Chapter 16(1): Managerial Accounting Concepts and Principles
125.
Given the following data:
Cost of materials used
$45,000
Direct labor costs
48,000
Factory overhead
39,000
Work in process, beg.
28,000
Work in process, end.
18,000
Finished goods, beg.
28,000
Finished goods, end.
18,000
What is cost of goods sold?
a. $152,000
b. $142,000
c. $10,000
d. $128,000
126.
Given the following data:
Beginning raw materials inventory
$30,000
Materials purchased
65,000
Ending raw materials inventory
40,000
What is the amount of raw materials used?
a. $5,000
b. $55,000
c. $75,000
d. $30,000
127.
A company manufactured 50,000 units of a product at a cost of $450,000. It sold 45,000 units at $15 each.
The
gross profit is
a. $750,000
b. $240,000
c. $600,000
d. $270,000
128.
The following information is taken from the financial records of Gunner Manufacturing:
Cost of materials used
$45,000
Direct labor costs
48,000
Factory overhead
39,000
Work in process, beg.
18,000
Work in process, end.
28,000
What is cost of goods manufactured?
a. $178,000
b. $132,000
c. $122,000
d. $142,000
129.
Which of the following are reported on the income statement as part of cost of goods?
a.
administrative expenses
b.
period costs
c.
cost of goods manufactured
d.
operating expenses
130.
What is the purpose of the statement of cost of goods manufactured?
a.
to determine the ending materials inventory
b.
to determine the ending work in process inventory
c.
to determine the amounts transferred to finished goods
d.
all of these
131.
Costs on the income statement for both a merchandiser and a manufacturer would be
a.
operating expenses
b.
direct materials
c.
direct labor incurred
d.
cost of goods manufactured
132.
On the income statement of a manufacturing company, what replaces purchases in the cost of goods sold section
of
a retail company?
a.
finished goods
b.
cost of merchandise available
c.
cost of goods manufactured
d.
work in process
133.
Cost of goods sold for a manufacturer equals cost of goods manufactured plus
a.
beginning work in process inventory less ending work in process inventory
b.
ending work in process inventory less beginning work in process inventory
c.
beginning finished goods inventory less ending finished goods inventory
d.
ending finished goods inventory less beginning finished goods inventory
134.
Given the following data:
Work in process, beginning
Work in process, ending
Direct labor costs
Cost of goods manufactured
Factory overhead
Direct materials used is
a. $2,000
b. $4,000
c. $8,000
d. $14,000
135.
Cost of goods manufactured is equal to
a.
total manufacturing costs plus ending materials inventory less beginning materials inventory
b.
cost of goods sold plus beginning work in process inventory less ending work in process inventory
c.
total manufacturing costs plus ending work in process inventory less beginning work in process inventory
d.
total manufacturing costs plus beginning work in process inventory less ending work in process inventory
136.
Finished goods inventory is reported on the
a.
income statement as a period cost
b.
balance sheet as a long-term asset
c.
balance sheet as a current asset
d.
income statement as revenue
137.
Beginning work in process is equal to
a.
cost of goods manufactured plus ending work in process minus manufacturing costs incurred during
the
current period
b.
cost of goods manufactured minus ending work in process plus manufacturing costs incurred during
the
current period
c.
ending work in process plus manufacturing costs incurred during the current period
d.
manufacturing costs incurred during the current period minus ending work in process
138.
All of the following would be reported on the balance sheet as a current asset except
a.
factory overhead
b.
materials inventory
c.
finished goods inventory
d.
work in process inventory
139.
Smith Company reports the following information:
Cost of goods manufactured
$68,250
Direct materials used
27,000
Direct labor incurred
25,000
Work in process inventory, January 1
11,000
Factory overhead is 75% of the cost of direct labor. Work in process inventory on December 31, is
a. $16,250
b. $8,500
c. $18,750
d. $13,500
140.
At the beginning of the current year, the 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
a. $24,000
b. $44,000
c. $66,000
d. $36,000
141.
A company used $35,000 of direct materials, incurred $73,000 in direct labor cost, and had $114,000 in factory
overhead costs during the period. If beginning and ending work in process inventories were $28,000 and
$32,000,
respectively, the cost of goods manufactured was
a. $218,000
b. $226,000
c. $190,000
d. $222,000
142.
Cost of goods manufactured during the year is $240,000 work in process inventory on December 31 is $50,000.
Work in process inventory during the year decreased by 60%. Total manufacturing costs incurred are
a. $190,000
b. $165,000
c. $290,000
d. $315,000
143.
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. What are the total manufacturing
costs
incurred in the current year?
a. $291,500
b. $302,000
c. $275,750
d. $233,750
144.
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. What is the cost of goods manufactured?
a. $232,000
b. $302,000
c. $288,000
d. $190,000
145.
Work in process inventory increased by $20,000 during the current year. Cost of goods manufactured was
$180,000. Total manufacturing costs incurred are
a. $198,000
b. $160,000
c. $189,000
d. $200,000
146.
Which of the following will not be found on the balance sheet of a manufacturing company?
a.
cost of goods sold
b.
materials
c.
work in process
d.
finished goods
147.
A company sells goods for $150,000 that cost $54,000 to manufacture. Which statement is true?
a.
The company will recognize sales on the balance sheet of $150,000.
b.
The company will recognize $96,000 gross profit on the balance sheet.
c.
The company will decrease finished goods by $54,000.
d.
The company will increase finished goods by $54,000.
148.
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
a. $233,000
b. $225,600
c. $288,800
d. $240,400
149.
Managers used managerial information for all of the following except
a.
to evaluate the company’s stock performance
b.
to analyze the performance of a company’s operations
c.
to support long-term planning decisions
d.
to determine the cost of manufacturing a product
150.
Managerial accountants could prepare all of the following reports except
a.
a performance report identifying amounts of scrap
b.
a control report comparing direct material usage over time
c.
a sales report targeting monthly sales and potential bonuses
d.
an annual report for external regulators such as the SEC
151.
Which of the following would be least likely to be considered a managerial accounting report?
a.
a report to analyze potential efficiencies and savings for the purchase of new production equipment
b.
a schedule of total manufacturing costs incurred
c.
a statement of cost of goods manufactured
d.
a statement of stockholders’ equity
152.
The phases of the management process are listed below. Match each phase to the appropriate description.
Planning
Directing
Controlling
Improving
Decision making
a)
Used by managers for continuous improvement
b)
Managers must decide how to respond to unfavorable performances
c) Used by management to develop the organization’s objectives and goals
d)
Monitoring the operating results of implemented plans and comparing actual results to expected results
e)
Process by which managers run day–to-day operations
153. What is decision making? Who is responsible for decision making in a managerial situation?
154.
Differentiate between financial and managerial accounting, addressing such issues as users, nature of
information,
guidelines for preparation, timeliness and focus of reporting.
155. Differentiate between a line department and a staff department.
1.
Wheels
2.
Depreciation on worker’s tools
3.
Wages of assemblers
4.
Grease for wheel axles
157.
Identify the following costs as (a) prime cost, (b) conversion cost, or (c) both for a cake factory.
1.
Frosting
2.
Wages of the baker
3.
Sprinkles for the topping (considered an indirect material)
4.
Depreciation on oven
158.
Classify the following costs as direct, indirect, or neither:
a)
labor for machine maintenance
b)
factory equipment depreciation
c)
materials not traceable to specific products
d)
office equipment depreciation
e)
materials traceable to specific products
f)
insurance expired on administrative facilities
g)
product assembly labor incurred
h)
administrative office salaries
i)
salespersons’ salaries
j)
utilities on factory building
k)
utilities on administrative facilities
159. Differentiate between period and product costs, including examples of each type of cost.
160.
Differentiate between:
a)
direct materials versus indirect materials
b)
direct labor versus indirect labor
161.
Match each description to the appropriate term (a-d).
a)
direct materials
b)
selling and administrative expense
c)
factory overhead
d)
direct labor
(1)
rent expense on factory building
(2)
sales supplies used
(3)
factory supplies used
(4)
indirect materials used
(5)
wages of assembly line personnel
(6)
cost of primary material used to make product
(7)
depreciation on office equipment
(8)
rent on office facilities
(9)
insurance expired on factory equipment
(10)
utilities incurred in the office
(11)
advertising expense