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Exam 16: Management Accounting: a Business Partner

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Question 41

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In comparison with a financial statement prepared in conformity with generally accepted accounting principles,a managerial accounting report is more likely to:

A) Be used by decision makers outside of the business organization.
B) Focus upon the operating results of the most recently completed accounting period.
C) View the entire organization as the reporting entity.
D) Be tailored to the specific needs of an individual decision maker.

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Question 42

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The cost of the employee who installs the leather on the seats of a new automobile would be considered:

A) Manufacturing overhead.
B) Indirect labor.
C) Direct material.
D) Direct labor.

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Question 43

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All three inventory accounts (raw materials,work in process,and finished goods)are considered current assets.

The James Company has incurred the following costs of production: Direct Materials $350,000 Direct Labor $475,000 Manufacturing Overhead $722,000 Selling and Administrative Costs $256,000 The James Company prime costs are $606,000. Prime costs = Direct Materials $350,000 + Direct Labor $475,000 = $825,000

The set of linked activities and resources needed to create and deliver a product or service to the customer is

Product cost vs.period cost Briefly define the terms product cost and period cost.Explain why the distinction between these two types of costs is important.

A debit balance in the Direct Labor account represents a liability for wages payable.

Which of the following costs would not be considered part of the manufacturing overhead of a chemical plant?

The accountant for Eric's Plumbing Equipment Company recently made a journal entry consisting of a debit to Work in Process and a credit to Raw Materials Inventory.This entry recorded:

Accounting terminology Listed below are nine technical accounting terms introduced or emphasized in this chapter: Each of the following statements may (or may not)describe one of these technical terms.In the space provided,indicate the accounting term described,or answer "None" if the statement does not correctly describe any of the terms. ____ (a)The account that is debited when the Work in Process Inventory account is credited. ____ (b)A term describing any manufacturing cost that can be traced conveniently and directly to the various types of products being manufactured. ____ (c)Costs that are charged directly to expense accounts at the time that the costs are incurred. ____ (d)The category of manufacturing cost that would include the cost of tires used in the manufacture of automobiles. ____ (e)An account which has a balance that is increased by manufacturing costs incurred during the period and decreased by the cost of finished goods manufactured. ____ (f)The category of manufacturing cost that includes the salaries of plant guards,supervisors,and maintenance personnel. ____ (g)A term describing all three categories of manufacturing costs.

In a manufacturing company,the cost of goods sold is equal to:

The cost of finished goods manufactured will exceed the cost of goods sold whenever:

The completion of a computer by First Wireless,Inc.would require a debit to which of the following accounts?

Schedule of cost of finished goods manufactured The accounting records of Hogan Handle Co.include the following information about the company's manufacturing costs and inventories for the month of March 2015: Complete the following Schedule of Cost of Finished Goods Manufactured for the year ended March 31,2015:

The following information is for the Harding Company for 2015: Required: (1)What is the cost of materials purchased? (2)What is the cost of goods sold? (3)What is gross profit? (4)What is net profit?

When direct materials are applied to the production process,materials inventory is debited and work in process is credited.

Manufacturing overhead is a term used to describe all manufacturing costs other than direct materials and direct labor.

Management accounting encompasses the design and use of accounting information systems inside the company to achieve the company's objectives.

As units are completed,their cost is transferred from the Work in Process Inventory account to the Finished Goods Inventory account.

Which of the following is not a characteristic of managerial accounting?