Exam 18: Introduction to Managerial Accounting

Given the following information, determine the cost of goods manufactured. Direct Labor Incurred \ 63,000 Manufacturing Overhead Incurred 179,500 Direct Materials Used 150,000 Finished Goods Inventory, 1/1/2015 197,500 Finished Goods Inventory, 12/31/2015 221,000 Work-in-Process Inventory, 1/1/2015 96,500 Work-in-Process Inventory, 12/31/2015 109,000

At the beginning of 2015, Swift Company's Work-in-Process Inventory account had a balance of $120,000. During 2015, $250,000 of direct materials were used in production, and $75,000 of direct labor costs were incurred. Manufacturing overhead amounted to $850,000. The cost of goods manufactured was $675,000. What is the balance in the Work-in-Process Inventory account on December 31, 2015?

Management's accountability to its suppliers and vendors is to:

Merchandising companies, like service companies, do not have a Cost of Goods Sold account.

Which of the following statements is true of financial accounting?

Financial accounting prepares reports for internal purposes, whereas managerial accounting provides information to external stakeholders.

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 Beginning Work-in-Process Inventory Direct Materials Used Direct Labor Manufacturing Overhead: Indirect Labor Indirect Materials Utility Expenses Maintenance Repairs Depreciation Property Taxes Total Manufacturing Overhead Total Manufacturing Costs Incurred during the Year Total Manufacturing Costs to Account For Ending Work-in-Process Inventory Cost of Goods Manufactured

Product costs are expensed:

Which of the following correctly describes just-in-time (JIT) inventory management?

In a manufacturing firm, the salary of sales staff is an example of period cost.

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

Direct materials and direct labor are prime costs.

Managerial accounting includes the planning function. Which of the following items would be part of the planning function of a business's managerial accounting?

Anything for which managers want a separate measurement of cost is called:

Management accounting reporting by a public firm is required to follow the rules of GAAP and guidelines of the Securities Exchange Commission.

The following information relates to Webster Inc.: Salvertising Costs \ 10,270 Sales Salary 4,500 Sales Revenue 450,000 President's Salary 40,300 Office Rent 61,100 Manufacturing Equipment Depreciation 2,080 Indirect Materials 9,360 Indirect Labor 11,700 Factory Repair and Maintenance 910 Direct Materials 28,080 Direct Labor 35,100 Delivery Vehicle Depreciation 1,027 Administrative Salaries 24,700 How much were Webster's product costs?

For decision-making purposes, ________ costs are often divided into prime costs and conversion costs.

Which of the following is most likely a service company?

In a manufacturing firm, which of the following is an example of a period cost?