Question 1

Haggan Manufacturing,Inc.provided the following information for the year:
 $$\begin{array} { |l | r | } 
\hline \text { Purchases - Direct Materials } & \$ 270,000 \
\hline \text { Plant Utilities and Insurance } & 202,500 \
\hline \text { Indirect Materials } & 35,250 \
\hline \text { Indirect Labor } & 14,250 \
\hline \text { Ending Balance - Work-in-Process Inventory } &42,000\
\hline \text { Ending Balance - Direct Materials } & 45,000  \
\hline \text { Direct Labor } &  352,500 \
\hline \text { Depreciation on Factory Plant and Equipment } &18,000 \
\hline \text { Beginning Balance - Work-in-Process Inventory } &  18,000\
\hline \text { Beginning Balance - Direct Materials } &  63,000\
\hline
\end{array}$$ Required: Prepare a schedule of the cost of goods manufactured using the following format:
 \[\begin{array} {| l | l | l | l |} 
\hline  { \text { Srhedule of Cast af Gadds Manufartured } } \
\hline \text { Beginning Work-in-Process Inventory } &\quad\quad &\quad\quad &\quad\quad \
\hline \text { Direct Materials Used: } & & & \
\hline \text { Beginning Direct Materials } & & & \
\hline \text { Purchases of Direct Materials } & & & \
\hline \text { Direct Materials Available for Use } & & & \
\hline \text { Ending Direct Materials } & & & \
\hline \text { Direct Materials Used } & & & \
\hline \text { Direct Labor } & & & \
\hline \text { Manufacturing Overhead: } & & & \
\hline \text { Indirect Materials } & & & \
\hline \text { Indirect Labor } & & & \
\hline \text { Depreciation-Plant and Equipment } & & & \
\hline \text { Plant Utilities and Insurance } & & & \
\hline \text { Total Manufacturing Overhead } & & & \
\hline \text { Total Manufacturing Costs Incurred } & & & \
\text { During the Year } & & & \
\hline \text { Total Manufacturing Costs to Account } & & & \
\hline \text { For } & & & \
\hline \text { Ending Work-in-Process Inventory } & & & \
\hline \text { Cost of Goods Manufactured } & & &\
\hline 
\end{array}\]

Accepted Answer

The answer of Haggan Manufacturing,Inc.provided the following information for the...

Question 2

A manufacturer produced 7,500 total units.The cost of goods manufactured is $88,000 and the cost of goods sold is $71,000.The unit product cost is $9.47.

Accepted Answer

Cost of goods manufactured / Total units produced = Unit product cost
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Question 3

Grant's Ironhorse Company manufactures model railroad cars.At the end of October,2019 the accounting records showed the following:
 $$\begin{array} { | l | r | r | } 
\hline \text { Inventories: } & \text { Beginning } & { \text { Ending } } \
\hline \text { Direct Materials } & \$ 10,000 & \$ 5,000 \
\hline \text { Work-in-Process } & 15,000 & 20,000 \
\hline \text { Finished Goods } & 0 & 5,800 \
\hline \text { Other Information: } & & \
\hline \text { Direct Materials Purchases } & & 60,000 \
\hline \text { Plant maintenance services } & & 31,500 \
\hline \text { Plant supervisor's salary } & & 12,700 \
\hline \text { Sales salaries } & & 3,100 \
\hline \text { Delivery costs } & & 236,000 \
\hline \text { Sales revenue } & & 10,500 \
\hline \text { Utilities for plant } & & 23,000 \
\hline \text { Rent on plant } & & 8,000 \
\hline \text { Advertising } & & 30,000 \
\hline \text { Direct labor } & & \
\hline
\end{array}$$ (a)Prepare a schedule of cost of goods manufactured for Grant's Ironhorse Company and
(b)Prepare an income statement for Grant's Ironhorse Company for the year ended October 31,2019

Accepted Answer

The answer of Grant's Ironhorse Company manufactures model railroad cars.At...

Question 4

________ is a philosophy of continuous improvement of products and processes.

Accepted Answer

Total Quality Management (TQM) is a philosophy that focuses on the continuous improvement of products and processes through an organization's commitment to customer satisfaction, employee empowerment, and leadership involvement. TQM involves identifying and eliminating defects or errors in products or services, and continuously striving for enhanced quality in all aspects of the organization's operations. JIT, ERP, and SCM are all management systems or approaches, but they do not necessarily have the same level of emphasis on quality improvement as TQM does.

Question 5

Which of the following is TRUE of service companies?

Accepted Answer

Service companies provide intangible services rather than physical products, so they do not carry inventories of products for sale.

Question 6

Unlike merchandising companies,income statements of service companies include cost of goods sold as a line item.

Accepted Answer

Service companies do not sell tangible goods, so they do not have a cost of goods sold. Instead, their expenses are categorized as operating expenses or costs directly related to providing services to their clients.

Question 7

An Enterprise Resource Planning system (ERP)________.

Accepted Answer

An ERP system integrates all worldwide functions, departments, and data of a company into a single system. It is not limited to just manufacturing companies and can be implemented in service companies as well. Total Quality Management is not a requirement for implementing an ERP system. Choice A defines a Just-In-Time system, which is different from an ERP system.

Question 8

Unit product costs can be used to measure operating income and determine the cost of Finished Goods Inventory.

Accepted Answer

Unit product costs are calculated by dividing the total cost of production by the number of units produced. This cost includes direct materials, direct labor, and manufacturing overhead. By using unit product costs, a company can determine the total cost of goods sold, as well as the cost of finished goods inventory. This information can be used to measure operating income and make strategic decisions about pricing, production, and inventory management.

Question 9

Hernando Manufacturing,Inc.reported the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Number of Units Produced } & 152,000 \
\hline \text { Number of Units Sold } & 62,000 \
\hline \text { Cost of Goods Manufactured } & \$ 268,000 \
\hline \text { Cost of Goods Sold } & 52,900 \
\hline \text { Sales Revenue } & 130,000 \
\hline \text { Gross Profit } & 72,940 \
\hline \text { Operating Expense } & 727,000 \
\hline
\end{array}$$ What was the unit product cost? (Round your answer to the nearest cent.)

Accepted Answer

The answer of Hernando Manufacturing,Inc.reported the following information for the...

Question 10

The following information has been provided by New Age,Inc.: $$\begin{array} { | l | r | } 
\hline \text { Direct Labor } & \$ 25,100 \
\hline \text { Direct Materials Used } & 11,000 \
\hline \text { Direct Materials Purchased } & 16,710 \
\hline \text { Cost of Goods Manufactured } & 49,000 \
\hline \text { Ending Work-in-Process Inventory } & 11,200 \
\hline \text { Corporate Headquarters' Property Taxes } & 1500 \
\hline \text { Manufacturing Overhead } & 19,350 \
\hline
\end{array}$$ Calculate the beginning balance of the Work-in-Process Inventory account.

Accepted Answer

To calculate the beginning balance of the Work-in-Process Inventory, we use the formula: Beginning Work-in-Process Inventory = Cost of Goods Manufactured - Direct Materials Used - Direct Labor - Manufacturing Overhead + Ending Work-in-Process Inventory. Plugging in the given values: $49,000 - $11,000 - $25,100 - $19,350 + $11,200 = $4,750.

Question 11

Which of the following is a philosophy designed to integrate all organizational areas in order to provide customers with superior products and services,while meeting organizational goals throughout the value chain?

Accepted Answer

Total Quality Management (TQM) is a philosophy that emphasizes continuous improvement and integration of all organizational areas to provide customers with superior products and services while meeting organizational goals throughout the value chain. It involves everyone in the organization working together to improve processes, products, and services. SCM, JIT, and ERP are all important tools or strategies that can be used as part of TQM, but they are not the overarching philosophy itself.

Question 12

Which of the following is TRUE of Just-in-Time (JIT)Management?

Accepted Answer

JIT management is a system in which the company produces products only after receiving an order. It aims to minimize inventory costs by reducing surplus inventory and promoting efficient production processes. Option A is incorrect because JIT management aims to minimize storage costs. Option C is incorrect because JIT management aims to reduce surplus inventory, not promote it. Option D is incorrect because JIT management does not require surplus inventory of finished goods, as it aims to produce goods just in time for delivery.

Question 13

Velasco Productions has provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Direct Labor } & \$ 150,000 \
\hline \text { Beginning Work-in-Process Inventory } & 63,000 \
\hline \text { Direct Materials Used } & 269,000 \
\hline \text { Ending Work-in-Process Inventory } & 52,900 \
\hline \text { Manufacturing Overhead } & 135,000 \
\hline
\end{array}$$ During the year,Velasco produced 71,220 units of product.Calculate the unit product cost.(Round your answer to the nearest cent.)

Accepted Answer

The unit product cost is calculated by dividing the total manufacturing costs by the number of units produced. The total manufacturing costs are the sum of direct labor, direct materials used, manufacturing overhead, and the change in work-in-process inventory. The change in work-in-process inventory is calculated by subtracting the beginning work-in-process inventory from the ending work-in-process inventory.In this case, the total manufacturing costs are $150,000 + $269,000 + $135,000 + ($52,900 - $63,000) = $593,900. The number of units produced is 71,220. Therefore, the unit product cost is $593,900 / 71,220 = $7.92 (rounded to the nearest cent).

Question 14

What is Total Quality Management (TQM)?

Accepted Answer

Total Quality Management (TQM) is a philosophy, approach, or management method of continuous improvement and customer satisfaction. It focuses on meeting or exceeding customer expectations and maximizing customer satisfaction by providing high-quality products and services. TQM involves all employees of an organization, from top management down to the frontline workers, in the process of quality improvement.

Question 15

Doggie Delights manufactures its own brand of pet toys.At the end of June,2019 the accounting records showed the following:
 $$\begin{array} { | l | r | r | } 
\hline \text { Inventories: } & \text { Beginning } &{ \text { Ending } } \
\hline \text { Direct Materials } & \$ 14,200 & \$ 9,600 \
\hline \text { Work-in-Process } & 0 & 3,600 \
\hline \text { Finished Goods } & 0 & 6,800 \
\hline \text { Other Information: } & & \
\hline \text { Direct materials purchases } & & 40,000 \
\hline \text { Plant janitorial services } & & 4,200 \
\hline \text { Sales salaries } & & 6,000 \
\hline \text { Delivery costs } & & 2,900 \
\hline \text { Sales revenue } & & 206,000 \
\hline \text { Utilities for plant } & & 10,200 \
\hline \text { Rent on plant } & & 27,000 \
\hline \text { Customer service hotline costs } && 3,000 \
\hline \text { Direct labor } & & 29,000 \
\hline
\end{array}$$ (a)Prepare a schedule of cost of goods manufactured for Doggie Delights and
(b)Prepare an income statement for Doggie Delights for the year ended June 30,2019

Accepted Answer

The answer of Doggie Delights manufactures its own brand of...

Question 16

Which of the following correctly describes Just-in-Time (JIT)Management?

Accepted Answer

The answer of Which of the following correctly describes Just-in-Time...

Question 17

The income statement of a service company will most likely include ________.

Accepted Answer

A service company does not produce or sell goods, thus it will not have costs associated with materials or manufacturing overhead. However, it will likely have salaries expense associated with its employees.

Question 18

ERP systems can integrate all of a company's functions,departments,and data into a single system.

Accepted Answer

ERP systems are designed to integrate all aspects of a company's operations, including procurement, production, sales, and finance, into a single database or software system. This integration allows for greater efficiency, collaboration, and visibility across departments, leading to improved decision-making and business performance.

Question 19

How does a manufacturing company calculate unit product cost? Why do managers need to know the unit product cost?

Accepted Answer

The answer of How does a manufacturing company calculate unit...

Question 20

The entire sequence of activities that add value to a company's products and services is called ________.

Accepted Answer

The value chain encompasses all of the activities that contribute value to a company's products and services, including research and development, production, marketing, and distribution. The planning process and TQM production chain are specific components of the value chain, while Enterprise Resource Planning refers to a specific system for managing a company's resources.

Quiz 18: Introduction to Managerial Accounting