Exam 16: Managerial Accounting Concepts and Principles

Operating expenses are product costs and are expensed when the product is sold.

A staff department or unit is one that provides services, assistance, and advice to the departments with line or other staff responsibilities.

In most business organizations, the chief management accountant is called the:

The Sharpe Company reports the following information for 2012: Compute: a) product costs b) period costs

Allen Company used $71,000 of direct materials and incurred $37,000 of direct labor costs during 2011. 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.

Which of the following is not a prime cost?

On the balance sheet for a manufacturing business, the cost of direct materials, direct labor, and factory overhead are categorized as either materials inventory, work in process inventory, or finished goods inventory.

Which of the following accounts will be found on the income statement?

Identify the following costs as a (a) product cost or (b) period cost for a cake factory. 1. _____ Frosting 2. _____ Baker's wages 3. _____ Advertising fees 4. _____ Transportation out

Managerial accounting provides useful information to managers on product costs.

In most business organizations, the chief accountant is called the controller.

Differentiate between: a) direct materials versus indirect materials b) direct labor versus indirect labor

The costs of materials and labor that do not enter directly into the finished product are classified as cost of goods sold.

The following information is available for Carter Corporation for 2012: 1) Materials inventory decreased $4,000 during 2012. 2) Materials inventory on December 31, 2012, was 50% of materials inventory on January 1, 2012. 3) Beginning work in process inventory was $145,000. 4) Ending finished goods inventory was $65,000. 5) Purchases of direct materials were $154,700. 6) Direct materials used were 2.5 times the cost of direct labor. 7) Total manufacturing costs incurred were $246,400, 80% of cost of goods manufactured and $156,000 less than cost of goods sold. Compute: a) finished goods inventory on January 1, 2012 b) work in process inventory on December 31, 2012 c) direct labor incurred d) factory overhead incurred e) direct materials used f) materials inventory on January 1, 2012 g) materials inventory on December 31, 2012 Note to students: The answers are not necessarily calculated in alphabetical order.

For an automotive repair shop, the wages of mechanics would be classified as direct labor cost.

Materials must have which two qualities in order to be classified as direct materials?

A diagram of the operating structure of an organization is called an organization chart.

Williams Company reports production costs for 2015 as follows: Williams Company's product costs for 2015 amount to:

Keeton Company had the following data: Cost of Materials Used $60,000 Direct Labor costs $58,000 Factory Overhead $33,000 Work in Process, beg. $29,000 Work in Process, end. $18,000 Finished Goods,beg. $32,000 Finished Goods, end. $18,000 Show your calculations to determine the Cost of Goods Sold.