Question 1

Barricades Corporation provided the following information for the year 2015:   What was the amount of direct materials used in production during 2015?

Accepted Answer

A) $360,000 
B) $504,000 
C) $384,000 
D) $328,000 
A) $360,000 
B) $504,000 
C) $384,000 
D) $328,000 C

Question 2

If Royal Ltd. purchases each unit of product X for $100 and can sell it in the market for $135, the selling price of the product for Royal would be $100.

Accepted Answer

A) True 
 B)False  False

Question 3

Jasper Inc. reports the following cost information for March:   What is the cost of goods sold for March?

Accepted Answer

A) $83,420 
B) $73,150 
C) $76,850 
D) $82,150 
A) $83,420 
B) $73,150 
C) $76,850 
D) $82,150 C

Question 4

Which of the following will most likely be considered an indirect material cost for a bakery?

Accepted Answer

A) Spices 
B) Flour 
C) Milk 
D) Eggs 
A) Spices 
B) Flour 
C) Milk 
D) Eggs

Question 5

Management accounting information of a company is primarily used by:

Accepted Answer

A) its customers to understand the pricing of the product. 
B) its creditors to understand the credibility of the business. 
C) its employees to plan and control operations. 
D) its investors to make their investment decisions. 
A) its customers to understand the pricing of the product. 
B) its creditors to understand the credibility of the business. 
C) its employees to plan and control operations. 
D) its investors to make their investment decisions.

Question 6

Which of the following represents the combined sum of direct labor and manufacturing overhead?

Accepted Answer

A) Conversion costs 
B) Period costs 
C) Prime costs 
D) Fixed costs 
A) Conversion costs 
B) Period costs 
C) Prime costs 
D) Fixed costs

Question 7

South State Company used $71,000 of direct materials and incurred $37,000 of direct labor costs during 2015. 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. How much is the cost of goods manufactured?

Accepted Answer

A) $124,700 
B) $130,200 
C) $137,700 
D) $132,200 
A) $124,700 
B) $130,200 
C) $137,700 
D) $132,200

Question 8

Which of the following is true of finished goods inventory?

Accepted Answer

A) Finished Goods Inventory is an account used by a manufacturer and includes completed goods that have not yet been sold. 
B) Finished Goods Inventory is an account used by a merchandiser and includes completed goods that have not yet been sold. 
C) Finished Goods Inventory is an account used by service companies in lieu of raw materials inventory. 
D) Finished Goods Inventory is an account used by a manufacturer in lieu of raw materials inventory. 
A) Finished Goods Inventory is an account used by a manufacturer and includes completed goods that have not yet been sold. 
B) Finished Goods Inventory is an account used by a merchandiser and includes completed goods that have not yet been sold. 
C) Finished Goods Inventory is an account used by service companies in lieu of raw materials inventory. 
D) Finished Goods Inventory is an account used by a manufacturer in lieu of raw materials inventory.

Question 9

What is total quality management (TQM)?

Accepted Answer

A) a philosophy of supplying customers with superior products and services 
B) an exchange of information with suppliers and customers to create efficient and effective processes 
C) a software system that integrates a company's functions, departments and data into a single system 
D) a system which speeds the transformation of raw materials into finished products 
A) a philosophy of supplying customers with superior products and services 
B) an exchange of information with suppliers and customers to create efficient and effective processes 
C) a software system that integrates a company's functions, departments and data into a single system 
D) a system which speeds the transformation of raw materials into finished products

Question 10

Product costs, such as direct materials, are expensed in the period they were paid.

Accepted Answer

A) True 
 B)False

Question 11

Managerial accounting focuses on providing information for internal planning and control.

Accepted Answer

A) True 
 B)False

Question 12

Opal Company used $213,000 of direct materials and incurred $111,000 of direct labor costs during 2015. Indirect labor amounted to $8,100 while indirect materials used totaled $4,800. Other operating costs pertaining to the factory included utilities of $9,300; maintenance of $13,500; repairs of $5,400; depreciation of $23,700; and property taxes of $7,800. There was no beginning or ending finished goods inventory. The Work-in-Process Inventory account reflected a balance of $16,500 at the beginning of the period and $22,500 at the end of the period.
Required: Prepare a schedule of cost of goods manufactured for Opal Company using the format below.
COST OF GOODS MFGD

Accepted Answer

The answer of Opal Company used $213,000 of direct materials...

Question 13

For external reporting purposes, GAAP requires companies to treat period costs as assets.

Accepted Answer

A) True 
 B)False

Question 14

Dreams Manufacturing Company provided the following information for the year 2015:   Required: Prepare a statement of the cost of goods manufactured using the following format:

Accepted Answer

The answer of Dreams Manufacturing Company provided the following information...

Question 15

For a manufacturing business, which of the following would be considered a product cost?

Accepted Answer

A) Research and development 
B) Property taxes on the factory 
C) Advertising 
D) Delivery costs 
A) Research and development 
B) Property taxes on the factory 
C) Advertising 
D) Delivery costs

Question 16

Which of the following represents the combined sum of direct materials and direct labor?

Accepted Answer

A) Conversion costs 
B) Period costs 
C) Prime costs 
D) Fixed costs 
A) Conversion costs 
B) Period costs 
C) Prime costs 
D) Fixed costs

Question 17

Wages and benefits of factory managers are considered as product costs.

Accepted Answer

A) True 
 B)False

Question 18

Wages and benefits of assembly line workers are included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 19

Fireox Company's selected cost data for 2015 are shown below:   Assuming manufacturing overhead costs of $27,850, what is the amount of direct labor incurred by Fireox Company in 2015?

Accepted Answer

A) $63,120 
B) $190,430 
C) $57,580 
D) $79,690 
A) $63,120 
B) $190,430 
C) $57,580 
D) $79,690

Question 20

Merchandiser's inventory consists of raw materials inventory, work-in-process inventory, and finished goods inventory.

Accepted Answer

A) True 
 B)False

Exam 18: Introduction to Managerial Accounting

Barricades Corporation provided the following information for the year 2015: What was the amount of direct materials used in production during 2015?

If Royal Ltd. purchases each unit of product X for $100 and can sell it in the market for $135, the selling price of the product for Royal would be $100.

Jasper Inc. reports the following cost information for March: What is the cost of goods sold for March?

Which of the following will most likely be considered an indirect material cost for a bakery?

Management accounting information of a company is primarily used by:

Which of the following represents the combined sum of direct labor and manufacturing overhead?

Which of the following is true of finished goods inventory?

What is total quality management (TQM)?

Product costs, such as direct materials, are expensed in the period they were paid.

Managerial accounting focuses on providing information for internal planning and control.

For external reporting purposes, GAAP requires companies to treat period costs as assets.

Dreams Manufacturing Company provided the following information for the year 2015: Required: Prepare a statement of the cost of goods manufactured using the following format:

For a manufacturing business, which of the following would be considered a product cost?

Which of the following represents the combined sum of direct materials and direct labor?

Wages and benefits of factory managers are considered as product costs.

Wages and benefits of assembly line workers are included in manufacturing overhead.

Fireox Company's selected cost data for 2015 are shown below: Assuming manufacturing overhead costs of $27,850, what is the amount of direct labor incurred by Fireox Company in 2015?

Merchandiser's inventory consists of raw materials inventory, work-in-process inventory, and finished goods inventory.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters