Partial income statements of Company A and Company B are provided below: $\begin{array}{|lr|l|lll|}\hline\text { Company A }&&&\text { Company B }\\ \text { Revenue } & \$ 80,000 && \text { Revenue } & \$ 50,000 \\ \text { Expenses: } & & & \text { Cost of Goods Sold: } & & \\ \text { Utilities Expense } & \$ 5,000 & & \text { Beginning Inventory } & \$ 4,000 & \\ \text { Salaries Expense } & 15,500 & & \text { Purchases and Freight In } & 23,000 & \\ \text { Rent Expense } & 3,200 & & \text { Ending Inventory } & -5,500 \\ \text { Total Expenses } & 23,700 &&\text { Cost of Goods Sold } &21,500\\ \text { Operating Income } & \$ 56,300&&\text { Gross Profit }&\$28,500\\\hline \end{array}$ Which of the following statements is true?

A) Company A is a merchandising company. B) Company B is a manufacturing company. C) Company A is a manufacturing company. D) Company A is a service company. A) Company A is a merchandising company. B) Company B is a manufacturing company. C) Company A is a manufacturing company. D) Company A is a service company. D

Barricades Corporation provided the following information for the year 2015: \[\begin{array} { | l | r | } \hline \text { Beginning Balance - Work-in-Process Inventory } & \$ 24,000 \\ \hline \text { Ending Balance - Work-in-Process Inventory } & 56,000 \\ \hline \text { Beginning Balance - Raw Materials Inventory } & 84,000 \\ \hline \text { Ending Balance - Raw Materials Inventory } & 60,000 \\ \hline \text { Purchases - Raw Materials } & 460,000 \\ \hline \text { Direct Labor } & 470,000 \\ \hline \text { Indirect Materials } & 47,000 \\ \hline \text { Indirect Labor } & 19,000 \\ \hline \text { Depreciation on Factory Plant \& Equipment } & 24,000 \\ \hline \text { Plant Utilities \& Insurance } & 270,000 \\ \hline \end{array}\] -What was the amount of manufacturing overhead costs?

A) $360,000 B) $313,000 C) $90,000 D) $336,000 A) $360,000 B) $313,000 C) $90,000 D) $336,000

The following information was obtained from Fizz Company: \[\begin{array} { | l | r | } \hline \text { Advertising Costs } & \$ 9,900 \\ \hline \text { Indirect Labor } & 11,000 \\ \hline \text { CEO's Salary } & 49,000 \\ \hline \text { Direct Labor } & 41,000 \\ \hline \text { Indirect Materials } & 7,900 \\ \hline \text { Direct Materials Used } & 61,000 \\ \hline \text { Factory Utilities } & 700 \\ \hline \text { Factory Janitorial Costs } & 2,300 \\ \hline \text { Manufacturing Equipment Depreciation } & 2,100 \\ \hline \text { Delivery Vehicle Depreciation } & 1,100 \\ \hline \text { Administrative Wages and Salaries } & 21,000 \\ \hline \end{array}\] - Calculate Fizz's total product costs.

A) $126,000 B) $104,100 C) $127,100 D) $115,000 A) $126,000 B) $104,100 C) $127,100 D) $115,000

Amoeba Manufacturing Company provided the following information for the year 2015: \[\begin{array} { | l | r | } \hline \text { Purchases - Raw Materials } & \$ 90,000 \\ \hline \text { Plant Utilities \& Insurance } & 67,500 \\ \hline \text { Indirect Materials } & 11,750 \\ \hline \text { Indirect Labor } & 4,750 \\ \hline \text { Direct Materials Used in Production } & 96,000 \\ \hline \text { Direct Labor } & 117,500 \\ \hline \text { Depreciation on Factory Plant \& Equipment } & 6,000 \\ \hline \text { Cost of Goods Manufactured } & 290,850 \\ \hline \end{array}\] The inventory account balances as of January 1st 2015 are given below. \[\begin{array} { | l | r | } \hline \text { Raw Materials Inventory } & \$ 42,000 \\ \hline \text { Work-in-Process Inventory } & 12,000 \\ \hline \text { Finished Goods Inventory } & 49,500 \\ \hline \end{array}\] What is the ending balance in the Work-in-Process Inventory account?

A) $24,650 B) $12,000 C) $49,500 D) $65,350 A) $24,650 B) $12,000 C) $49,500 D) $65,350

Evanston Manufacturing Company reported the following information for the year 2015: \[\begin{array} { | l | r | } \hline \text { Number of Units Produced } & 4,800 \\ \hline \text { Number of Units Sold } & 5,250 \\ \hline \text { Cost of Goods Manufactured } & \$ 460,800 \\ \hline \text { Cost of Goods Sold } & \$ 488,250 \\ \hline \text { Sales Revenue } & \$ 1,260,000 \\ \hline \text { Gross Profit } & \$ 771,750 \\ \hline \text { Operating Expense } & \$ 724,900 \\ \hline \end{array}\] What was the unit product cost?

A) $87.77 B) $262.50 C) $93.00 D) $96.00 A) $87.77 B) $262.50 C) $93.00 D) $96.00

Amoeba Manufacturing Company provided the following information for the year 2015: \[\begin{array} { | l | r | } \hline \text { Purchases-Raw Materials } & \$ 90,000 \\ \hline \text { Plant Utilities \& Insurance } & 67,500 \\ \hline \text { Indirect Materials } & 11,750 \\ \hline \text { Indirect Labor } & 4,750 \\ \hline \text { Direct Materials Used in Production } & 96,000 \\ \hline \text { Direct Labor } & 117,500 \\ \hline \text { Depreciation on Factory Plant \& Equipment } & 6,000 \\ \hline \end{array}\] The inventory account balances as of January 1st 2015 are given below. \[\begin{array} { | l | r | } \hline \text { Raw Materials Inventory } & \$ 42,000 \\ \hline \text { Work-in-Process Inventory } & 12,000 \\ \hline \text { Finished Goods Inventory } & 49,500 \\ \hline \end{array}\] What is the ending balance in the Raw Materials Inventory account?

A) $54,000 B) $6,000 C) $111,000 D) $24,250 A) $54,000 B) $6,000 C) $111,000 D) $24,250

Jasper Inc. reports the following cost information for March: \[\begin{array} { | l | r | } \hline \text { Cost of Goods Manufactured } & \$ 75,000 \\ \hline \text { Manufacturing Overhead } & 18,250 \\ \hline \text { Finished Goods Inventory, March 1 } & 4,500 \\ \hline \text { Finished Goods Inventory, March 31 } & 2,650 \\ \hline \text { Work-in-Process Inventory, March 1 } & 9,670 \\ \hline \text { Work-in-Process Inventory, March 31 } & 1,250 \\ \hline \text { Direct Materials Used } & 25,300 \\ \hline \end{array}\] - What is the cost of goods sold for March?

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

Exam 1: Introduction to Managerial Accounting

Partial income statements of Company A and Company B are provided below: Company A Company B Revenue \ 80,000 Revenue \ 50,000 Expenses: Cost of Goods Sold: Utilities Expense \ 5,000 Beginning Inventory \ 4,000 Salaries Expense 15,500 Purchases and Freight In 23,000 Rent Expense 3,200 Ending Inventory -5,500 Total Expenses 23,700 Cost of Goods Sold 21,500 Operating Income \ 56,300 Gross Profit \2 8,500 Which of the following statements is true?

Free

(Multiple Choice)

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(31)

Question 1

Correct Answer:

Verified

D

Managerial accounting is used in manufacturing and merchandising companies, but not in service companies.

Free

(True/False)

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(33)

Question 2

Correct Answer:

Verified

False

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

Free

(True/False)

4.9/5

(38)

Question 3

Correct Answer:

Verified

False

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

(True/False)

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Question 4

Barricades Corporation provided the following information for the year 2015: Beginning Balance - Work-in-Process Inventory \ 24,000 Ending Balance - Work-in-Process Inventory 56,000 Beginning Balance - Raw Materials Inventory 84,000 Ending Balance - Raw Materials Inventory 60,000 Purchases - Raw Materials 460,000 Direct Labor 470,000 Indirect Materials 47,000 Indirect Labor 19,000 Depreciation on Factory Plant \& Equipment 24,000 Plant Utilities \& Insurance 270,000 -What was the amount of manufacturing overhead costs?

(Multiple Choice)

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(28)

Question 5

The following information was obtained from Fizz Company: Advertising Costs \ 9,900 Indirect Labor 11,000 CEO's Salary 49,000 Direct Labor 41,000 Indirect Materials 7,900 Direct Materials Used 61,000 Factory Utilities 700 Factory Janitorial Costs 2,300 Manufacturing Equipment Depreciation 2,100 Delivery Vehicle Depreciation 1,100 Administrative Wages and Salaries 21,000 - Calculate Fizz's total product costs.

(Multiple Choice)

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(40)

Question 6

Manufacturing overhead includes all manufacturing costs, such as direct labor and direct materials.

(True/False)

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Question 7

Which of the following would be classified as a prime cost?

(Multiple Choice)

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Question 8

Amoeba Manufacturing Company provided the following information for the year 2015: Purchases - Raw Materials \ 90,000 Plant Utilities \& Insurance 67,500 Indirect Materials 11,750 Indirect Labor 4,750 Direct Materials Used in Production 96,000 Direct Labor 117,500 Depreciation on Factory Plant \& Equipment 6,000 Cost of Goods Manufactured 290,850 The inventory account balances as of January 1^st 2015 are given below. Raw Materials Inventory \ 42,000 Work-in-Process Inventory 12,000 Finished Goods Inventory 49,500 What is the ending balance in the Work-in-Process Inventory account?

(Multiple Choice)

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Question 9

Which of the following is true of just-in-time (JIT) inventory management?

(Multiple Choice)

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Question 10

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

(Multiple Choice)

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Question 11

Which of the following statements is true of financial accounting?

(Multiple Choice)

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Question 12

Comparing actual performance to previously budgeted amounts is part of the:

(Multiple Choice)

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Question 13

Evanston Manufacturing Company reported the following information for the year 2015: 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?

(Multiple Choice)

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Question 14

Wages and benefits of assembly line workers are period costs.

(True/False)

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Question 15

Which of the following correctly describes the accounting for administrative expenses of a manufacturing company?

(Multiple Choice)

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Question 16

Amoeba Manufacturing Company provided the following information for the year 2015: Purchases-Raw Materials \ 90,000 Plant Utilities \& Insurance 67,500 Indirect Materials 11,750 Indirect Labor 4,750 Direct Materials Used in Production 96,000 Direct Labor 117,500 Depreciation on Factory Plant \& Equipment 6,000 The inventory account balances as of January 1^st 2015 are given below. Raw Materials Inventory \ 42,000 Work-in-Process Inventory 12,000 Finished Goods Inventory 49,500 What is the ending balance in the Raw Materials Inventory account?

(Multiple Choice)

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(38)

Question 17

Jasper Inc. reports the following cost information for March: Cost of Goods Manufactured \ 75,000 Manufacturing Overhead 18,250 Finished Goods Inventory, March 1 4,500 Finished Goods Inventory, March 31 2,650 Work-in-Process Inventory, March 1 9,670 Work-in-Process Inventory, March 31 1,250 Direct Materials Used 25,300 - What is the cost of goods sold for March?

(Multiple Choice)

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Question 18

Which of the following correctly describes the accounting for indirect labor costs?

(Multiple Choice)

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Question 19

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

(True/False)

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Question 20

Managerial accounting is used in manufacturing and merchandising companies, but not in service companies.

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

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

Manufacturing overhead includes all manufacturing costs, such as direct labor and direct materials.

Which of the following would be classified as a prime cost?

Which of the following is true of just-in-time (JIT) inventory management?

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

Which of the following statements is true of financial accounting?

Comparing actual performance to previously budgeted amounts is part of the:

Wages and benefits of assembly line workers are period costs.

Which of the following correctly describes the accounting for administrative expenses of a manufacturing company?

Which of the following correctly describes the accounting for indirect labor costs?

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

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

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