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Ch. 18 MC

Which of the following statements Is false
There is no overlap between financial and managerial accounting
Which of the following is not associated with managerial accounting?
Must rely on estimates and forecasts
In order to be useful managers, managerial accounting reports should possess all of the following except:
Be prepared in accordance with generally accepted accounting principles
Which of the following is most associated with financial accounting?
Prepared in accordance with GAAP
What term is used to describe the process of monitoring operating results and comparing actual results with the expected results?
controlling
All of the following would most likely be on the controllers staff except:
Investments and shareholder relations managers
Accounting designed to meet the needs of decision makers inside the business is
managerial accounting
Term used too describe the process of developing the organizations objectives and translating those into courses of action?
Planning
Which of the following is not a characteristic of useful managerial accounting reports?
GAAP- Adhering
Who are the individuals charged with the responsibility for directing the day-to-day operations of a business?
Managers
The primary goal of managerial accounting is to provide information to
Management
What is the primary criterion for the preparation of managerial accounting reports?
Manager needs
All of the following employees hold line positions in Facebook except
vice president of finance
Which of the following are basic phases of the management process?
planning and controlling
Which of the following is the principle reason for preparing managerial accounting reports?
usefulness to management
In most business organizations, the chief management accountant is called the
controller
Managerial accounting reports are
prepared according to management needs
Conversion costs are
Factory Overhead and Direct Labor
The following are all product costs except
sales and administrative expenses
If the cost of a direct material is a small portion of total production cost, it may be classified as part of
factory overhead cost
Materials must have which two qualities in order to be classified as direct materials?
They must be an integral part of the finished product and be a significant portion of the total product cost
Goods that are partially completed by a manufacturer are
work in process inventory
What term refers to the cost of changing direct materials into a finished manufactured product?
conversion cost
All of the following are examples of indirect labor except
machine operators
The cost of wages paid to employees directly involved in the manufacturing process in converting materials into finished products is classified as
direct labor cost
All of the following could be considered a direct material except
1)
glue

2)
steel

3)
lumber

4)
fabric

Glue
Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as
factory overhead cost
Which of the following costs are conversion costs?
direct labor cost and factory overhead cost
The Darwin Company reports the following information:

Sales $76,500
Direct materials used 7,300
Depreciation on factory equipment 4,700
Indirect labor 5,900
Direct labor 10,500
Factory rent 4,200
Factory utilities 1,200
Sales salaries expense 15,600
Office salaries expense 8,900
Indirect materials 1,200

Product Costs are:

$35,000
The cost of a manufactured product generally consists of which of the following costs?
direct labor cost, direct materials cost, and factory overhead cost
Prime costs are
direct materials and direct labor
Another term for factory overhead is
factory burden
Which of the following is an example of direct materials cost for an automobile manufacturer?
cost of interior upholstery
Which of the following is not a factory overhead cost?
materials used directly in the manufacturing process of the product
An example of a period cost is
advertising expense
A product cost is
expensed in the period the product is sold
Period costs include
operating costs that are shown on the income statement in the period in which they are incurred
Factory overhead includes
ndirect labor and indirect materials
Insurance expense incurred on a factory building would be treated as a
product cost
Which of the following is not true in regards to direct materials for a bakery?
Paper cupcake liners, that become part of the product, must be accounted for as direct materials.
Which of the following is an example of direct labor cost for a cell phone manufacturer?
cost of wages of assembly worker
Indirect labor and indirect materials are classified as
factory overhead and product costs
A plant manager’s salary is
an indirect cost
Direct labor and direct materials are
product costs and expensed when the goods are sold
Indirect costs incurred in a manufacturing environment that cannot be traced directly to a product are treated as
product costs and expensed when the goods are sold
Rent expense on a factory building would be treated as a(n)
Product Cost
Product costs
appear on both the income statement and balance sheet
Which of the following is not a prime cost?
plant janitor’s wages
Which of the following is part of factory overhead cost?
depreciation of factory equipment and machines
Which of the following items would not be classified as part of factory overhead?
direct labor used
Which of the following manufacturing costs is an indirect cost of producing a product?
oil lubricants used for factory machinery
Given the following data:
?

Beginning raw materials inventory
$30,000

Materials purchased
65,000

Ending raw materials inventory
40,000

?What is the amount of raw materials used?

$55,000
Costs on the income statement for both a merchandiser and a manufacturer would be
operating expenses
Finished goods inventory is reported on the
balance sheet as a current asset
All of the following would be reported on the balance sheet as a current asset except
factory overhead
What is the purpose of the statement of cost of goods manufactured?
to determine the amounts transferred to finished goods
Which of the following accounts will be found on the income statement?
Cost of Goods Sold
Which of the following are reported on the income statement as part of cost of goods?
cost of goods manufactured
Cost of goods sold for a manufacturer equals cost of goods manufactured plus
beginning finished goods inventory less ending finished goods inventory
Which of the following will not be found on the balance sheet of a manufacturing company?
cost of goods sold
Work in process inventory increased by $20,000 during the current year. Cost of goods manufactured was $180,000. Total manufacturing costs incurred are
$200,000
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?
$288,000

COGM = 42000/ (1-40%) + 260000 – 42000 = 288000

Cost of goods manufactured is equal to
total manufacturing costs plus beginning work in process inventory less ending work in process inventory
On the income statement of a manufacturing company, what replaces purchases in the cost of goods sold section of a retail company?
cost of goods manufactured
A company manufactured 50,000 units of a product at a cost of $450,000. It sold 45,000 units at $15 each. The gross profit is
$270,000

Gross Profit= sales – cogs

******

Beginning work in process is equal to
cost of goods manufactured plus ending work in process minus manufacturing costs incurred during the current period
A company sells goods for $150,000 that cost $54,000 to manufacture. Which statement is true?
Question options:

1)
The company will recognize sales on the balance sheet of $150,000.

2)
The company will recognize $96,000 gross profit on the balance sheet.

3)
The company will decrease finished goods by $54,000.

4)
The company will increase finished goods by $54,000

The company will decrease finished goods by $54,000.
Managers used managerial information for all of the following except
to evaluate the company’s stock performance
Managerial accountants could prepare all of the following reports except
an annual report for external regulators such as the SEC
Which of the following would be least likely to be considered a managerial accounting report?
a statement of stockholders’ equity

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