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Exam 16: Managerial Accounting Concepts and Principles

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Question 1

True/False

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The statement of cost of goods manufactured is an extension of the income statement for a manufacturing company.

A) True
B) False

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Question 2

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The cost of wages paid to employees directly involved in converting materials to finished product is classified as direct labor cost.

A) True
B) False

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Question 3

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Materials must have which two qualities in order to be classified as direct materials?

For each of the following, indicate whether the cost would typically be considered product or period cost for the cost object given. -Tires for the bicycles

The following are some of the costs incurred by Cupcake Company. Identify them as either: -Sprinkles for decoration indirect material)

All of the following employees hold line positions in Facebook except

Differentiate between a line department and a staff department.​

In most business organizations, the chief management accountant is called the controller.

Accounting designed to meet the needs of decision makers inside the business is

An example of a period cost is

Direct labor and direct materials are

In most business organizations, the chief accountant is called the treasurer.

Classify the following costs as direct, indirect, or neither: $\begin{array} { | l | l | } \hline \text { a) } & \text { labor for machine maintenance } \\\hline \text { b) } & \text { factory equipment depreciation } \\\hline \text { c) } & \text { materials not traceable to specific products } \\\hline \text { d) } & \text { office equipment depreciation } \\\hline \text { e) } & \text { materials traceable to specific products } \\\hline \text { f) } & \text { insurance expired on admini strative facilities } \\\hline \text { g) } & \text { product assembly labor incurred } \\\hline \text { h) } & \text { administrative office salaries } \\\hline \text { i) } & \text { salespersons' salaries } \\\hline \text { j) } & \text { utilities on factory building } \\\hline \text { k) } & \text { putilities on administrative facilities } \\\hline\end{array}$

Allen Company used $71,000 of direct materials and incurred $37,000 of direct labor costs during the current year. Indirect labor amounted to $2,700 while indirect materials used totaled $1,600. Other operating costs pertaining to the factory included utilities of $3,100, maintenance of $4,500, supplies of $1,800, depreciation of $7,900, and property taxes of $2,600. There was no beginning or ending finished goods inventory, but work in process inventory began the year with a $5,500 balance and ended the year with a $7,500 balance. Prepare a statement of cost of goods manufactured.

Conversion costs are

Jensen Company reports the following: $\begin{array} { | l | l | } \hline \text { Direct materials used } & \$ 345,000 \\\hline \text { Direct labor incurred } & 250,000 \\\hline \text { Factory overhead incurred } & 400,000 \\\hline \text { Operating expenses } & 175,000 \\\hline\end{array}$ -Jensen Company's product costs are

For each of the following, indicate whether the cost would typically be considered product or period cost for the cost object given. -Electricity costs to run the factory

Labor costs that are directly traceable to the product are part of factory overhead.

Controlling deals with choosing goals and deciding how to achieve them.

Managerial accounting reports must be prepared according to generally accepted accounting principles.