Question 1

Assuming the cost of direct materials used is $1,500,000, compute the total manufacturing costs using the information below. $\begin{array}{lll}
\text { Raw materials inventory, January 1 } & \$ 30,000 \
\text { Raw materials inventory, December 31 } & 60,000 \
\text { Work in process, January 1 } & 27,000 \
\text { Work in process, December 31 } & 18,000 \
\text { Finished goods, January 1 } & 60,000 \
\text { Finished goods, December 31 } & 48,000\
\text { Raw materials purchases } & 1,500,000 \
\text { Direct labor } & 690,000 \
\text { Factory utilities } & 225,000 \
\text { Indirect labor } & 75,000 \
\text { Factory depreciation } & 500,000 \
\text { Operating expenses } & 630,000
\end{array}$
A)$2,990,000.
B)$2,981,000.
C)$2,690,000.
D)$3,620,000.

Accepted Answer

Total manufacturing costs include direct materials used, direct labor, and manufacturing overhead (factory utilities, indirect labor, and factory depreciation). Calculating: $1,500,000 (direct materials) + $690,000 (direct labor) + $225,000 (factory utilities) + $75,000 (indirect labor) + $500,000 (factory depreciation) = $2,990,000. Operating expenses are not included in manufacturing costs.

Question 2

The equivalent of finished goods inventory for a merchandising firm is referred to as
A)purchases.
B)cost of goods purchased.
C)merchandise inventory.
D)raw materials inventory.

Accepted Answer

Finished goods inventory is the final product of a manufacturing firm. Similarly, merchandise inventory is the final product of a merchandising firm, which includes products ready for sale and waiting on store shelves or in a warehouse. Therefore, the correct answer is merchandise inventory.

Question 3

Penner Company reported total manufacturing costs of $410,000, manufacturing overhead totaling $78,000, and direct materials totaling $96,000.How much is direct labor cost?
A)Cannot be determined from the information provided.
B)$584,000
C)$174,000
D)$236,000

Accepted Answer

Direct labor cost = Total manufacturing costs - Manufacturing overhead - Direct materials= $410,000 - $78,000 - $96,000= $236,000

Question 4

Wood Company has beginning work in process inventory of $128,000 and total manufacturing costs of $477,000.If cost of goods manufactured is $480,000, what is the cost of the ending work in process inventory?
A)$110,000.
B)$131,000.
C)$140,000.
D)$125,000.

Accepted Answer

The answer of Wood Company has beginning work in process...

Question 5

Given the following data for Mehring Company, compute (A) total manufacturing costs and (B) cost of goods manufactured: $\begin{array}{llll}
\text { Direct materials used } & \$ 230,000&\text { Beginning work IN} \
\text { process } & \$ 30,000\
\text { Direct labor } & 150,000 & \text { Ending work in process } & 15,000 \
\text { Manufacturing overhead } & 225,000 & \text { Beginning finished goods } & 38,000 \
\text { Operating expenses } & 263,000 & \text { Ending finished goods } & 23,000
\end{array}$

$\begin{array}{lll}&(A)&(B)\
\text { a. } & \$ 590,000 & \$ 620,000 \
\text { b. } & \$ 605,000 & \$ 590,000 \
\text { c. } & \$ 605,000 & \$ 620,000 \
\text { d. } & \$ 620,000 & \$ 635,000
\end{array}$

Accepted Answer

The answer of Given the following data for Mehring Company,...

Question 6

Samson Company reported total manufacturing costs of $300,000, manufacturing overhead totaling $52,000, and direct materials totaling $64,000.How much is direct labor cost?
A)Cannot be determined from the information provided.
B)$416,000
C)-$416,000
D)$184,000

Accepted Answer

Direct labor cost can be calculated by subtracting direct materials and manufacturing overhead from total manufacturing costs: $300,000 - $64,000 - $52,000 = $184,000.

Question 7

Which one of the following managerial accounting approaches attempts to allocate manufacturing overhead in a more meaningful fashion?
A)Balanced scorecard
B)Just-in-time inventory
C)Activity-based costing
D)Total quality management

Accepted Answer

Activity-based costing attempts to allocate manufacturing overhead in a more meaningful fashion by identifying and assigning costs to specific activities or processes, instead of using a broad allocation method. This approach provides a more accurate understanding of the cost of each product or service, which can help in making informed decisions.

Question 8

Which one of the following characteristics would likely be associated with a just-in-time inventory method?
A)Ending inventory of work in process that would allow several production runs
B)A backlog of inventory orders not yet shipped
C)Minimal finished goods inventory on hand
D)An understanding with customers that they may come to the showroom and select from inventory on hand

Accepted Answer

A just-in-time inventory method focuses on minimizing inventory levels to reduce waste and increase efficiency. Therefore, minimal finished goods inventory on hand would be a characteristic that would be associated with this method.

Question 9

How have many companies significantly lowered inventory levels and costs?
A)They use activity-based costing.
B)They utilize a balanced scorecard system.
C)They have a just-in-time method.
D)They focus on total quality management.

Accepted Answer

Just-in-time (JIT) method is a system of inventory management where materials, goods, and components are delivered right when they are needed for production, rather than being stored in warehouses. This system helps to significantly lower inventory levels and costs by eliminating the need for storing excess inventory, reducing warehouse/ storage costs, minimizing capital tied up in inventory, reducing the risk of inventory obsolescence or spoilage, and increasing efficiency in managing inventory.

Question 10

What is "balanced" in the balanced scorecard approach?
A)The number of products produced
B)The emphasis on financial and non-financial performance measurements
C)The amount of costs allocated to products
D)The number of defects found on each product

Accepted Answer

The balanced scorecard approach is all about balancing financial and non-financial performance measurement. It is not primarily focused on the number of products produced, the costs allocated to products, or the number of defects found on each product.

Question 11

Barton Company has beginning work in process inventory of $144,000 and total manufacturing costs of $686,000.If cost of goods manufactured is $640,000, what is the cost of the ending work in process inventory?
A)$170,000.
B)$198,000.
C)$210,000.
D)$190,000.

Accepted Answer

The answer of Barton Company has beginning work in process...

Question 12

What term describes all business processes associated with providing a product or service?
A)The manufacturing chain
B)The product chain
C)The supply chain
D)The value chain

Accepted Answer

The value chain refers to all the business processes associated with providing a product or service, from the initial design and development to the final delivery to the customer. The value chain includes activities such as procurement, production, marketing, sales, and customer service.

Question 13

Molina Company has beginning and ending work in process inventories of $130,000 and $145,000 respectively.If total manufacturing costs are $650,000, what is the total cost of goods manufactured?
A)$780,000.
B)$795,000.
C)$635,000.
D)$665,000.

Accepted Answer

The total cost of goods manufactured is calculated as: Beginning Work in Process Inventory + Total Manufacturing Costs - Ending Work in Process Inventory = $130,000 + $650,000 - $145,000 = $635,000.

Question 14

Given the following data for Harder Company, compute cost of goods manufactured: $\begin{array}{lrlr}
\text { Direct materials used } & \$ 120,000 & \text { Beginning work in process } & \$ 20,000 \
\text { Direct labor } & 200,000 & \text { Ending work in process } & 10,000 \
\text { Manufacturing overhead } & 150,000 & \text { Beginning finished goods } & 25,000 \
\text { Operating expenses } & 175,000 & \text { Ending finished goods } & 15,000
\end{array}$
A)$460,000
B)$470,000
C)$480,000
D)$490,000

Accepted Answer

The answer of Given the following data for Harder Company,...

Question 15

Assuming that the total manufacturing costs are $2,900,000, compute the cost of goods manufactured using the information below. $\begin{array}{lll}
\text { Raw materials inventory, January 1 } & \$ 30,000 \
\text { Raw materials inventory, December 31 } & 60,000 \
\text { Work in process, January 1 } & 27,000 \
\text { Work in process, December 31 } & 18,000 \
\text { Finished goods, January 1 } & 60,000 \
\text { Finished goods, December 31 } & 48,000\
\text { Raw materials purchases } & 1,500,000 \
\text { Direct labor } & 690,000 \
\text { Factory utilities } & 225,000 \
\text { Indirect labor } & 75,000 \
\text { Factory depreciation } & 500,000 \
\text { Operating expenses } & 630,000
\end{array}$
A)$2,888,000.
B)$2,891,000.
C)$2,909,000.
D)$2,912,000.

Accepted Answer

The cost of goods manufactured is calculated as: Total manufacturing costs ($2,900,000) + Beginning work in process ($27,000) - Ending work in process ($18,000) = $2,909,000.

Question 16

Costas Company has beginning and ending raw materials inventories of $64,000 and $80,000, respectively.If direct materials used were $290,000, what was the cost of raw materials purchased?
A)$290,000.
B)$310,000.
C)$274,000.
D)$306,000.

Accepted Answer

The cost of raw materials purchased can be calculated using the formula: Beginning Inventory + Purchases - Ending Inventory = Direct Materials Used. Plugging in the numbers: $64,000 + Purchases - $80,000 = $290,000. Solving for Purchases gives $306,000.

Question 17

Given the following data for Glennon Company, compute (A) total manufacturing costs and (B) costs of goods manufactured: $\begin{array}{lrlr}
\text { Direct materials used } & \$ 270,000 & \text { Beginning work in process } & \$ 40,000 \
\text { Direct labor } & 200,000 & \text { Ending work in process } & 20,000 \
\text { Manufacturing overhead } & 300,000 & \text { Beginning finished goods } & 50,000 \
\text { Operating expenses } & 350,000 & \text { Ending finished goods } & 30,000
\end{array}$

$\begin{array}{lll}&(A)&(B)\
\text { a. } & \$ 750,000 & \$ 790,000 \
\text { b. } & \$ 770,000 & \$ 750,000 \
\text { c. } & \$ 770,000 & \$ 790,000 \
\text { d. } & \$ 790,000 & \$ 810,000
\end{array}$

Accepted Answer

The answer of Given the following data for Glennon Company,...

Question 18

Gammil Company has beginning and ending raw materials inventories of $96,000 and $120,000, respectively.If direct materials used were $440,000, what was the cost of raw materials purchased?
A)$440,000.
B)$470,000.
C)$416,000.
D)$464,000.

Accepted Answer

The cost of raw materials purchased can be calculated using the formula: Beginning Inventory + Purchases - Ending Inventory = Direct Materials Used. Rearranging gives Purchases = Direct Materials Used + Ending Inventory - Beginning Inventory. So, $440,000 + $120,000 - $96,000 = $464,000.

Question 19

Assuming that the cost of goods manufactured is $2,960,000 compute the cost of goods sold using the following information. $\begin{array}{lr}
\text { Raw materials inventory, January 1 } & 30,000 \
\text { Raw materials inventory, December 31 } & 60,000 \
\text { Work in process, January 1 } & 27,000 \
\text { Work in process, December } 31 & 18,000 \
\text { Finished goods, January 1 } & 60,000 \
\text { Finished goods, December 31 } & 48,000 \
\text { Raw materials purchases } & 1,500,000\
\text { Direct labor } & 690,000 \
\text { Factory utilities } & 225,000 \
\text { Indirect labor } & 75,000 \
\text { Factory depreciation } & 500,000 \
\text { Operating expenses } & 630,000
\end{array}$
A)$2,969,000.
B)$2,912,000.
C)$2,948,000.
D)$2,972,000.

Accepted Answer

The answer of Assuming that the cost of goods manufactured...

Question 20

Which one of the following does not appear on the balance sheet of a manufacturing company?
A)Finished goods inventory
B)Work in process inventory
C)Cost of goods manufactured
D)Raw materials inventory

Accepted Answer

Cost of goods manufactured is an accounting calculation that represents the total cost of producing goods that are ready to be sold. It is not an inventory account that appears on the balance sheet. On the other hand, finished goods inventory, work in process inventory, and raw materials inventory are all inventory accounts that do appear on the balance sheet of a manufacturing company.

Quiz 1: Introduction to Financial Statements

The equivalent of finished goods inventory for a merchandising firm is referred to as

Penner Company reported total manufacturing costs of $410,000, manufacturing overhead totaling $78,000, and direct materials totaling $96,000.How much is direct labor cost?

Wood Company has beginning work in process inventory of $128,000 and total manufacturing costs of $477,000.If cost of goods manufactured is $480,000, what is the cost of the ending work in process inventory?

Samson Company reported total manufacturing costs of $300,000, manufacturing overhead totaling $52,000, and direct materials totaling $64,000.How much is direct labor cost?

Which one of the following managerial accounting approaches attempts to allocate manufacturing overhead in a more meaningful fashion?

Which one of the following characteristics would likely be associated with a just-in-time inventory method?

How have many companies significantly lowered inventory levels and costs?

What is "balanced" in the balanced scorecard approach?

Barton Company has beginning work in process inventory of $144,000 and total manufacturing costs of $686,000.If cost of goods manufactured is $640,000, what is the cost of the ending work in process inventory?

What term describes all business processes associated with providing a product or service?

Molina Company has beginning and ending work in process inventories of $130,000 and $145,000 respectively.If total manufacturing costs are $650,000, what is the total cost of goods manufactured?

Costas Company has beginning and ending raw materials inventories of $64,000 and $80,000, respectively.If direct materials used were $290,000, what was the cost of raw materials purchased?

Gammil Company has beginning and ending raw materials inventories of $96,000 and $120,000, respectively.If direct materials used were $440,000, what was the cost of raw materials purchased?

Which one of the following does not appear on the balance sheet of a manufacturing company?