Exam 16: Introduction to Managerial Accounting

Amber Corporation has provided the following information of its operating activities for the year: Merchandise Inventory, January 1 \ 150,000 Merchandise Inventory, December 31 75,000 Purchases 854,000 Selling and Administrative Expenses 65,000 Sales Revenue 1,000,00 Required: Prepare Amber's income statement for the year ended December 31.Use the format provided below: Sales Revenue Cost of Goods Sold Beginning Inventory Cost of Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Selling and Administrative Expenses Operating Income

The salary of a manufacturing plant manager will be included in manufacturing overhead.

Five Seasons is a merchandiser of packed foods.The company provides the following information for the year: Sales Revenue \ 145,000 Cost of Goods Sold 64,000 Operating Expenses 67,000 Net Income 14,000 Number of Units Sold 29,000 How much was the unit cost per item of product sold? (Round your answer to the nearest cent. )

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

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

In a manufacturing company,wages and benefits of assembly line workers are included in manufacturing overhead.

In a manufacturing plant,indirect materials costs such as lubricants and cleaning fluids are product costs.

Which of the following is the primary objective of managerial accounting?

The wages of manufacturing plant janitors are considered to be non-manufacturing overhead costs as these costs are not directly related to the manufacturing process.

Repair and maintenance costs of vehicles used to deliver products to the customers are included in manufacturing overhead.

Simons,Inc.sells plasticware.The following information summarizes Simons' operating activities for the year: Utilities Expense \ 65,000 Rent Expense 10,000 Sales Commissions Expense 32,500 Purchases of Merchandise 260,000 Merchandise Inventory on January 1 65,000 Merchandise Inventory on December 31 97,500 Sales Revenue 650,000 Prepare an income statement for Simons,Inc. ,a merchandiser,for the year ended December 31 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 IMA standards of ethical practice require managerial accountants to maintain their professional competence.

Which of the following is true of service companies?

The cost of goods sold is added to net sales revenue to determine gross profit.

Sales commissions are included in manufacturing overhead.

A corporation used $34,000 of direct materials and incurred $74,000 in direct labor cost,and $112,500 in manufacturing overhead costs during the period.What is the cost of goods manufactured if the beginning and ending Work-in-Process Inventories were $27,500 and $20,500,respectively?

Repair and maintenance costs of vehicles used to deliver products to customers are product costs.

Bentley Manufacturing,Inc.provided the following information for the year: Purchases-Raw Materials \ 90,000 Plant Utilities and Insurance 67,500 Indirect Materials Used 11,040 Indirect Labor 4,420 Direct Materials Used in Production 99,000 Direct Labor 119,500 Depreciation on Factory Plant and Equipment 5,000 Cost of Goods Manufactured 291,500 The inventory account balances as of January 1 are given below. Raw Materials Inventory \ 46,000 Work-in-Progress Inventory 1,000 Finished Goods Inventory 50,000 What is the ending balance in the Work-in-Process Inventory account?

A.S.Design Corporation reports the following cost information for March: Cost of Goods Manufactured \ 75,000 Finished Goods Inventory, March 1 4,000 Finished Goods Inventory, March 31 2,650 Work-in-Process Inventory, March 1 9,670 Work-in-Process Inventory, March 31 1,000 Direct Labor 36,000 Direct Materials Used 16,900 What is the amount of manufacturing overhead incurred by the company in March?

Product costs,such as factory overhead,should be treated as an asset until the product is sold.