Q&A Hero

Q: The primary goal of managerial accounting is to provide information to a. investors b. creditors c. management d. external auditors

Q: A company used $35,000 of direct materials, incurred $73,000 in direct labor cost, and had $114,000 in factory overhead costs during the period. If beginning and ending work in process inventories were $28,000 and $32,000, respectively, the cost of goods manufactured was a. $218,000 b. $226,000 c. $190,000 d. $222,000

Q: Which of the following is part of factory overhead cost? a. sales commissions b. depreciation of factory equipment and machines c. depreciation of salesperson's vehicle d. direct materials used

Q: The cost of wages paid to employees directly involved in the manufacturing process in converting materials into finished products is classified as a a. factory overhead cost b. direct labor cost c. miscellaneous cost d. direct materials cost

Q: Which of the following statements is false? a. There is no overlap between financial and managerial accounting. b. Managerial accounting sometimes relies on past information. c. Managerial accounting does not need to conform to GAAP. d. Financial accounting must conform to GAAP.

Q: Which of the following is not an example of a sustainable business activity? a. use of wind turbines to generate energy b. crop rotation c. expanded public transportation systems d. reduction of employee idle time

Q: The cost of goods sold for Michaels Manufacturing in the current year was $233,000. The January 1 finished goods inventory balance was $31,600, and the December 31 finished goods inventory balance was $24,200. Cost of goods manufactured during the period was a. $233,000 b. $225,600 c. $288,800 d. $240,400

Q: Which of the following items would not be classified as part of factory overhead? a. direct labor used b. amortization of manufacturing patents c. production supervisors' salaries d. factory supplies used

Q: If the cost of a material is a small portion of total production cost, it may be classified as part of a. direct labor cost b. selling and administrative costs c. miscellaneous costs d. factory overhead cost

Q: Which of the following would least likely be considered a managerial accounting report? a. a report to analyze potential efficiencies and savings for the purchase of new production equipment b. a schedule of total manufacturing costs incurred c. a statement of cost of goods manufactured d. a statement of stockholders equity

Q: Which of the following may not be a factory overhead cost? a. materials used directly in the manufacturing process of the product b. insurance on factory equipment c. salaries of production supervisors d. property tax on factory building

Q: Managers use managerial accounting information for all of the following except to a. evaluate the companys stock performance b. analyze the performance of a companys operations c. support long-term planning decisions d. determine the cost of manufacturing a product

Q: Insurance expense incurred on a factory building would be treated as a a. direct cost b. period cost c. product cost d. selling cost

Q: Which of the following is an example of direct materials cost for an automobile manufacturer? a. cost of oil lubricants for factory machinery b. cost of wages of assembly worker c. salary of production supervisor d. cost of interior upholstery

Q: Factory overhead includes a. factory rent and direct labor b. direct materials and direct labor c. indirect materials and direct materials d. indirect labor and indirect materials

Q: Period costs include 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

Q: Who are the individuals charged with the responsibility for directing the day-to-day operations of a business? a. investors b. managers c. shareholders d. customers

Q: A company manufactured 50,000 units of a product at a cost of $450,000. It sold 45,000 units at $15 each. The gross profit is a. $750,000 b. $240,000 c. $600,000 d. $270,000

Q: Cost of goods manufactured is equal to a. total manufacturing costs plus ending materials inventory less beginning materials inventory b. cost of goods sold plus beginning work in process inventory less ending work in process inventory c. total manufacturing costs plus ending work in process inventory less beginning work in process inventory d. total manufacturing costs plus beginning work in process inventory less ending work in process inventory

Q: Given the following data:Cost of materials used $45,000Direct labor costs48,000Factory overhead39,000Work in process, beginning28,000Work in process, ending18,000Finished goods, beginning28,000Finished goods, ending18,000What is the cost of goods sold?a. $152,000b. $142,000c. $10,000d. $128,000

Q: What term is used to describe the process of developing the organizations objectives and translating those into courses of action?a. supervisingb. planningc. improvingd. decision making

Q: Costs on the income statement for both a merchandiser and a manufacturer would be a. operating expenses b. direct materials c. direct labor incurred d. cost of goods manufactured

Q: All of the following are product costs except a. direct materials b. sales and administrative expenses c. direct labor d. factory overhead

Q: What term is used to describe the process of monitoring operating results and comparing actual results with the expected results? a. improving b. controlling c. directing d. planning

Q: All of the following would be reported on the balance sheet as a current asset except a. factory overhead b. materials inventory c. finished goods inventory d. work in process inventory

Q: A product cost is a. expensed in the period in which it is manufactured b. shown with current liabilities on the balance sheet c. shown with operating expenses on the income statement d. expensed in the period the product is sold

Q: Which of the following is an example of a factory overhead cost? a. repair and maintenance cost on an administrative building b. factory heating and lighting cost c. insurance premiums on salespersons' automobiles d. president's salary

Q: Which of the following is not true regarding direct materials for a bakery? a. Flour and sugar would probably be direct materials. b. Eggs would probably be a direct material. c. Oil to lubricate factory machines would not be a direct material. d. Paper cupcake liners, that become part of the product, must be accounted for as direct materials.

Q: Another term for factory overhead is a. surplus b. period cost c. supervisory cost d. factory burden

Q: Product costs a. appear only on the balance sheet b. appear only on the income statement c. are expensed as costs are incurred for direct labor, direct material, and factory overhead d. appear on both the income statement and balance sheet

Q: Finished goods inventory is reported on the a. income statement as a period cost b. balance sheet as a long-term asset c. balance sheet as a current asset d. income statement as revenue

Q: The following information is taken from the financial records of Gunner Manufacturing:Cost of materials used $45,000Direct labor costs48,000Factory overhead39,000Work in process, beginning18,000Work in process, ending28,000What is the cost of goods manufactured?a. $178,000b. $132,000c. $122,000d. $142,000

Q: Work in process inventory increased by $20,000 during the current year. Cost of goods manufactured was $180,000. Total manufacturing costs incurred are a. $198,000 b. $160,000 c. $189,000 d. $200,000

Q: Smith Company reports the following information:Cost of goods manufactured$68,250Direct materials used 27,000Direct labor incurred 25,000Work in process inventory, January 1 11,000Factory overhead is 75% of the cost of direct labor. Work in process inventory on December 31 isa. $16,250b. $8,500c. $18,750d. $13,500

Q: Conversion costs are a. direct materials and direct labor b. direct materials and factory overhead c. factory overhead and direct labor d. direct materials and indirect labor

Q: At the beginning of the current year, Grant Companys work in process inventory account had a balance of $30,000. During the year, $68,000 of direct materials were used in production, and $66,000 of direct labor costs were incurred. Factory overhead for the year amounted to $90,000. Cost of goods manufactured is $230,000. The balance in Work in Process Inventory on December 31 is a. $24,000 b. $44,000 c. $66,000 d. $36,000

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

Q: Work in process inventory on December 31 is $42,000. Work in process inventory decreased by 40% during the year. Total manufacturing costs incurred amount to $260,000. What is the cost of goods manufactured? a. $232,000 b. $302,000 c. $288,000 d. $190,000

Q: Prime costs are a. direct materials and factory overhead b. direct materials and direct labor c. direct labor and factory overhead d. period costs and factory overhead

Q: Replacing light fixtures with energy-efficient lighting is an example of which eco-efficiency measure? a. material use efficiency b. energy efficiency c. waste efficiency d. fuel efficiency

Q: Rent expense on a factory building would be treated as a a. period cost b. product cost c. direct cost d. direct materials cost

Q: Jensen Companys period costs are a. $345,000 b. $250,000 c. $400,000 d. $175,000

Q: Which of the following costs are conversion costs? a. direct labor cost and factory overhead cost b. direct materials cost and direct labor cost c. factory overhead cost d. direct materials cost and factory overhead cost Use the information provided for Jensen Company to answer the questions that follow. Jensen Company Direct materials used $345,000 Direct labor incurred 250,000 Factory overhead incurred 400,000 Operating expenses 175,000

Q: Goods that are partially completed by a manufacturer are a. merchandise inventory b. work in process inventory c. finished goods inventory d. materials inventory

Q: Which of the following is most associated with financial accounting? a. can have both objective and subjective information b. can be prepared periodically, or as needed c. prepared in accordance with GAAP d. can be prepared for the entity or segment

Q: Direct labor and direct materials are a. product costs and expensed when the goods are sold b. product costs and expensed when incurred c. period costs and expensed when incurred d. period costs and expensed when the goods are sold

Q: The controller's staff often consists of several management accountants. All of the following would most likely be on the controller's staff except a. general accountants b. budget analysts c. investments and shareholder relations managers d. cost accountants

Q: The plant managers salary in a manufacturing business would be considered an indirect cost. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

Q: Controlling is the process of monitoring operating results and comparing actual results with the expected results. a. True b. False

Q: Materials and labor costs that are not directly traced to the finished product are classified as cost of goods sold. a. True b. False

Q: The statement of cost of goods manufactured is an extension of the income statement for a manufacturing company. a. True b. False

Q: Managerial accounting uses only past data in reports to aid management in the decision-making process. a. True b. False

Q: Factory overhead cost is sometimes referred to as factory burden. a. True b. False

Q: Indirect labor and indirect materials would be part of factory overhead. a. True b. False

Q: Managerial accounting information is for external as well as internal stakeholders. a. True b. False

Q: Depreciation on factory plant and equipment is an example of factory overhead cost. a. True b. False

Q: The vice presidents of production and sales and the controller hold line positions in most large organizations. a. True b. False

Q: Sustainability practice focuses on short-term solutions to sustain company profits. a. True b. False

Q: Operating expenses are product costs and are expensed when the product is sold. a. True b. False

Q: Managerial accounting reports must be useful to the user of the information. a. True b. False

Q: Goods that are part way through the manufacturing process, but not yet complete, are referred to as materials inventory. a. True b. False

Q: Only the value of the inventory that is sold will appear on the income statement. a. True b. False

Q: Planning is the process of monitoring operating results and comparing actual results with the expected results. a. True b. False

Q: Managers use managerial accounting information to evaluate performance of a companys operation. a. True b. False

Q: Conversion cost is the combination of direct materials cost and factory overhead cost. a. True b. False

Q: Managerial accounting information includes both historical and estimated data. a. True b. False

Q: On the balance sheet for a manufacturing business, inventories are categorized as materials, work in process, and finished goods. a. True b. False

Q: For an automotive repair shop, the wages of mechanics would be classified as direct labor cost. a. True b. False

Q: Conversion cost is the combination of direct labor cost and factory overhead cost. a. True b. False

Q: Indirect costs are specifically traced to a cost object. a. True b. False

Q: Manufacturers use machinery and labor to convert direct materials into finished products. a. True b. False

Q: In most business organizations, the chief accountant is called the treasurer. a. True b. False

Q: A staff department has no direct authority over a line department. a. True b. False

Q: Prime costs are the combination of direct materials and direct labor costs. a. True b. False

Q: Factory overhead is an example of a product cost. a. True b. False

Q: The controller's staff consists of management accountants responsible for systems and procedures, general accounting, budgets, taxes, and cost accounting. a. True b. False

Q: Prime costs are the combination of direct labor costs and factory overhead costs. a. True b. False

Q: Conversion costs are the combination of direct labor, direct material, and factory overhead costs. a. True b. False

Q: The Sustainability Accounting Standards Board (SASB) standards are required, just as GAAP standards are required. a. True b. False

Q: For a construction contractor, the wages of carpenters would be classified as factory overhead cost. a. True b. False