Test bank for managerial accounting 1st edition by oliver

D A decrease in work in process means that cost of goods manufactured was less than the manufacturing costs incurred?. An increase in the work in process account during the year means th

Test Bank for Managerial Accounting 1st Edition by Oliver

Managerial accounting’s focus is to provide information for internal planning and control

Which of the following is NOT an objective of management accounting?

1 A) To provide information to business managers to assist them in planning for their business

2 B) To provide information to business managers to assist them in controlling their business

3 C) To provide information to shareholders to assist them with their investment

decisions

4 D) To assist business managers with respect to providing a return to the owners of thebusiness

Which of the following statements is incorrect?

1 A) The primary users of management accounting are the company’s managers

2 B) Management accounting information is used to help managers plan and control their operations

3 C) Management accounting information does not require an external audit

4 D) Management accounting’s financial reports are restricted by generally accepted accounting principles

Which of the following types of accounting is designed to meet the needs of decision-makers inside a company?

1 A) Financial accounting

2 B) Tax accounting

3 C) Management accounting

4 D) Auditing

Which statement is correct?

1 A) Management accounting uses the cash basis and financial accounting uses the accrual basis to record transactions

2 B) Management accounting uses the cash basis to record transactions

3 C) Financial accounting uses the cash basis to record transactions

4 D) Both management accounting and financial accounting use the accrual basis to record transactions

Which of the following statements is incorrect?

1 A) Management uses accounting information to determine the cost of products and services

2 B) Management uses accounting information to plan and control business operations

3 C) Management uses accounting information to report the company's financial

position and results of operations to external parties

4 D) Financial accounting is more relevant to use for internal decision making purposes than is management accounting

Which of the following statements about financial accounting is correct?

1 A) Financial accounting helps investors make decisions

2 B) Financial accounting reports do not influence investor behavior

3 C) Financial provides detailed reports on parts of the company

4 D) Financial accounting provides help in planning and controlling operations

Which of the following statements about managerial accounting is correct?

1 A) Managerial accounting reports are audited annually by Certified Public

Accountants

2 B) Managerial accounting reports help investors make decisions

3 C) Managerial accounting reports provide detailed information on parts of a company

4 D) Managerial accounting reports must follow Generally Accepted Accounting

principles (GAAP)

Which of the following reports must be audited by certified public accountants?

1 A) Annual financial reports

2 B) Federal tax returns

3 C) State tax returns

4 D) Management accounting reports

During the past century, many developed economies have shifted their focus from a service economy to a manufacturing economy

3 C) Supply chain management

4 D) Total quality management

Which of the following describes a system in which suppliers deliver materials at the time they are needed and finished units are completed when customer orders need to be filled?

1 A) Supply chain management

2 B) Just-in-time (JIT)

3 C) Enterprise resource planning

4 D) Total quality management

What is total quality management?

1 A) A philosophy of supplying customers with superior products and services

2 B) An exchange of information with suppliers and customers to create efficient and effective processes

3 C) A software system that integrates a company's functions, departments and data into a single system

4 D) A system in which a company produces what it needs when it needs it

What is the name given to software systems that can integrate all of a company's worldwide functions, departments and data into a single system?

1 A) All in One Software

2 B) Enterprise Resource Planning

3 C) Total Integrated Software

4 D) Just-in-time

Period costs, such as direct materials, are expensed during the period that they were incurred

3 C) Factory janitorial costs

4 D) The purchase of raw materials

Which of the following are period costs?

1 A) Current assets on the balance sheet

2 B) Costs incurred and expensed during the accounting period

3 C) Costs related to the manufacture of products

4 D) Current liabilities on the balance sheet

Which of the following is a characteristic of a service company?

1 A) It transforms raw materials into finished goods

2 B) It makes a product

3 C) It does not have tangible products intended for sale

4 D) It has a single category of inventory

Which of the following is an example of a period cost?

1 A) Advertising expense

2 B) Depreciation on factory equipment

3 C) Indirect materials

4 D) Property taxes on plant

Which of the following could be found on the income statement of a service company?

1 A) Rent expense

2 B) Cost of goods manufactured

3 C) Cost of goods sold

4 D) Manufacturing overhead

Which of the following statements is correct?

1 A) A decrease in finished goods means that cost of goods manufactured is greater than cost of goods sold

2 B) A decrease in work in process means that cost of goods sold is greater than cost of goods manufactured

3 C) A decrease in raw materials implies that the cost of materials used in production exceeds the cost of the materials purchased.

4 D) A decrease in work in process means that cost of goods manufactured was less than the manufacturing costs incurred

Which of the following is an inventory account for a merchandise company?

1 A) Work in process inventory

2 B) Manufacturing overhead inventory

3 C) Merchandise inventory

4 D) Finished goods inventory

Which of the following costs would appear on the income statements for both a merchandiser and a manufacturer?

1 A) Direct labor incurred

2 B) Cost of goods manufactured

3 C) Direct materials used

4 D) Operating expenses

A merchandiser's purchases are equivalent to what for a manufacturer?

1 A) Materials inventory

2 B) Cost of goods manufactured

3 C) Work in process inventory

4 D) Cost of goods sold

The following information pertains to Bright Toy Company's operating activities for 2009 The company sells light box toys and sold 10,000 units in 2009 Purchases $ 126,000 Selling and Administrative Expenses 90,000 Merchandise inventory, 1/1/2009 14,000 Merchandise inventory, 12/31/2009 10,000 Sales Revenue 250,000 What is the cost of goods available for sale for 2009?

1 A) $120,000

2 B) $130,000

3 C) $140,000

4 D) $136,000

The following information pertains to Bright Toy Company's operating activities for 2009 The company sells light box toys and sold 10,000 units in 2009 Purchases $ 126,000 Selling and Administrative Expenses 90,000 Merchandise inventory, 1/1/2009 14,000 Merchandise inventory, 12/31/2009 10,000 Sales Revenue 250,000 What is the operating income for 2009?

1 A) 48%

2 B) 56%

3 C) 36%

4 D) 100%

The following information pertains to Bright Toy Company's operating activities for 2009 The company sells light box toys and sold 10,000 units in 2009 Purchases $ 126,000 Selling and Administrative Expenses 90,000 Merchandise inventory, 1/1/2009 14,000 Merchandise inventory, 12/31/2009 10,000 Sales Revenue 250,000 What is the cost per light box sold in 2009?

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

An increase in the work in process account during the year means that cost of goods

manufactured was greater than the manufacturing costs incurred during the year

1 True

2 False

The costs of indirect materials cannot easily be traced to the manufactured product and is

therefore a component of manufacturing overhead

Which of the following statements does NOT describe today’s business environment?

1 A)The business environment is shifting toward a service economy

2 B) Global competition requires businesses to adjust their business strategies

3 C) E-commerce has allowed business managers the opportunity to slow down the their manufacturing and delivery times

4 D) Enterprise resource planning systems have emerged to assist business manager with respect to

5 integrating their worldwide functions

A service company’s:

1 A) expenses are all period costs

2 B) expenses are all product costs

3 C) income statement includes gross margin

4 D) balance sheet includes finished goods inventory

A merchandising company’s:

1 A) expenses include both period costs and product costs

2 B) expenses include only product costs

3 C) expenses include only period costs

4 D) income statement doesn’t include gross margin

Which of the following is NOT a part of manufacturing overhead?

1 A) Indirect materials

2 B) Indirect labor

3 C) Factory insurance

4 D) Depreciation on delivery vehicles

Which of the following is NOT a product cost?

1 A) Indirect labor

2 B) Factory overhead

3 C) Indirect materials

4 D) Depreciation of corporate headquarters

Period costs do NOT include which of the following?

1 A) Sales commissions

2 B) Factory janitorial costs

3 C) Insurance on delivery vehicles

4 D) Advertising costs

Inventory accounts for a manufacturer include which of the following?

1 A) Materials, work in process, and finished goods

2 B) Work in process, direct labor, and finished goods

3 C) Merchandise, materials, and finished goods

4 D) Work in process, materials, and manufacturing overhead

Goods that are partially completed by a manufacturer are referred to as:

1 A) Materials inventory

2 B) Finished goods inventory

3 C) Merchandise inventory

4 D) Work in process inventory

Which of the following is an example of direct labor?

1 A) Wages of assembly line personnel

2 B) Salary of vice president of production

3 C) Wages of factory security

4 D) Salary of production manager

Which of the following best defines direct materials?

1 A) Used to determine total inventoriable product costs

2 B) Cannot be separately and conveniently traced through the manufacturing process

to finished goods

3 C) Are not part of the finished product

4 D) Used to determine total manufacturing overhead

Manufacturing overhead includes which of the following?

1 A) Indirect labor and indirect materials

2 B) Indirect materials and direct materials

3 C) Direct materials and direct labor

4 D) Factory rent and direct labor

All of the following are examples of manufacturing overhead except for which of the

following?

1 A) Utilities incurred in the factory

2 B) Insurance expired on factory equipment

3 C) Wages of assembly line workers

Wright Company reports production costs for 2009 as follows: Direct materials used $375,000 Direct labor incurred $250,000 Manufacturing overhead incurred $400,000 Operating expenses

$145,000 How much are Wright Company's inventoriable product costs for 2009?

1 A) $925,000

2 B) $605,000

3 C) $975,000

4 D) $1,025,000

Which of the following equals cost of goods manufactured?

1 A) Cost of goods sold plus beginning work in process inventory less ending work in process inventory

2 B) Total manufacturing costs plus ending materials inventory less beginning materials inventory

3 C) Total manufacturing costs plus beginning work in process inventory less ending work in process inventory

4 D) Total manufacturing costs plus ending work in process inventory less beginning work in process inventory

Beginning work in process is equal to:

1 A) ending work in process plus manufacturing costs incurred during the current period

2 B) manufacturing costs incurred during the current period minus ending work in

Fitness Company reports the following data for 2009, its first year of operations: Cost of goods manufactured $440,000 Work in process inventory, Dec 31, 2009 130,000 Direct materials used 115,000 Manufacturing overhead incurred 160,000 Finished goods inventory, Dec 31, 2009 75,000 What are the total manufacturing costs to be accounted for?

At the beginning of 2008, the Taylor Company's work in process inventory account had a balance

of $30,000 During 2008, $68,000 of direct materials were used in production, and $66,000 of direct labor costs were incurred Manufacturing overhead in 2008 amounted to $90,000 The cost

of goods manufactured was $220,000 in 2008 What is the balance in work in process inventory

commissions 8,000 What is the manufacturing overhead for 2009?

1 A) $47,000

2 B) $50,000

3 C) $38,000

4 D) $46,000

Village Company's selected cost data for 2009 are shown below: Cost of goods manufactured

$145,200 Work in process inventory, Jan 1, 2009 18,500 Work in process inventory, Dec 31,

2009 22,500 Direct materials used 15,800 What are total manufacturing costs incurred by Village Company in 2009?

1 A) $149,200

2 B) $158,300

3 C) $139,800

4 D) $117,100

Village Company's selected cost data for 2009 are shown below: Cost of goods manufactured

$145,200 Work in process inventory, Jan 1, 2009 18,500 Work in process inventory, Dec 31,

2009 22,500 Direct materials used 15,800 Assuming direct labor is 60% of manufacturing

overhead, what is the amount of direct labor incurred by Village Company in 2009?

1 A) $50,025

2 B) $62,550

3 C) $41,700

4 D) $83,400

Harrison Company reports the following cost information for August: Cost of goods manufactured

$135,800 Finished goods inventory, Aug 1 30,200 Finished goods inventory, Aug 31 35,300 Work in process inventory, Aug 1 22,500 Work in process inventory, Aug 31 18,500 Direct materials used 25,300 Direct labor incurred in August amounted to 150% of manufacturing overhead in August What is cost of goods sold for August?

1 A) $154,500

2 B) $125,100

3 C) $130,700

4 D) $139,800

Harrison Company reports the following cost information for August: Cost of goods manufactured

$135,800 Finished goods inventory, Aug 1 30,200 Finished goods inventory, Aug 31 35,300 Work in process inventory, Aug 1 22,500 Work in process inventory, Aug 31 18,500 Direct materials used 25,300 Direct labor incurred in August amounted to 150% of manufacturing overhead in August What is the amount of direct labor incurred by Harrison Company in

August?

1 A) $131,800

2 B) $61,944

3 C) $49,556

4 D) $63,900

A company used $35,000 of direct materials, incurred $73,000 in direct labor cost, and $114,000

in manufacturing overhead costs during the period If beginning and ending work in process inventories were $28,000 and $21,000 respectively What is the cost of goods

1 A) $67,000

2 B) $85,000

3 C) $61,000

4 D) $80,000

Cost of goods manufactured during 2009 was $240; work in process inventory on December 31,

2009 was $50 Work in process inventory during 2009 decreased 60% What are total

manufacturing costs incurred during 2009?