Exam 16: Introduction to Management Accounting

Excellent Company sells accounting textbooks. The following information summarizes Excellent's operating activities for 2012: Nerchendise inventory, Janury 1,2012 \ 10,000 Nerchendise inventory, Decenber 31,2012 \ 7,000 Purcheses \ 95,000 Selling and Adrminitrative Expenses \ 65,000 Sales Reverue \ 180,000 - Required: Prepare an income statement for the year ended December 31, 2012. Please use the format provided below: Sales revenue Cost of goods sold Beginning inventory Purchases Cost of goods available for sale Ending inventory Cost of goods sold Gross profit Selling and administrative expenses Net income/(loss)

The accountant for Spiral Supplies deliberately post-dated a check to pay for business expenses in order to record a higher net income for the company. As long as the amount was not material, this would not be considered unethical behavior.

T-accounts for the inventory accounts of the Arturo Manufacturing Company are shown below. This data represents transactions for the year of 2012. - Based on the data shown here, what was the amount of the cost of goods manufactured?

Harrison Company reports the following cost information for August: Cost of goods manufactured \ 135,800 Finished goods inventory, Aug. 1 30,200 Finished goods inventory, Aug. 31 35,300 Work in process inventory, Aug. 1 22,500 Work in process inventory, Aug. 31 18,500 Direct materials used 25,300 - What is cost of goods sold for August?

Which of the following is a characteristic of a service company?

Management is accountable to its suppliers and vendors in which of the following ways?

Which of the following applies to goods that are produced by a manufacturing company and ready to sell?

Which of the following statements is INCORRECT?

Charleston Company was nearing year-end and the CEO wanted to report a high level of inventory on the balance sheet. An order of raw materials was planned for early the next year, but the CEO asked the purchasing manager to accelerate the shipment so that it would arrive before the end of the year. Because this action was taken deliberately to affect the financial results of the company, it would be considered unethical.

Accounting, legal and administrative costs are included in manufacturing overhead.

South State Company used $71,000 of direct materials and incurred $37,000 of direct labor costs during 2012. Indirect labor amounted to $2,700 while indirect materials used totaled $1,600. Other operating costs pertaining to the factory included utilities of $3,100; maintenance of $4,500; repairs of $1,800; depreciation of $7,900; and property taxes of $2,600. There was no beginning or ending finished goods inventory, but work in process inventory began the year with a $5,500 balance and ended the year with a $7,500 balance. Required: Prepare a schedule of cost of goods manufactured for South State Company using the format below. COST OF GOODS MFGD Beginning work in process Direct materials used: Direct labor Manufacturing overhead: Indirect labor Indirect materials Utilities Maintenance Repairs Depreciation Property taxes Total manufacturing overhead Total mfg costs incurred Total mfg costs to account for Ending work in process Cost of goods manufactured

GAAP requires companies to treat product costs such as factory overhead as an asset until the product is sold.

Advertising and marketing costs are included in manufacturing overhead.

Repair and maintenance costs of vehicles used to deliver products to the customers are product costs.

Evanston Manufacturing Company reported the following information for the year 2012: Number of units produced 4,800 Number of units sold 5,250 Cost of goods manufactured $460,800 Cost of goods sold $488,250 Sales Revenue $1,260,000 Gross Profit $771,750 Operating expense $724,900 What was the unit product cost (cost to make one unit of product)? (Please round to the nearest cent.)

Manufacturing overhead includes indirect costs, such as insurance and depreciation on the factory building.

Which of the following applies to the raw materials used by a manufacturing company?

The following information pertains to Bright Toy Company's operating activities for 2012. The company sells light box toys and sold 10,000 units in 2012. Purchases \ 126,000 Selling and Administrative Expenses 90,000 Merchandise inventory, 1/1/2012 14,000 Merchandise inventory, 12/31/2012 10,000 Sales Revenue 250,000 - What is the cost of goods sold for 2012?

The following information pertains to Bright Toy Company's operating activities for 2012. The company sells light box toys and sold 10,000 units in 2012. Purchases \ 126,000 Selling and Administrative Expenses 90,000 Merchandise inventory, 1/1/2012 14,000 Merchandise inventory, 12/31/2012 10,000 Sales Revenue 250,000 - What is the cost of goods available for sale for 2012?

Which of the following events would NOT be considered unethical under IMA standards?