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Exam 16: Managerial Accounting Concepts and Principles

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Question 101

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A report analyzing the dollar savings of purchasing new equipment to speed up the production process is a managerial accounting report.

A) True
B) False

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Question 102

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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

E) A) and D)
F) None of the above

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Question 103

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Direct costs can be specifically traced to a cost object.

Taylor Industries had a fire and some of its accounting records were destroyed. Available information is presented below for the year ended December 31. $\begin{array} { | l | l | } \hline \text { Materials inventory, December } 31 & \$ 15,000 \\\hline \text { Direct materials purchased } & 28,000 \\\hline \text { Direct materials used } & 22,900 \\\hline \text { Cost of goods manufactured } & 135,000 \\\hline\end{array}$ Additional information: Factory overhead is 150% of direct labor cost Finished goods inventory decreased by $18,000 during the year Work in process inventory increased by $12,000 during the year Calculate: a) Materials inventory, January 1 b) Direct labor cost c) Factory overhead incurred d) Cost of goods sold

Bartel Corporation produces bar stools for restaurants. For each of the following, indicate whether the cost would typically be considered direct or indirect cost for the cost object given. -The factory supervisor's salary for the bar stool factory

A staff department has no direct authority over a line department.

Managerial accounting provides useful information to managers on product costs.

The cost of wages paid to employees directly involved in the manufacturing process in converting materials into finished products is classified as

Which of the following costs are conversion costs?

A plant manager's salary is

The following are some of the costs incurred by Cupcake Company. Identify them as either: -Baker's wages

Compute conversion costs given the following data: Direct Materials, $347,500; Direct Labor, $196,300; Factory Overhead, $187,900; and Selling Expenses, $45,290.

Match the items below for a bakery to the type of cost a-d) . -Sprinkles for decoration indirect material)

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?

Which of the following is not true in regards to direct materials for a bakery?

Davis Manufacturing Company had the following data: $\begin{array} { | l | l | l | } \hline & \text { January 1 } & \text { December } 31 \\\hline \text { Accounts receivable } & \$ 27,000 & \$ 33,000 \\\hline \text { Materials inventory } & 22,500 & 6,000 \\\hline \text { Work in process inventory } & 70,200 & 48,000 \\\hline \text { Finished goods inventory } & 3,000 & 15,000 \\\hline\end{array}$ Collections on account were $625,000. Cost of goods sold was 68% of sales. Direct materials purchased amounted to $90,000. Factory overhead was 300% of the cost of direct labor. Compute: a) Sales revenue all sales were on account)b) Cost of goods sold c) Cost of goods manufactured d) Direct labor used e) Direct materials incurred f) Factory overhead incurred

Identify the following costs as a) direct materials, b) direct labor, or c) factory overhead for a lawn mower manufacturer. 1. Wheels 2. Depreciation on worker's tools 3. Wages of assemblers 4. Grease for wheel axles

Goods that are part way through the manufacturing process, but not yet complete, are referred to as materials inventory.

Managers use managerial information to evaluate performance of a company's operation.

The following information is taken from the financial records of Gunner Manufacturing: Cost of materials used $45,000 Direct labor costs 48,000 Factory overhead 39,000 Work in process, beg. 18,000 Work in process, end. 28,000 What is cost of goods manufactured?