 are incurred for the benefit of more than one cost object.
137. Match the following terms to the appropriate definitions.
__________ (1) Managerial accounting
__________ (2) Continuous improvement
__________ (3) Raw materials inventory
__________ (4) Customer orientation
__________ (5) Just-in-time manufacturing
__________ (6) Goods in process inventory
__________ (7) Lean business model
__________ (8) Balanced scorecard
__________ (9) Prime costs
__________(10) Raw materials inventory turnover
(a) An idea that rejects the notions of “good enough” and “acceptable” and challenges
employees and managers to continually experiment with new and improved business
practices.
(b) Goods a company acquires to use in making products.
(c) Reveals how many times a company sells its raw materials inventory during a period.
(d) A system that acquires inventory and produces only when needed.
(e) An approach that aids continuous improvement by augmenting financial measures with
information on the drivers or indicators of future financial performance along the four
dimensions of (1) financial, (2) customer, (3) internal business processes; (4) learning and
growth.
(f) Expenditures directly associated with the manufacture of finished goods; includes direct
materials and direct labor.
(g) An idea that means that 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.
138. 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 managers, employees and decision makers internal to the organization.
_____ 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 on the whole organization.
_____ 7. Information is mostly monetary, but includes nonmonetary information.
139. Identify the three categories of manufacturing costs.
140. What is managerial accounting and how is it used to aid decision makers?