Exam 15: Managerial Accounting and Cost Concepts

Which of the following is a period cost?

Which of the following questions do not dictate a managerial report's format?

Both product costs and period costs could appear on the balance sheet.

All manufacturing costs that are assigned to completed (but unsold)products should be classified as

Financial accounting relies on the criterion of usefulness rather than formal guidelines in reporting information.

The four stages of the management process are: planning,performing,evaluating,and communicating.

A job order cost card can be used to record all product costs incurred during production.

Direct labor cannot be traced to products as it is invisible.

Period cost and product cost are synonymous terms.

Direct materials cost is a fixed cost because it always occurs in a production process.

Period costs are also called noninventoriable costs.

Management accounting provides reports that are future oriented.

Complete the following chart by placing an "X" under the applicable column heading.Classify each cost as a fixed cost or variable cost and as either a direct or indirect product cost or a period cost.

Total manufacturing costs decrease the balance of the Work in Process Inventory account.

The amount of cost of goods sold and cost of goods manufactured will be the same if a company sells all of the units it produced.

Accountants must have high professional ethics.List and briefly describe five ethical standards that management accountants subscribe to that,in your opinion,help maintain the impression that accountants are highly ethical. The student should list any five of the following ethical standards: Competence: Each member has a responsibility to: 1.Maintain an appropriate level of professional expertise by continually developing knowledge and skills. 2.Perform professional duties in accordance with relevant laws,regulations,and technical standards. 3.Provide decision support information and recommendations that are accurate,clear,concise,and timely. 4.Recognize and communicate professional limitations or other constraints that would preclude responsible judgment or successful performance of an activity.

Sorrel Pharmaceuticals Corporation manufactures a variety of drugs that are marketed internationally.Inventories on May 31 and June 30 were as follows: Purchases of materials for June were $142,600.Direct labor costs were incurred and computed on the basis of 27,000 hours at $8 per hour.Actual overhead costs incurred in June were as follows: operating supplies used,$5,700;janitorial and materials handling labor,$38,100;employee benefits,$110,800;heat,light,and power,$50,000;factory depreciation,$8,400;property taxes,$8,000;and expired portion of insurance premiums,$12,000.Net sales for June were $992,700.Selling and administrative expenses were $165,000. Prepare a statement of cost of goods manufactured for the month ended June 30.

Both indirect materials and indirect labor are overhead costs.

Period costs are

Use the information below for the year ended December 31,2014,to prepare the statement of cost of goods manufactured.