Exam 18: Managerial Accounting Concepts and Principles

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.

What is the purpose of the Statement of Cost of Goods Manufactured?

Factory overhead includes all manufacturing costs except direct materials and direct labor.

Costs which are reported on the income statement as part of cost of goods sold are referred to as:

Factory overhead is an example of a product cost.

The primary goal of managerial accounting is to provide information to:

Prime costs are

Factory overhead includes:

A report analyzing how many products need to be sold to cover operating costs is not typically a managerial accounting report.

The cost of goods sold for Heedy manufacturing in 2011 was $233,000. The January 1, 2011, finished goods inventory balance was $31,600, and the December 31, 2011, finished goods inventory balance was $24,200. Cost of goods manufactured during the period was:

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

What is the amount of Raw Materials Used?

Managerial information is for external as well as internal stakeholders.

Which of the following is most associated with financial accounting?

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

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

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

Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as:

Finished goods inventory is reported on the:

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