Exam 1: Managerial Accounting Concepts and Principles

The following information relates to the manufacturing operations of the Abbra Publishing Company for the year: Beginning Ending Raw materials inventory $ 547,000 $ 610.l000 The raw materials used in manufacturing during the year totaled $1,018,000. Raw materials purchased during the year amount to:

Indirect costs cannot be easily and cost-beneficially traced to a single cost object.

Products that are in the process of being manufactured but are not yet complete are called:

Current information for the Stellar Corporation follows: Beginning work in process inventory \ 17,900 Ending work in process inventory 19,300 Direct materials 147,000 Direct labor 85,000 Total factory overhead 63,100 Stellar Corporation's Cost of Goods Manufactured for the year is:

Total quality management (TQM) focuses on quality improvement and applies this standard to all aspects of business activities.

Costs that are capitalized as inventory when they are incurred are called:

________ is an activity that provides financial and nonfinancial information to an organization's managers and other internal decision makers.

An employee devises a payroll scheme that costs the employer $150. The employer discovers the fraud but decides not to confront the employee since the amount of the fraud is small. Discuss why this course of action is not advisable.

The schedule of cost of goods manufactured is divided into four parts consisting of all of the following except:

Manufacturing costs other than direct materials and direct labor, and are not readily traceable to specific units or batches of production are called:

A ________ system means that a company acquires or produces inventory only when needed.

Although direct labor and raw materials costs are treated as manufacturing costs and therefore make up part of the finished goods inventory cost, factory overhead is charged to expense as it is incurred because it is a period cost.

Both financial and managerial accounting affect user's decisions and actions.

The management concept of customer orientation encourages a company to set up its production system to produce large quantities of the same product for all customers.

Total variable costs change in proportion to changes in the volume of activity.

The raw materials inventory turnover is raw materials purchased divided by the average raw materials inventory.

Mustang Corporation has accumulated the following accounting data for the month of April: Finished goods inventory, January 1 ………. $3,200 Finished goods inventory, December 31 …... 4,000 Total cost of goods sold ……………………. 14,200 The cost of goods sold for the year is:

Raw materials inventory should not include indirect materials.

Product costs are capitalized as inventory on the balance sheet and period costs are expensed on the income statement.

Current information for the Healey Company follows: Beginning raw materials inventory \ 15,200 Raw material purchases 60,000 Ending raw materials inventory 16,600 m Beginning work in process inventory 22,400 Ending work in process inventory 28,000 Direct labor 42,800 Total factory overhead 30,000 All raw materials used were traceable to specific units of product. Healey Company's Cost of Goods Manufactured for the year is: