Exam 16: Introduction to Managerial Accounting

Which of the following would be considered a direct labor cost for a manufacturing company?

The chief financial officer, controller, and treasurer are all examples of staff positions.

Define indirect materials and give two examples of indirect materials for a manufacturing company.

Manufacturing companies have inventory accounts, but merchandising companies do not.

Selected data for Lemon Grass, Inc. for the year are provided below: Factory Utilities \ 1000 Indirect Materials Used 34,000 Direct Materials Used 292,000 Property Taxes on Factory Building 5900 Sales Commissions 85,000 Indirect Labor Incurred 22,000 Direct Labor Incurred 150,000 Depreciation on Factory Equipment 6800 What is the total manufacturing overhead?

What is Total Quality Management (TQM)?

In a manufacturing company, wages and benefits of factory managers are treated as product costs.

The inventory of a merchandising company consists of Raw Materials Inventory, Work-in-Process Inventory, and Finished Goods Inventory.

Anika, a division manager, is purchasing materials to ensure she has enough to meet customers' demands. Anika is engaging in the ________.

Repair and maintenance costs for manufacturing equipment are product costs.

Payton Corporation provided the following information for the year: Beginning Balance - Work-in-Process Inventory \ 26,000 Ending Balance - Work-in-Process Inventory 55,000 Beginning Balance - Direct Materials 81,000 Ending Balance - Direct Materials 59,000 Purchases - Direct Materials 360,000 Direct Labor 471,000 Indirect Labor 19,000 Depreciation on Factory Plant and Equipment 24,000 Plant Utilities and Insurance 268,000 What was the amount of the cost of goods manufactured for the year?

Which of the following correctly describes the accounting for factory depreciation?

Which of the following would be included as manufacturing overhead for a manufacturing company?

Comparing actual results to expected results is part of the

Managerial accounting can be used to calculate costs for service and merchandising companies.

Financial reporting is typically much more detailed than managerial accounting.

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

Herrera, Inc., a merchandiser, sells office supplies. The following information summarizes Herrera's operating activities during the year: Utilities Expense \ 6,000 Rent for Store Expense 8,000 Sales Commissions Expense 4,500 Purchases of Merchandise 54,000 Merchandise Inventory on January 1 30,000 Merchandise Inventory on December 31 20,500 Sales Revenue 108,000 Required: Prepare an income statement for Herrera, Inc. for the year ended December 31, using the format below. Include a proper heading. Sales Revenue Cost of Goods Sold: Beginning Inventory Purchases Cost of Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Selling Expenses: Sales Commissions Expense Administrative Expenses: Rent Expense Utilities Expense Total Operating Expenses Operating Income

Jasper, Inc. reports the following cost information for March: Cost of Goods Manufactured \ 74,100 Manufacturing Overhead 18,500 Finished Goods Inventory, March 1 4000 Finished Goods Inventory, March 31 2700 Work-in-Process Inventory, March 1 9800 Work-in-Process Inventory, March 31 1400 Direct Materials Used 25,200 What is the cost of goods sold for March?

Service companies do not have product costs, so they often consider all operating expenses as part of their cost of service.