Question 1

Total manufacturing costs to account for during the year minus the ending Work-in-Process Inventory equals the cost of goods manufactured.

Accepted Answer

A) True 
 B)False

Question 2

For external reporting purposes,GAAP requires companies to treat period costs as assets.

Accepted Answer

A) True 
 B)False

Question 3

In manufacturing,the cost objects are often units of product.

Accepted Answer

A) True 
 B)False

Question 4

In a manufacturing company,wages and benefits of assembly line workers are period costs.

Accepted Answer

A) True 
 B)False

Question 5

Repair and maintenance costs for manufacturing equipment are product costs.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is a part of manufacturing overhead?

Accepted Answer

A) cost of raw materials 
B) wages of assembly line workers 
C) factory insurance 
D) depreciation on office furniture 
A) cost of raw materials 
B) wages of assembly line workers 
C) factory insurance 
D) depreciation on office furniture

Question 7

All costs incurred in the manufacture of final products are product costs.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is true of product costs?

Accepted Answer

A) They are expensed in the period they are paid. 
B) For external reporting,GAAP requires that they be expensed before the products are sold. 
C) They are first recorded in an inventory account. 
D) For merchandising companies,product costs do not include freight costs. 
A) They are expensed in the period they are paid. 
B) For external reporting,GAAP requires that they be expensed before the products are sold. 
C) They are first recorded in an inventory account. 
D) For merchandising companies,product costs do not include freight costs.

Question 9

Financial statements prepared for investors and creditors often include forward-looking information because they make decisions based on a company's future prospects.

Accepted Answer

A) True 
 B)False

Question 10

The income statement of a manufacturing company separates the product costs from the period costs.

Accepted Answer

A) True 
 B)False

Question 11

Excellent,Inc.sells accounting textbooks.The following information summarizes Excellent's operating activities for the year:
 $\begin{array}{|l|r|}
\hline \text { Merchandise Inventory, January 1 } & \$ 10,000 \
\hline \text { Merchandise Inventory, December 31 } & 7,000 \
\hline \text { Purchases } & 95,000 \
\hline \text { Selling and Administrative Expenses } & 65,000 \
\hline \text { Sales Revenue } & 180,000 \
\hline
\end{array}$ Required: Prepare Excellent,Inc.'s income statement for the year ended December 31.

Accepted Answer

\[\begin{array} { c } 
\text { Excellent

Question 12

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

Accepted Answer

A) depreciation on delivery vehicles 
B) depreciation on administrative building furniture and fixtures 
C) depreciation on manufacturing equipment 
D) depreciation on the accounting department's computer equipment 
A) depreciation on delivery vehicles 
B) depreciation on administrative building furniture and fixtures 
C) depreciation on manufacturing equipment 
D) depreciation on the accounting department's computer equipment

Question 13

Manufacturing costs flow from Work-in-Process Inventory to Cost of Goods Sold to Finished Goods Inventory.

Accepted Answer

A) True 
 B)False

Question 14

The cost of goods manufactured includes selling expenses,administrative expenses,and manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 15

Dreams Manufacturing,Inc.provided the following information for the year:
 $$\begin{array} { |l | r | } 
\hline \text { Purchases-Raw Materials } & \$ 270,000 \
\hline \text { Plant Utilities and Insurance } & 202,500 \
\hline \text { Indirect Materials } & 35,250 \
\hline \text { Indirect Labor } & 14,250 \
\hline \text { Ending Balance - Work-in-Process Inventory } & 42,000\
\hline \text { Ending Balance - Raw Materials Inventory } &45,000   \
\hline \text { Direct Labor } & 352,500 \
\hline \text { Depreciation on Factory Plant and Equipment } &18,000  \
\hline \text { Beginning Balance - Work-in-Process Inventory } &18,000 \
\hline \text { Beginning Balance - Raw Materials Inventory } & 63,000  \
\hline
\end{array}$$ Required: Prepare a statement of the cost of goods manufactured using the following format:

Accepted Answer

The answer of Dreams Manufacturing,Inc.provided the following information for the...

Question 16

Minnetonka,Inc.is a merchandiser of stone ornaments.The company sold 15,100 units during the year.The company has provided the following information: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 558,000 \
\hline \text { Purchases (excluding Freight In) } & 280,000 \
\hline \text { Selling and Administrative Expenses } & 280,000 \
\hline \text { Freight In } & 66,000 \
\hline \text { Beginning Merchandise Inventory } & 13,000 \
\hline \text { Ending Merchandise Inventory } & 52,000 \
\hline
\end{array}$$ What is the unit cost per item sold? (Round your answer to the nearest cent. )

Accepted Answer

A) $19.21 
B) $15.77 
C) $22.85 
D) $19.40 
A) $19.21 
B) $15.77 
C) $22.85 
D) $19.40

Question 17

Unlike merchandising companies,income statements of service companies include cost of goods sold as a line item.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Red Tail Manufacturing,Inc.provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Purchases-Raw Materials } & \$ 91,000 \
\hline \text { Plant Utilities and Insurance } & 66,000 \
\hline \text { Indirect Materials Used } & 11,240 \
\hline \text { Indirect Labor } & 4,830 \
\hline \text { Direct Materials Used in Production } & 98,000 \
\hline \text { Direct Labor } & 118,500 \
\hline \text { Depreciation on Factory Plant and Equipment } & 8,000 \
\hline \text { Cost of Goods Manufactured } & 292,000 \
\hline \text { Cost of Goods Sold } & 290,000 \
\hline
\end{array}$$ The inventory account balances as of January 1 are given below.
$$\begin{array} { | l | r | } 
\hline \text { Raw Materials Inventory } & \$ 45,000 \
\hline \text { Work-in-Progress Inventory } & 11,000 \
\hline \text { Finished Goods Inventory } & 304,570 \
\hline
\end{array}$$ What is the ending balance in the Finished Goods Inventory?

Accepted Answer

A) $304,570 
B) $302,570 
C) $306,570 
D) $596,570 
A) $304,570 
B) $302,570 
C) $306,570 
D) $596,570

Question 20

Which of the following is an objective of managerial accounting?

Accepted Answer

A) to generate a company's financial statements for tax reporting 
B) to provide information to business managers to assist them in controlling their business 
C) to provide information to shareholders to assist them with their investment decisions 
D) to ensure that the reports produced for internal and external business purposes are GAAP compliant 
A) to generate a company's financial statements for tax reporting 
B) to provide information to business managers to assist them in controlling their business 
C) to provide information to shareholders to assist them with their investment decisions 
D) to ensure that the reports produced for internal and external business purposes are GAAP compliant

Exam 16: Introduction to Managerial Accounting

Total manufacturing costs to account for during the year minus the ending Work-in-Process Inventory equals the cost of goods manufactured.

For external reporting purposes,GAAP requires companies to treat period costs as assets.

In manufacturing,the cost objects are often units of product.

In a manufacturing company,wages and benefits of assembly line workers are period costs.

Repair and maintenance costs for manufacturing equipment are product costs.

Which of the following is a part of manufacturing overhead?

All costs incurred in the manufacture of final products are product costs.

Which of the following is true of product costs?

Financial statements prepared for investors and creditors often include forward-looking information because they make decisions based on a company's future prospects.

The income statement of a manufacturing company separates the product costs from the period costs.

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

Manufacturing costs flow from Work-in-Process Inventory to Cost of Goods Sold to Finished Goods Inventory.

The cost of goods manufactured includes selling expenses,administrative expenses,and manufacturing overhead.

Unlike merchandising companies,income statements of service companies include cost of goods sold as a line item.

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

Which of the following is an objective of managerial accounting?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Investments

Current Liabilities and Payroll

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Job Order Costing

Process Costing

Cost Management Systems: Activity-Based, just-In-Time, and Quality Management Systems

Cost-Volume-Profit Analysis

Variable Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Responsibility Accounting and Performance Evaluation

Short-Term Business Decisions

Capital Investment Decisions

Accounting Information Systems

Filters