Question 1

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.

Accepted Answer

The correct statement is C) The company will decrease finished goods by $54,000. This is because when goods that cost $54,000 to manufacture are sold, the cost of these goods is removed from the inventory account (finished goods) and recognized as cost of goods sold on the income statement, thus decreasing the finished goods inventory by $54,000.

Question 2

Match each description to the appropriate term (a-d). 
a) Direct materials 
b) Selling and administrative expense 
c) Factory overhead 
d) Direct labor

Accepted Answer

The answer of Match each description to the appropriate term...

Question 3

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

Accepted Answer

Managerial accountants are responsible for preparing internal reports for management, not external reports for regulators like the SEC. External reporting is typically handled by financial accountants.

Question 4

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

Accepted Answer

The answer of A company used $35,000 of direct materials,...

Question 5

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

Accepted Answer

The answer of The phases of the management process are...

Question 6

Differentiate between: 
a) direct materials versus indirect materials 
b) direct labor versus indirect labor

Accepted Answer

The answer of Differentiate between: 
a) direct materials versus indirect...

Question 7

Identify the following costs as (a) direct materials, (b) direct labor, or (c) factory overhead for a lawn mower manufacturer. 
 
1. _____ Wheels 
2. _____ Depreciation on worker's tools 
3. _____ Wages of assemblers 
4. _____ Grease for wheel axles

Accepted Answer

The answer of Identify the following costs as (a) direct...

Question 8

Classify the following costs as direct, indirect, or neither:

Accepted Answer

The answer of Classify the following costs as direct, indirect,...

Question 9

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

Accepted Answer

The answer of Work in process inventory increased by $20,000...

Question 10

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

Accepted Answer

Cost of goods sold is not a balance sheet item. It is an income statement item that represents the cost of producing and selling products during a period of time. Materials, work in process, and finished goods, on the other hand, are all items that can be found on the balance sheet of a manufacturing company, as they represent inventory and production stages of the manufacturing process.

Question 11

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

Accepted Answer

Cost of goods manufactured = cost of goods sold + ending finished goods inventory - beginning finished goods inventory
Cost of goods manufactured = $233,000 + $24,200 - $31,600
Cost of goods manufactured = $225,600

Question 12

Identify the following costs as a (a) Product Cost or (b) Period Cost for a cake factory. 
 
1. _____ Frosting 
2. _____ Baker's wages 
3. _____ Advertising fees 
4. _____ Transportation out

Accepted Answer

The answer of Identify the following costs as a (a)...

Question 13

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

Accepted Answer

The answer of Work in process inventory on December 31...

Question 14

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

Accepted Answer

Managerial information is used by managers to analyze the performance of a company's operations, support long-term planning decisions, and determine the cost of manufacturing a product. However, it is not used to evaluate the company's stock performance, as this is typically done by investors and analysts.

Question 15

The Putney Company reports the following information:  
Compute: 
a) product costs 
b) period costs

Accepted Answer

The answer of The Putney Company reports the following information:...

Question 16

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

Accepted Answer

The answer of Cost of goods manufactured during the year...

Question 17

Differentiate between financial and managerial accounting, addressing such issues as users, nature of information, guidelines for preparation, timeliness and focus of reporting.

Accepted Answer

The answer of Differentiate between financial and managerial accounting, addressing...

Question 18

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

Accepted Answer

The answer of Identify the following costs as (a) prime...

Question 19

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

Accepted Answer

Using the formula for cost of goods manufactured: 
Beginning WIP inventory + Total manufacturing costs incurred - Ending WIP inventory = Cost of goods manufactured 
$42,000 (Beginning WIP) + $260,000 (Total manufacturing costs incurred) - ($42,000 x 0.6 = $25,200) (Ending WIP) = $288,800 
Therefore, the cost of goods manufactured is $288,000, which corresponds to choice C.

Question 20

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

Accepted Answer

A statement of stockholders' equity is a financial accounting report, not a managerial accounting report. Managerial accounting reports focus on internal decision-making within a company, whereas financial accounting reports are prepared for external parties, such as investors and creditors. Choices A, B, and C all relate to managerial accounting as they involve analyzing costs and expenses related to production.

Quiz 1: Introduction to Managerial Accounting

A company sells goods for $150,000 that cost $54,000 to manufacture. Which statement is true?

Match each description to the appropriate term (a-d). a) Direct materials b) Selling and administrative expense c) Factory overhead d) Direct labor

Managerial accountants could prepare all of the following reports except

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

Differentiate between: a) direct materials versus indirect materials b) direct labor versus indirect labor

Identify the following costs as (a) direct materials, (b) direct labor, or (c) factory overhead for a lawn mower manufacturer. 1. ___ Wheels 2. _ Depreciation on worker's tools 3. _ Wages of assemblers 4. ___ Grease for wheel axles

Classify the following costs as direct, indirect, or neither:

Work in process inventory increased by $20,000 during the current year. Cost of goods manufactured was $180,000. Total manufacturing costs incurred are

Which of the following will not be found on the balance sheet of a manufacturing company?

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

Identify the following costs as a (a) Product Cost or (b) Period Cost for a cake factory. 1. ___ Frosting 2. _ Baker's wages 3. _ Advertising fees 4. ___ Transportation out

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?

Managers used managerial information for all of the following except

The Putney Company reports the following information: Compute: a) product costs b) period costs

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

Differentiate between financial and managerial accounting, addressing such issues as users, nature of information, guidelines for preparation, timeliness and focus of reporting.

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

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?

Which of the following would be least likely to be considered a managerial accounting report?

Quiz 1: Introduction to Managerial Accounting

A company sells goods for $150,000 that cost $54,000 to manufacture. Which statement is true?

Match each description to the appropriate term (a-d). a) Direct materials b) Selling and administrative expense c) Factory overhead d) Direct labor

Managerial accountants could prepare all of the following reports except

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

Differentiate between: a) direct materials versus indirect materials b) direct labor versus indirect labor

Identify the following costs as (a) direct materials, (b) direct labor, or (c) factory overhead for a lawn mower manufacturer. 1. _____ Wheels 2. _____ Depreciation on worker's tools 3. _____ Wages of assemblers 4. _____ Grease for wheel axles

Classify the following costs as direct, indirect, or neither:

Work in process inventory increased by $20,000 during the current year. Cost of goods manufactured was $180,000. Total manufacturing costs incurred are

Which of the following will not be found on the balance sheet of a manufacturing company?

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

Identify the following costs as a (a) Product Cost or (b) Period Cost for a cake factory. 1. _____ Frosting 2. _____ Baker's wages 3. _____ Advertising fees 4. _____ Transportation out

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?

Managers used managerial information for all of the following except

The Putney Company reports the following information: Compute: a) product costs b) period costs

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

Differentiate between financial and managerial accounting, addressing such issues as users, nature of information, guidelines for preparation, timeliness and focus of reporting.

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

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?

Which of the following would be least likely to be considered a managerial accounting report?

Identify the following costs as (a) direct materials, (b) direct labor, or (c) factory overhead for a lawn mower manufacturer. 1. ___ Wheels 2. _ Depreciation on worker's tools 3. _ Wages of assemblers 4. ___ Grease for wheel axles

Identify the following costs as a (a) Product Cost or (b) Period Cost for a cake factory. 1. ___ Frosting 2. _ Baker's wages 3. _ Advertising fees 4. ___ Transportation out