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Exam 1: Managerial Accounting Concepts and Principles

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Question 61

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

A) Materials statement.
B) Managerial statement.
C) Schedule of cost of goods manufactured.
D) Merchandise schedule.
E) General-purpose statement.

F) C) and E)
G) A) and B)

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Question 62

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Which of the following statements is correct concerning the Days' sales in raw materials inventory?

A) A measure of how long it takes raw materials to be used in production.
B) The ratio is not useful for a manufacturer.
C) Reveals how many times a company turns over its raw materials inventory in a period.
D) Most companies generally prefer a higher number of days' sales in raw materials inventory.
E) Is calculated by taking the Raw materials used/Average raw materials inventory.

F) A) and E)
G) A) and D)

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Question 63

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Factory overhead costs may include all of the following except:

Product costs can be classified as one of three types: direct materials, direct labor, or overhead.

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

Costs that flow directly to the income statement as expenses are called:

One of the usual differences between financial and managerial accounting is the timeliness of the information reported.

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

Policies and procedures used by management to monitor and control business activities are known as ________.

Just-in-time manufacturing is a system that acquires inventory and produces product only when needed for an order.

Craigmont Company's direct materials costs are $3,000,000, its direct labor costs total $7,000,000, and its factory overhead costs total $5,000,000. Its prime costs total:

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

The following information is available for the year ended December 31: $\begin{array} { | l | r | } \hline \text { Beginning raw materials inventory } & \$ 21,500 \\\text { Raw materials purchases } & 74,000 \\\hline \text { Ending raw materials inventory } & 23,000 \\\hline \text { Office supplies expense } & 2,400 \\\hline\end{array}$ The amount of raw materials used in production for the year is:

The concept of total quality management focuses on continuous improvement.

Marv's Furniture and Fixtures produces seats for movie theaters. Listed below are selected cost items for the seat production. Classify each cost as either fixed or variable, and either a product or a period cost by placing an x in the appropriate boxes.

Information for the Deuce Manufacturing Company follows. Compute the cost of goods manufactured for this company. $\begin{array} { | l | r | } \hline \text { Beginning raw materials inventory } & \$ 53,200 \\\hline \text { Beginning work in process, inventory } & 78,400 \\\hline \text { Ending raw materials inventory } & 58,100 \\\hline \text { Ending work in process, inventory } & 98,000 \\\hline \text { Direct labor } & 149,800 \\\hline \text { Total factory overhead } & 105,000 \\\hline \text { Raw material purchases } & 210,000 \\\hline\end{array}$

The focus of managerial accounting information is on the organization as a whole.

Direct labor refers to the cost of the workers whose efforts are directly related to specific units of product.

The Langston Company manufactures coats. Costs for February were as follows: $\begin{array} { | l | r | } \hline \text { Direct materials } & \$ 19,650 \\\hline \text { Direct labor } & 15,21 \\\hline \text { Factory insurance } & 950 \\\hline \text { Sales commissions } & 4,700 \\\hline \text { Corporate executive salaries } & 5,500 \\\hline \text { Factory supervisor salary } & 3,500 \\\hline \text { Indirect materials } & 1,920\\\hline \end{array}$ Required: Calculate the total manufacturing cost for February.

Goods a company acquires to use in making products are called: