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185)
Calculate the cost of goods manufactured using the following information:
Direct materials $ 298,50
0
Direct labor 132,00
0
Factory overhead costs 264,00
0
General and administrative expenses 85,500
Selling expenses 48,800
Work in Process inventory, January 1 118,50
0
Work in Process inventory, December 31 145 125,90
Work in Process inventory, December 31 125,90
0
Finished goods inventory, January 1 232,10
0
Finished goods inventory, December 31 238,70
0
A) $772,600. B) $701,900. C) $680,500. D) $687,100. E) $674,600.
150
186)
Calculate the cost of goods sold using the following information:
Direct materials $ 298,50
0
Direct labor 132,00
0
Factory overhead costs 264,00
0
General and administrative expenses 85,500
Selling expenses 48,800
Work in Process inventory, January 1 118,50
Work in Process inventory, January 1 118,50
0
Work in Process inventory, December 31 125,90
0
Finished goods inventory, January 1 232,10
0
Finished goods inventory, December 31 238,70
0
A) $701,900. B) $680,500. C) $772,600. D) $674,600. E) $687,100.
SHORT ANSWER QUESTIONS
187)
Match 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 flow directly to the current income statement as expenses.
(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 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) Tangible components of a finished product separately and readily traced through the
manufacturing process.
(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.
188)
Match the following terms to the appropriate definitions.
________ (1) Prime costs
________ (2) Continuous improvement
________ (3) Raw materials inventory
(4) Balanced scorecard
________ (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) Goods 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) Aids in 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) The idea 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.
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.
ESSAY QUESTIONS
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.
SHORT ANSWER QUESTIONS
195)
List the four goals of an internal control system.
ESSAY QUESTIONS
196)
An employee devises a payroll scheme that costs the employer $150. The employer discovers the
fraud but decides not to confront the employee since the amount of the fraud is small. Discuss why
this course of action is not advisable.
197)
Define and contrast period costs and product costs. How are they reported in the financial
statements of a manufacturing company?
198)
What are the three types of inventories that are carried by manufacturers? Describe each type of
inventory.
199)
What is the main difference between the income statement of a manufacturer and that of a
merchandiser?
SHORT ANSWER QUESTIONS
200)
What does the days' sales in raw materials inventory ratio reveal?
ESSAY QUESTIONS
201)
What are prime costs? What are conversion costs?
