Exam 18: Introduction to Managerial Accounting

Identify each cost as a period cost or a product cost. -Delivery expense

You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company's bonds.Which of the IMA standards appears to have been violated?

For each of the following,indicate whether the statement relates to managerial accounting (MA)or financial accounting (FA): Statement Applies to MA or FA How reports will affect employee behavior is a concern. Summary reports are prepared primarily on the company as a whole, usually on a quarterly or annual basis. Relevant information and focus on the future. Primary users include investors, creditors, and government authorities. There is no requirement to follow GAAP.

Grant's Ironhorse Company manufactures model railroad cars.At the end of October,2019 the accounting records showed the following: Inventories: Beginning Ending Direct Materials \ 10,000 \ 5,000 Work-in-Process 15,000 20,000 Finished Goods 0 5,800 Other Information: Direct Materials Purchases 60,000 Plant maintenance services 31,500 Plant supervisor's salary 12,700 Sales salaries 3,100 Delivery costs 236,000 Sales revenue 10,500 Utilities for plant 23,000 Rent on plant 8,000 Advertising 30,000 Direct labor (a)Prepare a schedule of cost of goods manufactured for Grant's Ironhorse Company and (b)Prepare an income statement for Grant's Ironhorse Company for the year ended October 31,2019

Which of the following is TRUE of service companies?

The income statement of a service company will most likely include ________.

Titus Manufacturing,Inc.provided the following information for the year: Purchases - Direct Materials \ 91,000 Plant Utilities and Insurance 68,000 Indirect Materials 11,170 Indirect Labor 4270 Direct Materials Used in Production 99,000 Direct Labor 117,500 Depreciation on Factory Plant \& Equipment 4000 The inventory account balances as of January 1 are given below. Direct Materials \ 44,000 Work-in-Progress Inventory 10,000 Finished Goods Inventory 50,000 What is the ending balance in the Direct Materials account?

Which of the following is a prime cost and a conversion cost?

Which of the following statements is TRUE of the flow of product and period costs for a manufacturer?

Connie is analyzing the financial statements of MegaMart and Bullseye Company.She wants to invest in one of the companies and is trying to decide which company has the better past performance.Connie is examining ________.

One of the primary activities of Perez,Inc.is to purchase hats from Toppers,Inc.in Texas and sell them to its customers in New York for a profit.It is likely that Toppers is a ________.

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

Seria,Inc.has received a bulk order from an overseas client.As a result,the reported earnings of this year are expected to be significantly higher than the estimates of financial analysts.Joshua,an accountant at Seria,tells this to one of his friends.Which of the IMA standards has Joshua violated?

Goods that are produced by a manufacturing company and are ready to sell are recorded in the ________ account.

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

Financial and managerial accounting both provide useful information,but each has a different emphasis.Briefly distinguish between financial and managerial accounting as they relate to the 1)primary users,2)purpose of information,and 3)focus and time dimension of the information.

Vermont State,Inc.used $153,000 of direct materials and incurred $63,000 of direct labor costs during the year.Indirect labor amounted to $270,000,while indirect materials used totaled $53,000.Other operating costs pertaining to the factory included utilities of $135,500; maintenance of $70,260; repairs of $53,400; depreciation of $133,000; and property taxes of $74,640.There was no beginning or ending finished goods inventory,but Work-in-Process inventory began the year with a $5000 balance and ended the year with a $7400 balance. How much is the cost of goods manufactured?

Rossi,Inc.sells plasticware.The following information summarizes Rossi's 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 Rossi,Inc.,a merchandiser,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

Define planning.List and briefly discuss the two types of planning managers perform.

A corporation used $34,000 of direct materials.It incurred $74,000 in direct labor costs 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?