Exam 14: Managerial Accounting Concepts and Principles

Identify the three categories of manufacturing costs.

An out-of-pocket cost requires a future cash outlay and is relevant for decision making.

A manufacturing company has a beginning finished goods inventory of $14,600, raw material purchases of $18,000, cost of goods manufactured of $32,500, and an ending finished goods inventory of $17,800. The cost of goods sold for this company is:

The following information is available for Talking Toys, Inc. for the current year: Direct materials used \ 12,500 Goods in process, January 1 50,000 Goods in process, December 31 37,000 Total Factory overhead 5,500 Direct labor used 26,500 -The total manufacturing costs incurred during the year were:

Although direct labor and raw materials costs are treated as manufacturing costs and therefore make up part of the finished goods inventory cost, factory overhead is charged to expense as it is incurred because it is a period cost.

The management concept of customer orientation encourages a company to set up its production system to produce large quantities of the same product for all customers.

What is fraud as it relates to the business environment?

Costs that are incurred as part of the manufacturing process but are not clearly associated with specific units of product or batches of production, including all manufacturing costs other than direct material and direct labor costs, are called:

A manufacturer's cost of goods manufactured is the sum of direct materials, direct labor, and factory overhead costs incurred in producing products.

The Goods in Process Inventory account is found only in the ledgers of merchandising companies.

____________________ inventory consists of completed products ready for sale by a manufacturer.

____________________ inventory consists of products in the process of being manufactured but not yet complete.

_____________________ rejects the notions of "good enough" or "acceptable" and challenges employees and managers to continuously experiment with new and improved business practices.

The potential benefit lost by taking a specific action from two or more choices is an _____________________________.

Fraud affects all business.

A _________________ cost does not change in proportion to changes in the volume of activity within the relevant range.

A financial report that summarizes the amounts and types of costs that were incurred in the manufacturing process during the period is a:

Expenditures necessary and integral to the manufacture of finished products are ________________ costs.

Herren, Inc. reported the following data regarding costs and inventories for the current year: beginning goods-in-process inventory, $4,000; beginning finished goods inventory, $2,000; cost of goods manufactured, $11,500; operating expenses, $3,000; ending finished goods inventory, $1,000; ending goods-in-process inventory, $1,500. Cost of goods sold for Herren, Inc. equals ____________________.

The following items for Titus Company are used to compute the cost of goods manufactured and the cost of goods sold. Indicate how each item should be used in the calculations by filling in the blanks with " + " if the item is to be added, "-" if the item is to be subtracted, or "0" if the item is not used in the calculation. The first item is completed as an example.