Question 1

Davis Manufacturing Company had the following data:?? $\begin{array}{lrr}&\text { January } 1&\text { December } 31\
\text { Accounts receivable } & \$ 27,000 & \$ 33,000 \
\text { Materials inventory } & 22,500 & 6,000 \
\text { Work in process inventory } & 70,200 & 48,000 \
\text { Finished goods inventory } & 3,000 & 15,000
\end{array}$ Collections on account were $625,000.Cost of goods sold was 68% of sales.Direct materials purchased amounted to $90,000.Factory overhead was 300% of the cost of direct labor.
Compute:
(a)Sales revenue 
(all sales were on account)
(b)Cost of goods sold
(c)Cost of goods manufactured
(d)Direct materials used
(e)Direct labor incurred
(f)Factory overhead incurred

Accepted Answer

The answer of Davis Manufacturing Company had the following data:??...

Question 2

For each of the following costs, classify them as either:
-Materials not traceable to specific products

Accepted Answer

A) Direct costs 
B) Indirect costs 
C) Neither direct nor indirect costs

Question 3

On the balance sheet for a manufacturing business, the cost of direct materials, direct labor, and factory overhead are categorized as either materials inventory, work in process inventory, or finished goods inventory.

Accepted Answer

A) True 
 B)False

Question 4

Bartel Corporation produces bar stools for restaurants. For each of the following, indicate whether the cost would typically be considered a direct or indirect cost for the cost object given.
-Lubricants used on the bar stool manufacturing equipment

Accepted Answer

A) Direct 
B) Indirect

Question 5

Period costs include

Accepted Answer

A)  current assets on the balance sheet 
B)  current liabilities on the balance sheet 
C)  operating costs that are shown on the income statement when products are sold 
D)  operating costs that are shown on the income statement in the period in which they are incurred

Question 6

What is the purpose of the statement of cost of goods manufactured?

Accepted Answer

A)  to determine the ending materials inventory 
B)  to determine the ending work in process inventory 
C)  to determine the amount transferred to finished goods 
D)  All of these choices

Question 7

Indirect costs can be specifically traced to a cost object.

Accepted Answer

A) True 
 B)False

Question 8

In order to be useful to managers, managerial accounting reports should possess all of the following characteristics except

Accepted Answer

A)  provide objective measures of past operations and subjective estimates about future decisions 
B)  be prepared in accordance with generally accepted accounting principles 
C)  be provided at any time management needs information 
D)  be prepared to report information for any unit of the business to support decision making

Question 9

Indirect labor and indirect materials would be part of factory overhead.

Accepted Answer

A) True 
 B)False

Question 10

For each of the following costs, classify them as either:
-Salespersons' salaries

Accepted Answer

A) Direct costs 
B) Indirect costs 
C) Neither direct nor indirect costs

Question 11

What is the primary criterion for the preparation of managerial accounting reports?

Accepted Answer

A)  relevance of the reports 
B)  manager needs 
C)  timing of the reports 
D)  cost of the reports

Question 12

Controlling is the process of monitoring operating results and comparing actual results with the expected results.

Accepted Answer

A) True 
 B)False

Question 13

Match the items below for a bakery to the type of cost (a-d). Answers may be used more than once.
-Sprinkles for decoration 
(indirect material)

Accepted Answer

A) Direct materials 
B) Direct labor 
C) Factory overhead 
D) Nonmanufacturing cost
Challenging

Question 14

If the cost of a direct material is a small portion of total production cost, it may be classified as part of

Accepted Answer

A)  direct labor cost 
B)  selling and administrative costs 
C)  miscellaneous costs 
D)  factory overhead cost

Question 15

Which of the following is an example of direct labor cost for a cell phone manufacturer?

Accepted Answer

A)  cost of oil lubricants for factory machinery 
B)  cost of wages of assembly worker 
C)  salary of plant supervisor 
D)  cost of phone components

Question 16

Manufacturers use machinery and labor to convert direct materials into finished products.

Accepted Answer

A) True 
 B)False

Question 17

For each of the following, indicate whether the cost would typically be considered a product or period cost for the cost object given.
-Depreciation on store equipment

Accepted Answer

A) Product 
B) Period

Question 18

A staff department has no direct authority over a line department.

Accepted Answer

A) True 
 B)False

Question 19

Match each description to the appropriate term (a-d). Answers may be used more than once.
-Advertising expense

Accepted Answer

A) Direct materials 
B) Selling and administrative expense 
C) Factory overhead 
D) Direct labor

Question 20

A company sells goods for $150,000 that cost $54,000 to manufacture. Which of the following statements is true?

Accepted Answer

A)  The company will recognize sales on the balance sheet of $150,000. 
B)  The company will recognize $96,000 gross profit on the balance sheet. 
C)  The company will decrease finished goods by $54,000. 
D)  The company will increase finished goods by $54,000.

Exam 18: Introduction to Managerial Accounting

For each of the following costs, classify them as either: -Materials not traceable to specific products

On the balance sheet for a manufacturing business, the cost of direct materials, direct labor, and factory overhead are categorized as either materials inventory, work in process inventory, or finished goods inventory.

Bartel Corporation produces bar stools for restaurants. For each of the following, indicate whether the cost would typically be considered a direct or indirect cost for the cost object given. -Lubricants used on the bar stool manufacturing equipment

Period costs include

What is the purpose of the statement of cost of goods manufactured?

Indirect costs can be specifically traced to a cost object.

In order to be useful to managers, managerial accounting reports should possess all of the following characteristics except

Indirect labor and indirect materials would be part of factory overhead.

For each of the following costs, classify them as either: -Salespersons' salaries

What is the primary criterion for the preparation of managerial accounting reports?

Controlling is the process of monitoring operating results and comparing actual results with the expected results.

Match the items below for a bakery to the type of cost (a-d) . Answers may be used more than once. -Sprinkles for decoration (indirect material)

If the cost of a direct material is a small portion of total production cost, it may be classified as part of

Which of the following is an example of direct labor cost for a cell phone manufacturer?

Manufacturers use machinery and labor to convert direct materials into finished products.

For each of the following, indicate whether the cost would typically be considered a product or period cost for the cost object given. -Depreciation on store equipment

A staff department has no direct authority over a line department.

Match each description to the appropriate term (a-d) . Answers may be used more than once. -Advertising expense

A company sells goods for $150,000 that cost $54,000 to manufacture. Which of the following statements is true?