Exam 15: Introduction to Managerial Accounting

Match each description to the appropriate term (a-d). a)Direct materials b)Selling and administrative expense c)Factory overhead d)Direct labor ​

Managerial accounting uses only past data in reports to aid management in the decision making process.

Differentiate between financial and managerial accounting,addressing such issues as users,nature of information,guidelines for preparation,timeliness and focus of reporting.

The cost of wages paid to employees directly involved in converting materials to finished product is classified as direct labor cost.

A performance report that identifies the amount of employee downtime is a financial accounting report.

For a construction contractor,the wages of carpenters would be classified as factory overhead cost.

Which of the following would be least likely to be considered a managerial accounting report?

A cost object indicates how costs are related or identified.

Planning is the process of monitoring operating results and comparing actual results with the expected results.

Which of the following is not a characteristic of useful managerial accounting reports?

Cost of oil used to lubricate factory machinery and equipment is an example of a direct materials cost.

Period costs can be found on both the balance sheet and the income statement.

Taylor Industries had a fire and some of its accounting records were destroyed.Available information is presented below for the year ended December 31. ​ Additional information: Factory overhead is 150% of direct labor cost Finished goods inventory decreased by $18,000 during the year Work in process inventory increased by $12,000 during the year Calculate: (a)Materials inventory,January 1 (b)Direct labor cost (c)Factory overhead incurred (d)Cost of goods sold

Managerial information is for external as well as internal stakeholders.

SASB was organized to develop accounting standards that help companies report decision-useful sustainability information to external financial statement users.

Factory overhead includes

Allen Company used $71,000 of direct materials and incurred $37,000 of direct labor costs during the current year.Indirect labor amounted to $2,700 while indirect materials used totaled $1,600.Other operating costs pertaining to the factory included utilities of $3,100,maintenance of $4,500,supplies of $1,800,depreciation of $7,900,and property taxes of $2,600.There was no beginning or ending finished goods inventory,but work in process inventory began the year with a $5,500 balance and ended the year with a $7,500 balance. ​ Prepare a statement of cost of goods manufactured.

The cost of materials entering directly into the manufacturing process is classified as factory overhead cost.

Sustainability practices acknowledge that a company's long-term success requires the continued availability of natural resources and a productive social environment.

Managers use managerial information to evaluate performance of a company's operation.