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Exam 16: Introduction to Managerial Accounting

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Question 51

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Which of the following describes the cost of goods manufactured?

A) the cost of the goods that were sold during the period
B) the total cost of all goods that were completed,or partially completed during the period
C) the cost of those goods that were completed during the period
D) the total costs in inventory at the end of the period

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Question 52

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Which of the following is one of the key standards of ethical practice published by the Institute of Management Accountants (IMA) ?

A) social responsibility
B) environmental sensitivity
C) technicality
D) confidentiality

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Question 53

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Beckett,Inc.reports the following cost information for March: $\begin{array}{|l|r|}\hline\text { Cost of Goods Manufactured } & \$ 75,000 \\\hline \text { Manufacturing Overhead } & 19,000 \\\hline \text { Finished Goods Inventory, March 1 } & 5000 \\\hline \text { Finished Goods Inventory, March 31 } & 2000\\\hline \text { Work-in-Process Inventory, March 1 } & 9980 \\\hline \text { Work-in-Process Inventory, March 31 } & 1160 \\\hline \text { Direct Materials Used } & 25,400\\\hline\end{array}$ What is the amount of direct labor incurred by Beckett,Inc.in March?

Which of the following is the primary focus of managerial accounting?

Merchandising companies,like service companies,do not use a Cost of Goods Sold account.

In a manufacturing company,the salary of the sales staff is an example of a period cost.

For each of the following,indicate whether the statement relates to managerial accounting (MA)or financial accounting (FA): $\begin{array} { | l | l | } \hline \textbf { Statement } & \begin{array} { c } \textbf { Applies to } \\\textbf { MA or FA }\end{array} \\\hline \begin{array} { l } \text { How reports will affect employee behavior is a } \\\text { concern. }\end{array} & \\\hline \text { Summary reports are prepared primarily on the } \\\text { company as a whole, usually on a quarterly or annual } \\\text { basis. } & \\\hline \text { Relevant information and focus on the future. } & \\\hline \text { Primary users include investors, creditors, and } & \\\text { government authorities. } & \\\hline \text { There is no requirement to follow GAAP. } & \\\hline\end{array}$

Which of the following will be included in manufacturing overhead costs?

Five Seasons is a merchandiser of packed foods.The company provides the following information for the year: $\begin{array} { | l | r | } \hline \text { Sales Revenue } & \$ 145,000 \\\hline \text { Cost of Goods Sold } & 64,000 \\\hline \text { Operating Expenses } & 67,000 \\\hline \text { Net Income } & 14,000 \\\hline \text { Number of Units Sold } & 29,000\\\hline\end{array}$ How much was the unit cost per item of product sold? (Round your answer to the nearest cent.)

Crabapples,Inc.purchases and sells boxes of dried fruit.The following information summarizes its operating activities for the year: $\begin{array} { | l | r | } \hline \text { Selling Expenses } & \$ 10,000 \\\hline \text { Merchandise Inventory on December 31 } & 32,000 \\\hline \text { Merchandise Inventory on January 1 } & 46,000 \\\hline \text { Purchases of merchandise } & 82,500 \\\hline \text { Rent for store } & 12,700 \\\hline \text { Sales commissions } & 7100 \\\hline \text { Sales revenue } & 168,000 \\\hline\end{array}$ What is the cost per box of dry fruits if Crabapples sold 4000 boxes of dry fruit during the year? (Round your answer to the nearest cent.)

Garrett Corporation provided the following information for the year: $\begin{array}{|l|r|}\hline \text { Beginning Balance - Work-in-Process Inventory } & \$ 27,000 \\\hline \text { Ending Balance - Work-in-Process Inventory } & 56,000 \\\hline \text { Beginning Balance - Direct Materials } & 83,000 \\\hline \text { Ending Balance - Direct Materials } & 60,000 \\\hline \text { Purchases - Direct Materials } & 360,000 \\\hline \text { Direct Labor } & 471,000 \\\hline \text { Indirect Labor } & 18,000 \\\hline \text { Depreciation on Factory Plant and Equipment } & 25,000 \\\hline \text { Plant Utilities and Insurance } & 271,000\\\hline\end{array}$ What was the amount of direct materials used in production during the year?

Vermont State,Inc.used $153,000 of direct materials and incurred $63,000 of direct labor costs during the year.Indirect labor amounted to $270,000,while indirect materials used totaled $53,000.Other operating costs pertaining to the factory included utilities of $135,500; maintenance of $70,260; repairs of $53,400; depreciation of $133,000; and property taxes of $74,640.There was no beginning or ending finished goods inventory,but Work-in-Process inventory began the year with a $5000 balance and ended the year with a $7400 balance. How much is the cost of goods manufactured?

Fontana Manufacturing provided the following information for the month ended March 31: $\begin{array}{|l|r|}\hline\text { Sales Revenue } & \$ 26,000 \\\hline \text { Beginning Finished Goods Inventory } & 8000 \\\hline \text { Ending Finished Goods Inventory } & 13,500 \\\hline \text { Cost of Goods Manufactured } & 15,600\\\hline\end{array}$ Compute cost of goods available for sale.

Which of the following correctly describes the accounting for indirect labor costs?

Manufacturing overhead includes indirect manufacturing costs,such as insurance and depreciation on the factory building.

The United States Bureau of Labor Statistics predicts that the manufacturing sector will account for the majority of projected job growth from 2014-2024.

Which of the following is a focus of managerial accounting?

The cost of goods manufactured includes selling expenses,administrative expenses,and manufacturing overhead.

In a manufacturing company,wages and benefits of assembly line workers are included in manufacturing overhead.

Belstone,Inc.is a merchandiser of stone ornaments.It sold 15,000 units during the year.The company has provided the following information: $\begin{array} { | l | r | } \hline \text { Sales Revenue } & \$ 525,000 \\\hline \text { Purchases (excluding Freight In) } & 347,000 \\\hline \text { Selling and Administrative Expenses } & 36,500 \\\hline \text { Freight In } & 15,500 \\\hline \text { Beginning Merchandise Inventory } & 42,000 \\\hline \text { Ending Merchandise Inventory } & 55,500 \\\hline\end{array}$ How much is the gross profit for the year?