Question 1

Products that have been completed and are ready to be sold by the manufacturer are called:

Accepted Answer

A)  Cost of goods sold. 
B)  Finished goods inventory. 
C)  Work in process inventory. 
D)  Factory supplies. 
E)  Raw materials inventory. 
A)  Cost of goods sold. 
B)  Finished goods inventory. 
C)  Work in process inventory. 
D)  Factory supplies. 
E)  Raw materials inventory.

Question 2

Product costs are expenditures necessary and integral to finished products.

Accepted Answer

A) True 
 B)False

Question 3

The main difference between the cost of goods sold of a manufacturer and a merchandiser is that the manufacturer includes cost of goods manufactured rather than cost of goods purchased.

Accepted Answer

A) True 
 B)False

Question 4

The following information is available for the year ended December 31: $$\begin{array} { l | r } 
\text { Beginning raw materials inventory } & \$ 1,000 \
\hline \text { Raw materials purchases } & 86,000 \
\hline \text { Ending raw materials inventory } & 10,400 \
\hline \text { Manufacturing supplies expense } & 900
\end{array}$$ The amount of raw materials used in production for the year is:

Accepted Answer

A)  $87,500. 
B)  $86,600. 
C)  $85,400. 
D)  $86,900. 
E)  $85,700. 
A)  $87,500. 
B)  $86,600. 
C)  $85,400. 
D)  $86,900. 
E)  $85,700.

Question 5

A manufacturing company's beginning finished goods inventory was $29,000; cost of goods manufactured was $316,000; and the ending finished goods inventory was $31,000. What is the cost of goods sold for that year?

Accepted Answer

None

Question 6

Expenditures necessary and integral to the manufacture of finished products are ________ costs.

Accepted Answer

The answer of Expenditures necessary and integral to the manufacture...

Question 7

Just-in-time manufacturing (JIT) focuses on quality improvement and applies this standard to all aspects of business activities.

Accepted Answer

A) True 
 B)False

Question 8

For each item shown below, classify it as a product cost or a period cost, by placing an X in the appropriate column. For each item that is a product cost, also indicate whether it is a direct cost or an indirect cost with respect to a unit of finished product.

Accepted Answer

The answer of For each item shown below, classify it...

Question 9

Match the following terms with the appropriate definition.
________ (1) Direct materials
________ (2) Indirect costs
________ (3) Product costs
________ (4) Prime costs
(5) Fixed costs
(6) Direct labor
(7) Period costs
(8) Conversion costs
(9) Factory overhead
(10) Variable costs
(a) Costs that flow directly to the current income statement as expenses.
(b) Costs that change in proportion to changes in volume of activity.
(c) The efforts of employees who physically convert materials to finished products.
(d) Manufacturing expenditures that cannot be separately or readily traced to finished goods.
(e) Expenditures necessary and integral to finished products.
(f) Expenditures incurred in the process of converting raw materials to finished products; include direct labor and factory overhead.
(g) Tangible components of a finished product separately and readily traced through the manufacturing process.
(h) Expenditures directly associated with the manufacture of finished products; include direct materials and direct labor.
(i) Costs that do not change in total with changes in the volume of activity.
(j) Costs that are incurred for the benefit of more than one cost object.

Accepted Answer

1. G; 2. J; 3. E; 4.

Question 10

A financial report that summarizes the amounts and types of costs that were incurred in the manufacturing process during the period is a:

Accepted Answer

A)  Managerial statement. 
B)  Materials statement. 
C)  Merchandise schedule. 
D)  General-purpose statement. 
E)  Schedule of cost of goods manufactured. 
A)  Managerial statement. 
B)  Materials statement. 
C)  Merchandise schedule. 
D)  General-purpose statement. 
E)  Schedule of cost of goods manufactured.

Question 11

________ inventory consists of goods a company acquires to use in making products.

Accepted Answer

The answer of ________ inventory consists of goods a company...

Question 12

Waters, Inc. reported the following data regarding costs and inventories for the current year: beginning finished goods inventory, $5,000; cost of goods manufactured, $21,500; ending finished goods inventory, $4,000. Cost of goods sold for Waters, Inc. equals ________.

Accepted Answer

The answer of Waters, Inc. reported the following data regarding...

Question 13

Control is the process of monitoring planning decisions and evaluating an organization's activities and employees.

Accepted Answer

A) True 
 B)False

Question 14

Cost concepts such as variable, fixed, mixed, direct, and indirect apply only to manufacturers and not to service companies.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not part of the sales activity in the flow of manufacturing activities?

Accepted Answer

A)  Ending Work in Process Inventory. 
B)  Cost of Goods Sold. 
C)  Beginning Finished Goods Inventory. 
D)  Total Finished Goods available for sale. 
E)  Cost of Goods Manufactured. 
A)  Ending Work in Process Inventory. 
B)  Cost of Goods Sold. 
C)  Beginning Finished Goods Inventory. 
D)  Total Finished Goods available for sale. 
E)  Cost of Goods Manufactured.

Question 16

All of the following statements regarding manufacturing costs are true except:

Accepted Answer

A)  Direct material costs that increase in total with volume of production are called variable costs. 
B)  When overhead costs don't vary with production, they are called fixed overhead. 
C)  Overhead can be both variable and fixed. 
D)  The reporting of fixed and variable costs separately is not helpful to managers in analyzing cost behavior. 
E)  When overhead costs vary with production, they are called variable overhead. 
A)  Direct material costs that increase in total with volume of production are called variable costs. 
B)  When overhead costs don't vary with production, they are called fixed overhead. 
C)  Overhead can be both variable and fixed. 
D)  The reporting of fixed and variable costs separately is not helpful to managers in analyzing cost behavior. 
E)  When overhead costs vary with production, they are called variable overhead.

Question 17

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

Accepted Answer

Managerial

Question 18

Which of the following represents the correct formula for calculating cost of goods manufactured?

Accepted Answer

A)  Direct materials used + direct labor - factory overhead + beginning work in process - ending work in process. 
B)  Direct materials used + direct labor + factory overhead + beginning work in process + ending work in process. 
C)  Direct materials used + direct labor + factory overhead + beginning work in process - ending work in process. 
D)  Direct materials used + direct labor + factory overhead - beginning work in process - ending work in process. 
E)  Direct materials used + direct labor + factory overhead - beginning work in process + ending work in process. 
A)  Direct materials used + direct labor - factory overhead + beginning work in process - ending work in process. 
B)  Direct materials used + direct labor + factory overhead + beginning work in process + ending work in process. 
C)  Direct materials used + direct labor + factory overhead + beginning work in process - ending work in process. 
D)  Direct materials used + direct labor + factory overhead - beginning work in process - ending work in process. 
E)  Direct materials used + direct labor + factory overhead - beginning work in process + ending work in process.

Question 19

Expenditures directly associated with the manufacture of finished goods that include direct materials and direct labor, are ______________costs.

Accepted Answer

The answer of Expenditures directly associated with the manufacture of...

Question 20

Selling and administrative expenses are normally period costs.

Accepted Answer

A) True 
 B)False

Exam 18: Managerial Accounting Concepts and Principles

Products that have been completed and are ready to be sold by the manufacturer are called:

Product costs are expenditures necessary and integral to finished products.

The main difference between the cost of goods sold of a manufacturer and a merchandiser is that the manufacturer includes cost of goods manufactured rather than cost of goods purchased.

The following information is available for the year ended December 31: Beginning raw materials inventory \ 1,000 Raw materials purchases 86,000 Ending raw materials inventory 10,400 Manufacturing supplies expense 900 The amount of raw materials used in production for the year is:

A manufacturing company's beginning finished goods inventory was $29,000; cost of goods manufactured was $316,000; and the ending finished goods inventory was $31,000. What is the cost of goods sold for that year?

Expenditures necessary and integral to the manufacture of finished products are ________ costs.

Just-in-time manufacturing (JIT) focuses on quality improvement and applies this standard to all aspects of business activities.

For each item shown below, classify it as a product cost or a period cost, by placing an X in the appropriate column. For each item that is a product cost, also indicate whether it is a direct cost or an indirect cost with respect to a unit of finished product.

A financial report that summarizes the amounts and types of costs that were incurred in the manufacturing process during the period is a:

________ inventory consists of goods a company acquires to use in making products.

Waters, Inc. reported the following data regarding costs and inventories for the current year: beginning finished goods inventory, $5,000; cost of goods manufactured, $21,500; ending finished goods inventory, $4,000. Cost of goods sold for Waters, Inc. equals ________.

Control is the process of monitoring planning decisions and evaluating an organization's activities and employees.

Cost concepts such as variable, fixed, mixed, direct, and indirect apply only to manufacturers and not to service companies.

Which of the following is not part of the sales activity in the flow of manufacturing activities?

All of the following statements regarding manufacturing costs are true except:

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

Which of the following represents the correct formula for calculating cost of goods manufactured?

Expenditures directly associated with the manufacture of finished goods that include direct materials and direct labor, are ______________costs.

Selling and administrative expenses are normally period costs.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Present and Future Values in Accounting

Activity-Based Costing

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