Exam 14: Managerial Accounting Concepts and Principles

Direct materials are not usually easily traced to a product.

The following costs are included in a recent summary of data for a company: advertising expense $85,000; depreciation expense - factory building $133,000; direct labor $250,000; direct material used $300,000; factory utilities $105,000; and sales salaries expense $150,000. Determine the dollar amount of overhead costs.

There are many differences between financial and managerial accounting. Identify and explain at least three of these differences.

Another title for goods in process inventory is:

Information for Reedy Manufacturing follows: Beginning raw materials inventory \ 46,800 Beginning goods in process inventory 21,200 Direct labor 81,000 Beginning finished goods inventory 64,000 Total factory overhead 106,000 Raw materials purchased 21,500 Ending raw materials inventory 40,000 Ending goods in process inventory 20,000 Ending finished goods inventory 46,000 Calculate both the cost of goods manufactured and the cost of goods sold for Reedy Manufacturing.

The manufacturing statement is also known as the schedule of manufacturing activities or the schedule of cost of goods manufactured.

Newly completed units are combined with beginning finished goods inventory to make up total ending goods in process inventory.

Financial accounting relies on accepted principles that are enforced through an extensive set of rules and guidelines; on the other hand, managerial accounting systems are flexible.

Whitman Products and Rockland Industries report the following information at December 31: Required: (a) Which company is a manufacturer? Explain. (b) Prepare the Current Asset Section of the Balance Sheet for the manufacturer.

Value-added time divided by cycle time is the ____________________.

A variable cost changes in proportion to changes in the volume in activity.

A manufacturer's inventory that is not completely finished is called __________________.

Indirect materials are accounted for as factory overhead because they are not easily traced to specific units or batches of production.

Managerial accounting is different from financial accounting in that:

The cost of labor that is not clearly associated with specific units or batches of product is called:

What is managerial accounting and how is it used to aid decision makers?

A _________________ cost contains a combination of fixed and variable costs.

A manufacturing firm's cost of goods manufactured is equivalent to a merchandising firm's:

Raw materials that become part of a product and are identified with specific units or batches of a product are called direct materials.

For each item shown below, indicate whether it is a product cost or a period cost, by placing an X in the appropriate column. For each item that is a product cost, also indicate whether it is a direct cost or an indirect cost with respect to a unit of finished product.