Exam 1: Introduction to Managerial Accounting

Manufacturing businesses produce their own products, but merchandising businesses do not.

For a manufacturing business, which of the following would be included as manufacturing overhead?

The following information has been provided by Squash Corporation: Direct Labor \ 6,500 Direct Materials Used 2,550 Raw Materials Purchased 5,000 Cost of Goods Manufactured 10,500 Ending Work-in-Process Inventory 1,200 Corporate Headquarters' Property taxes 350 Manufacturing Overhead 510 The beginning balance of Work-in-Process Inventory account was:

Best Company, a merchandiser, sells office supplies. The following information summarizes Best's operating activities during 2015: Utilities Expense \ 6,000 Rent for Store Expense 8,000 Sales Commissions Expense 4,500 Purchases of Merchandise 54,000 Inventory on January 1, 2015 30,000 Inventory on December 31, 2015 20,500 Sales Revenue 108,000 Required: Prepare an income statement for Best Company for the year ended December 31, 2015, using the format below. 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

The balance sheet of a ________ company will show Work-in-Process Inventory as a line item.

Which of the following is a part of manufacturing overhead?

In a manufacturing firm, advertising and marketing costs are included in manufacturing overhead.

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

Which of the following is most likely a service company?

The cost of direct materials cannot easily be traced to the manufactured product, and therefore it is a component of manufacturing overhead.

A company used $35,000 of direct materials, incurred $73,000 in direct labor cost, and $114,000 in manufacturing overhead costs during the period. If beginning and ending Work-in-Process Inventories were $28,000 and $21,000 respectively, what is the cost of goods manufactured?

ERP systems can integrate all of a company's functions, departments, and data into a single system.

Repair and maintenance costs for factory equipment are included in manufacturing overhead.

For a manufacturing firm, which of the following is a product cost?

Which of the following is true of service companies?

Reed Production has provided the following information for the year 2015: Direct Labor \ 153,000 Beginning Work-in-Process Inventory 62,500 Direct Materials Used 271,000 Ending Work-in-Process Inventory 53,850 Manufacturing Overhead 135,500 During the year, Reed produced 71,020 units of product. Calculate the unit product cost.

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

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

For a manufacturing firm, which of the following is a period cost?

For a manufacturer, rent paid for an office building is an example of a period cost.