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Exam 18: Managerial Accounting Concepts and Principles

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Question 101

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List the four goals of an internal control system.

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An internal control system is the polici...

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Question 102

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The concept of total quality management focuses on continuous improvement.

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Question 103

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The Work in Process Inventory account is found only in the ledgers of merchandising companies.

What does the days' sales in raw materials inventory ratio reveal?

The following cost items relate to the Henning Company. Classify each cost as a variable cost or a fixed cost by placing an X in the appropriate column. Each cost should be evaluated in terms of the volume of units of finished products produced. Also indicate with an X for each item if it is a product cost or a period cost.

Match the following terms with the appropriate definition.

________ inventory consists of completed products ready for sale by a manufacturer.

What are prime costs? What are conversion costs?

Costs may be classified by many different cost classifications.

Explain what is meant by the "lean business model" and why many businesses have adopted it.

The following information relates to the manufacturing operations of the Abbra Publishing Company for the year: $\begin{array}{llr} & \text {Beginning}& \text {Ending}\\ \text {Raw materials inventory } & \$ 547,000 & \$ 610.100\\\end{array}$ The raw materials used in manufacturing during the year totaled $1,018,000. Raw materials purchased during the year amount to:

Using the information below, calculate gross profit for the period: $\begin{array}{lr}\text { Sales revenues for the period }&\$1,304,000\\\\\text { Operating expenses for the period } & 239,000 \\\text { Finished Goods Inventory, January } 1 & 36,000 \\\text { Finished Goods Inventory, December } 31 & 41,000 \\\text { Cost of goods manufactured for the period } & 540,000\end{array}$

Using the information below for Singing Dolls, Inc., determine cost of goods manufactured for the year: $\begin{array} { l | r } \hline \text { Work in Procest, January 1 } & 50,000 \\\hline \text { Work in Process, December 31 } & 37,000 \\\hline \text { Total Factory overhead } & 5,500 \\\hline \text { Direct materials used } & \$ 12,500 \\\hline \text { Direct labor used } & 26,500\end{array}$

Indirect costs cannot be easily and cost-beneficially traced to a single cost object.

Beginning finished goods inventory plus cost of goods manufactured minus ending finished goods inventory equals cost of goods sold.

Duncan Crafts manufactures specialty key chains for tourist attractions. On January 1, the firm had 300 souvenir attraction disks used in the production of the chains that cost $3 each; and 600 completed key chains that cost $6 each. During the year Duncan Crafts purchased 1,500 souvenir disks costing $3 each and produced 1,100 key chains. Compute the total cost of raw materials inventory at December 31.

Using the information below, calculate net income for the period: $\begin{array}{lr}\text { Sales revenues for the period }&\$1,304,000\\\\\text { Operating expenses for the period } & 239,000 \\\text { Finished Goods Inventory, January } 1 & 36,000 \\\text { Finished Goods Inventory, December } 31 & 41,000 \\\text { Cost of goods manufactured for the period } & 540,000\end{array}$

Control is the process of setting goals and determining ways to achieve them.

Romeo Corporation has accumulated the following accounting data for the year: $\begin{array}{ll}\text { Finished goods inventory, January 1 } & \$ 3,200 \\\text { Finished goods inventory, December } 31 & 4,000 \\\text { Total cost of goods sold } & 14,200\end{array}$ The cost of goods manufactured for the year is:

Prime costs consist of direct materials and direct labor.