Exam 14: Managerial Accounting Concepts and Principles

Product costs are expenditures necessary and integral to finished products.

A ______________________ system means that a company acquires or produces inventory only when needed.

Figure 14_03 Use the following information for Acme, Inc., as of December 31 Administrative salaries \ 32,000 Depreciation of factory equipment 25,000 Depreciation of delivery vehicles 9,000 Direct labor 68,000 Factory supplies used 12,000 Finished goods inventory, January 1 57,000 Finished goods inventory, December 31 68,000 Factory insurance 15,500 Interest expense 12,000 Factory utilities 14,000 Factory maintenance 7,500 Raw materials inventory, January 1 8,000 Raw materials inventory, December 31 4,000 Raw material purchases 125,000 Rent on factory building 25,000 Repairs of factory equipment 11,500 Sales commissions 37,500 Goods in process inventory, January 1 3,500 Goods in process inventory, December 31 2,000 -What is the total amount of manufacturing costs added to Goods In Process?

Use the following information to prepare the manufacturing statement for Forsythe Company for the month ended June 30: Goods in process inventory, May 31 \ 12,600 Goods in process inventory, Jurie 30 16,500 Direct materials used during Jure 21,000 Direct labor used during Jurne 31,000 Factory overhead: Indirect material 6,400 Indirect labor 9,200 Factory rent 12,000 Factory depreciation 15,000 Factory utilities 18,400

Use the following information to compute the cost of goods manufactured: Beginning finished goods inventory \ 65,000 Beginning goods in process inventory 81,000 Beginning raw materials 73,000 Depreciation on factory equipment 7,000 Direct labor 25,000 Ending finished goods inventory 67,000 Ending goods in process inventory 79,000 Ending raw materials 60,000 Factory repairs and maintenance 12,000 Raw material purchases 50,000

Classify each of the following cost items as a variable cost,a fixed cost,or a mixed cost by placing an X in the appropriate column.Each cost should be evaluated in terms of the volume of units of finished products produced.Also indicate with an X for each item if it is a product cost or a period cost. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Variable, Fixed, or Mixed Cost\quad Product or Period Cost }$ Cost Item Variable Fixed Mixed Product Period Executive salary Direct labor Direct materials Depreciation of manufacturing equipment Indirect labor Factory utilities Delivery expense Television advertising Indirect materials

One difference between financial and managerial accounting is that the external users that use financial information must plan a company's future,but the internal users of managerial accounting information generally must decide whether to invest in or lend to a company.

The Institute of Management Accountants has developed a code of ethics that requires management accountants to behave in certain ways.Which of the following behaviors is not required?

Under a just-in-time manufacturing system,large quantities of inventory are accumulated throughout the factory to be certain that needed components are available each time that they are needed.

Product costs can be classified as one of three types: direct materials,direct labor,or overhead.

The focus of financial accounting is on an organization's projects,processes,and subdivisions,and the focus of managerial accounting is on the whole organization.

Costs classified by controllability are useful for:

Identify the three categories of manufacturing costs.

The following costs are included in a recent summary of data for a company: advertising expense,$85,000; depreciation expense - factory building,$133,000; direct labor,$250,000; direct material used,$300,000; factory utilities,$105,000; and sales salaries expense,$150,000.Determine the dollar amount of overhead costs.

The following information is available for the year ended December 31: Beginning raw materials inventory \ 2,500 Raw materials purchases 4,000 Ending raw materials inventory 3,000 Office supplies expense 1,000 The amount of raw materials used in production for the year is:

Raw materials purchased plus beginning raw materials inventory equals the ending balance of raw materials inventory.

Costs that are first assigned to inventory are called:

The balanced scorecard aids in continuous improvement by augmenting financial measures with drivers or indicators of future financial performance.