Question 1

Product costs are expenditures necessary and integral to finished products.

Accepted Answer

A) True 
 B)False  True

Question 2

What is the cycle time for a manufacturer? What does it reveal about the manufacturing process?

Accepted Answer

Cycle time is defined as process time + inspection time + move time + wait time. Essentially, cycle time is a measure of how efficient the manufacturer's operations are. Process time is the only value-added component of cycle time. The other three elements are non-value-added in nature. Companies strive to reduce non-value-added time to improve their cycle efficiency.

Question 3

Manufacturers usually have three inventories: raw materials, goods in process, and finished goods.

Accepted Answer

A) True 
 B)False  True

Question 4

Which of the following represents the correct formula for calculating cycle time for a manufacturer?

Accepted Answer

A)  Process time + inspection time - move time - wait time. 
B)  Process time - inspection time + move time + wait time. 
C)  Process time + inspection time + move time + wait time. 
D)  Process time - inspection time - move time - wait time. 
E)  Process time + inspection time + move time - wait time. 
A)  Process time + inspection time - move time - wait time. 
B)  Process time - inspection time + move time + wait time. 
C)  Process time + inspection time + move time + wait time. 
D)  Process time - inspection time - move time - wait time. 
E)  Process time + inspection time + move time - wait time.

Question 5

The series of activities that add value to a company's products or services is called a value chain.

Accepted Answer

A) True 
 B)False

Question 6

Juliet Corporation has accumulated the following accounting data for the year:   The cost of goods manufactured for the year is:

Accepted Answer

A)  $200. 
B)  $1,000. 
C)  $5,000. 
D)  $6,400. 
E)  $8,200. 
A)  $200. 
B)  $1,000. 
C)  $5,000. 
D)  $6,400. 
E)  $8,200.

Question 7

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 _________________.

Accepted Answer

$12,500 ($

Question 8

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:

Accepted Answer

A)  Administrative expenses. 
B)  Nonmanufacturing costs. 
C)  Sunk costs. 
D)  Factory overhead. 
E)  Preproduction costs. 
A)  Administrative expenses. 
B)  Nonmanufacturing costs. 
C)  Sunk costs. 
D)  Factory overhead. 
E)  Preproduction costs.

Question 9

An approach to managing inventories and production operations such that units of materials and products are obtained and provided only as they are needed is called:

Accepted Answer

A)  Continuous improvement. 
B)  Customer orientation. 
C)  Just-in-time manufacturing. 
D)  Theory of constraints. 
E)  Total quality management. 
A)  Continuous improvement. 
B)  Customer orientation. 
C)  Just-in-time manufacturing. 
D)  Theory of constraints. 
E)  Total quality management.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Managerial accounting provides financial and nonfinancial information to an organization's managers and other internal decision makers.

Accepted Answer

A) True 
 B)False

Question 12

The concept of total quality management focuses on continuous improvement.

Accepted Answer

A) True 
 B)False

Question 13

_______________ is the deliberate misuse of the employer's assets for the employee's personal gain.

Accepted Answer

The answer of _______________ is the deliberate misuse of the...

Question 14

Costs may be classified by many different cost classifications.

Accepted Answer

A) True 
 B)False

Question 15

Information for Gifford, Inc., as of December 31 follows. Prepare a manufacturing statement for the year ended December 31.

Accepted Answer

The answer of Information for Gifford, Inc., as of December...

Question 16

What is the main difference between the income statement of a manufacturer and that of a merchandiser?

Accepted Answer

In the calculation of cost of goods sold

Question 17

Which of the following represents the correct formula for calculating cost of goods manufactured?

Accepted Answer

A)  Direct materials used + direct labor + factory overhead + beginning goods in process + ending goods in process. 
B)  Direct materials used + direct labor + factory overhead + beginning goods in process - ending goods in process. 
C)  Direct materials used + direct labor + factory overhead - beginning goods in process + ending goods in process. 
D)  Direct materials used + direct labor + factory overhead - beginning goods in process - ending goods in process. 
E)  Direct materials used + direct labor - factory overhead + beginning goods in process - ending goods in process. 
A)  Direct materials used + direct labor + factory overhead + beginning goods in process + ending goods in process. 
B)  Direct materials used + direct labor + factory overhead + beginning goods in process - ending goods in process. 
C)  Direct materials used + direct labor + factory overhead - beginning goods in process + ending goods in process. 
D)  Direct materials used + direct labor + factory overhead - beginning goods in process - ending goods in process. 
E)  Direct materials used + direct labor - factory overhead + beginning goods in process - ending goods in process.

Question 18

The model whose goal is to eliminate waste while satisfying the customer and providing a positive return to the company is the __________________.

Accepted Answer

The answer of The model whose goal is to eliminate...

Question 19

Using the information below for Talking Toys, Inc., determine cost of goods manufactured for the year:

Accepted Answer

A)  $13,000. 
B)  $44,500. 
C)  $57,500. 
D)  $94,500. 
E)  $52,000. 
A)  $13,000. 
B)  $44,500. 
C)  $57,500. 
D)  $94,500. 
E)  $52,000.

Question 20

Explain what is meant by the "lean business model" and why many businesses have adopted it.

Accepted Answer

The lean business model is a model whose

Exam 18: Managerial Accounting Concepts and Principles

Product costs are expenditures necessary and integral to finished products.

What is the cycle time for a manufacturer? What does it reveal about the manufacturing process?

Manufacturers usually have three inventories: raw materials, goods in process, and finished goods.

Which of the following represents the correct formula for calculating cycle time for a manufacturer?

The series of activities that add value to a company's products or services is called a value chain.

Juliet Corporation has accumulated the following accounting data for the year: The cost of goods manufactured for the year is:

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:

An approach to managing inventories and production operations such that units of materials and products are obtained and provided only as they are needed is called:

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

Managerial accounting provides financial and nonfinancial information to an organization's managers and other internal decision makers.

The concept of total quality management focuses on continuous improvement.

_______________ is the deliberate misuse of the employer's assets for the employee's personal gain.

Costs may be classified by many different cost classifications.

Information for Gifford, Inc., as of December 31 follows. Prepare a manufacturing statement for the year ended December 31.

What is the main difference between the income statement of a manufacturer and that of a merchandiser?

Which of the following represents the correct formula for calculating cost of goods manufactured?

The model whose goal is to eliminate waste while satisfying the customer and providing a positive return to the company is the __________________.

Using the information below for Talking Toys, Inc., determine cost of goods manufactured for the year:

Explain what is meant by the "lean business model" and why many businesses have adopted it.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Time Value of Money

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