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Exam 16: Introduction to Managerial Accounting

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Question 111

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Period costs are the ________.

A) product costs that must be paid in the accounting period in which they are incurred.
B) operating costs that are expensed in the accounting period in which they are incurred.
C) costs related to production of products.
D) same as manufacturing overhead costs.

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Question 112

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Identify each cost as a period cost or a product cost. -Delivery expense

A) Period cost
B) Product cost

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Question 113

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Grant's Ironhorse Company manufactures model railroad cars. At the end of October, 2019 the accounting records showed the following: $\begin{array} { | l | r | r | } \hline \text { Inventories: } & { \text { Beginning } } & { \text { Ending } } \\\hline \text { Direct Materials } & \$ 10,000 & \$ 5,000 \\\hline \text { Work-in-Process } & 15,000 & 20,000 \\\hline \text { Finished Goods } & 0& 5,800 \\\hline \text { Other Information: } & & \\\hline \text { Direct Materials Purchases } & &40,000\\\hline \text { Plant maintenance services } & & 6,800 \\\hline \text { Plant supervisor's salary } & & 31,500 \\\hline \text { Sales salaries } & &12,700 \\\hline \text { Delivery costs } & & 3,100 \\\hline \text { Sales revenue } & & 236,000\\\hline \text { Utilities for plant } & &10,500 \\\hline \text { Rent on plant } & & 23,000 \\\hline \text { Advertising } & &8,000\\\hline \text { Direct labor } & & 30,000 \\\hline\end{array}$ (a) Prepare a schedule of cost of goods manufactured for Grant's Ironhorse Company and (b) Prepare an income statement for Grant's Ironhorse Company for the year ended October 31, 2019

Financial accounting prepares reports for internal purposes, whereas managerial accounting provides information to external stakeholders.

Costs are transferred from the balance sheet to the income statement as cost of goods sold when ________.

Fire Cat, Inc. selected cost data for the year are shown below: $\begin{array} { | l | r | } \hline \text { Cost of Goods Manufactured } & \$ 145,500 \\\hline \text { Work-in-Process Inventory, Jan. 1 } & 19,500 \\\hline \text { Work-in-Process Inventory, Dec. 31 } & 22,000 \\\hline \text { Direct Materials Used } & 18,600 \\\hline\end{array}$ What is the total of manufacturing costs incurred by Fire Cat, Inc. during the year?

In a manufacturing plant, indirect materials costs from lubricants and cleaning fluids are product costs.

Repair and maintenance costs of vehicles used to deliver products to customers are product costs.

Match each term with its correct definition. -This role requires managers to look to the future.

Which of the following would be considered a product cost for a manufacturing company?

In a manufacturing company, wages and benefits of assembly line workers are included in manufacturing overhead.

The managerial role that involves the day-to-day running of the business is the ________.

Which of the following statements is true of the flow of product and period costs for a manufacturer?

Crabapples, Inc. purchases and sells boxes of dried fruit. The following information summarizes its operating activities for the year: $\begin{array} { | l | r | } \hline \text { Selling Expenses } & \$ 10,000 \\\hline \text { Merchandise Inventory on December 31 } & 32,000 \\\hline \text { Merchandise Inventory on January 1 } & 46,000 \\\hline \text { Purchases of merchandise } & 82,500 \\\hline \text { Rent for store } & 12,700 \\\hline \text { Sales commissions } & 7100 \\\hline \text { Sales revenue } & 168,000 \\\hline\end{array}$ What is the cost per box of dry fruits if Crabapples sold 4000 boxes of dry fruit during the year? (Round your answer to the nearest cent.)

Viva, Inc. has provided the following information for the year: $\begin{array} { | l | r | } \hline \text { Cost of Goods Manufactured } & \$ 1,261,000 \\\hline \text { Beginning Balance - Finished Goods Inventory } & 99,000 \\\hline \text { Ending Balance - Finished Goods Inventory } & 85,000 \\\hline\end{array}$ What is the cost of goods sold?

Which of the following will most likely be considered an indirect material cost for a bakery?

A diagram that shows the relationships between departments and divisions, and the managers that are responsible for each section is called a(n) ________.

For a manufacturer, rent paid for an office building is an example of a period cost.

Which of the following statements is true of financial accounting?

You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company's bonds. Which of the IMA standards appears to have been violated?