Exam 15: Managerial Accounting Concepts and Principles

Conversion costs are the combination of direct labor, direct material and factory overhead costs.

Goods that are partway through the manufacturing process, but not yet complete, are referred to as materials inventory.

Managerial accounting reports must be useful to the user of the information.

A company sells goods for $150,000 that cost $60,000 to manufacture. Which statement(s) are true?

Depreciation on factory plant and equipment is an example of factory overhead cost.

Prime costs consists of direct materials, indirect materials, and direct labor.

Which of the following is the principle reason for preparing managerial accounting reports?

Conversion cost is the combination of direct materials cost and factory overhead cost.

Factory overhead includes:

Identify the following costs as (a) prime cost, (b) conversion cost, (c) or both for a cake factory. 1. _____ Frosting 2. _____ Wages of the baker 3. _____ Sprinkles for the topping (considered an indirect material) 4. _____ Depreciation on oven

All of the following are ways that managers use managerial information except

The Sharpe Company reports the following information for 2015: Determine product costs for 2015.

Labor costs that are directly traceable to the product are part of factory overhead.

Which of the following is an example of direct materials cost for an automobile manufacturer?

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

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

All of the following employees hold line positions in Anthea Electric EXCEPT:

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

Finished goods inventory is reported on the:

Use the correct number to designate each item below: 1) direct materials 2) selling and administrative expense 3) factory overhead 4) direct labor