Exam 1: Introduction to Managerial Accounting

Since there are few rules to restrict how an organization chooses to arrange its own internal data for decision making, managerial accounting provides ample opportunity for developing business strategies.

A product cost is

Davis Manufacturing Company had the following data: Collections on account were $625,000. Cost of goods sold was 68% of sales. Direct materials purchased amounted to $90,000. Factory overhead was 300% of the cost of direct labor. Compute: (a) Sales revenue (all sales were on account) (b) Cost of goods sold (c) Cost of goods manufactured (d) Direct labor used (e) Direct materials incurred (f) Factory overhead incurred

An example of a period cost is

Period costs include direct materials and direct labor.

SASB was organized to develop accounting standards that help companies report decision-useful sustainability information to external financial statement users.

Conversion costs are the combination of direct labor, direct material, and factory overhead costs.

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

What term is used to describe the process of monitoring operating results and comparing actual results with the expected results?

Sustainability is the practice of operating a business to maximize profits while attempting to preserve the environment, economy, and needs of future generations.

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

Planning is the process of developing the company's objectives or goals and translating these objectives into courses of action.

The cost of a manufactured product generally consists of which of the following costs?

Conversion costs are

Taylor Industries had a fire and some of its accounting records were destroyed.  Available information is presented below for the year ended December 31. Additional information: Factory overhead is 150% of direct labor cost. Finished goods inventory decreased by $18,000 during the year. Work in process inventory increased by $12,000 during the year. Calculate: (a) Materials inventory, January 1 (b) Direct labor cost (c) Factory overhead incurred (d) Cost of goods sold

Goods that are partially completed by a manufacturer are

For an automotive repair shop, the wages of mechanics would be classified as direct labor cost.

Watson Company has the following data: Calculate the amount of direct materials used.

Which of the following is an example of direct labor cost for a cell phone manufacturer?

Goods that are partway through the manufacturing process, but not yet complete, are referred to as materials inventory.