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Managerial Ch 1

Managerial accounting information is generally prepared for

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creditors.
stockholders.
managers.
regulatory agencies.

managers.
Management accountants would not

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be concerned with the impact of cost and volume on profits.
prepare reports primarily for external users.
determine cost behavior.
assist in budget planning.

prepare reports primarily for external users.
Which one of the following would not be classified as manufacturing overhead?

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Insurance on factory building
Indirect materials
Indirect labor
Direct materials

Direct materials
Manufacturing costs include

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direct labor and manufacturing overhead only.
direct materials and direct labor only.
direct materials and manufacturing overhead only.
direct materials, direct labor, and manufacturing overhead.

direct materials, direct labor, and manufacturing overhead.
A manufacturing process requires small amounts of glue. The glue used in the production process is classified as a(n)

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miscellaneous expense.
indirect material.
direct material.
period cost.

indirect material.
Which of the following is not classified as direct labor?

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Wages of supervisors
Bakers in a bakery
Bottlers of beer in a brewery
Copy machine operators at a copy shop

Wages of supervisors
Manufacturing costs that cannot be classified as either direct materials or direct labor are known as

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selling and administrative expenses.
manufacturing overhead.
nonmanufacturing costs.
period costs.

manufacturing overhead.
Which one of the following costs would not be inventoriable?

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Period costs
Factory insurance costs
Indirect materials
Indirect labor costs

Period costs
Which of the following are period costs?

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Direct labor and manufacturing overhead
Selling expenses
Raw materials
Direct materials and direct labor

Selling expenses
For inventoriable costs to become expenses under the matching principle,

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the product must be finished and in stock.
the product to which they attach must be sold.
the product must be expensed based on its percentage-of-completion.
all accounts payable must be settled.

the product to which they attach must be sold.
Kushman Combines, Inc. has $20,000 of ending finished goods inventory as of December 31, 2013. If beginning finished goods inventory was $10,000 and cost of goods sold was $50,000, how much would Kushman report for cost of goods manufactured?

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$70,000
$10,000
$40,000
$60,000

$60,000
Dolan Company’s accounting records reflect the following inventories:

Dec. 31, 2017 Dec. 31, 2016
Raw materials inventory $310,000 $260,000
Work in process inventory 300,000 160,000
Finished goods inventory 190,000 150,000

During 2017, $800,000 of raw materials were purchased, direct labor costs amounted to $670,000, and manufacturing overhead incurred was $640,000.
Dolan Company’s total manufacturing costs incurred in 2017 amounted to

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$2,020,000.
$2,110,000.
$1,920,000.
$2,060,000.

$2,060,000.
Dolan Company’s accounting records reflect the following inventories:

Dec. 31, 2017 Dec. 31, 2016
Raw materials inventory $310,000 $260,000
Work in process inventory 300,000 160,000
Finished goods inventory 190,000 150,000

During 2017, $800,000 of raw materials were purchased, direct labor costs amounted to $670,000, and manufacturing overhead incurred was $640,000.
If Dolan Company’s cost of goods manufactured for 2017 amounted to $1,890,000, its cost of goods sold for the year is

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$1,750,000.
$1,930,000.
$1,850,000.
$2,000,000.

$1,850,000.
Laflin Company reported the following year-end information:

Beginning work in process inventory $1,080,000
Beginning raw materials inventory 300,000
Ending work in process inventory 900,000
Ending raw materials inventory 480,000
Raw materials purchased 960,000
Direct labor 900,000
Manufacturing overhead 720,000

Laflin Company’s cost of goods manufactured for the year is

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$2,220,000.
$2,760,000.
$2,400,000.
$2,580,000.

$2,580,000.
Benson Inc.’s accounting records reflect the following inventories:

Dec. 31, 2016 Dec. 31, 2017
Raw materials inventory $ 80,000 $ 64,000
Work in process inventory 104,000 116,000
Finished goods inventory 100,000 92,000

During 2017, Benson purchased $1,450,000 of raw materials, incurred direct labor costs of $250,000, and incurred manufacturing overhead totaling $160,000.
How much raw materials were transferred to production during 2017 for Benson?

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$1,466,000
$1,450,000
$1,434,000
$1,386,000

$1,466,000
Samson Company reported total manufacturing costs of $320,000, manufacturing overhead totaling $52,000, and direct materials totaling $64,000. How much is direct labor cost?

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$268,000
Cannot be determined from the information provided.
$256,000
$204,000

$204,000
Given the following data for Glennon Company, compute (A) total manufacturing costs and (B) costs of goods manufactured:

Direct materials used $270,000 Beginning work in process $40,000
Direct labor 200,000 Ending work in process 20,000
Manufacturing overhead 250,000 Beginning finished goods 50,000
Operating expenses 350,000 Ending finished goods 30,000

(A) (B)

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$720,000 $700,000

$720,000 $740,000

$740,000 $760,000

$700,000 $740,000

$720,000 $740,000
Given the following data for Harder Company, compute cost of goods manufactured:

Direct materials used $120,000 Beginning work in process $20,000
Direct labor 200,000 Ending work in process 10,000
Manufacturing overhead 180,000 Beginning finished goods 25,000
Operating expenses 175,000 Ending finished goods 15,000

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$500,000
$520,000
$490,000
$510,000

$510,000
Which one of the following does not appear on the balance sheet of a manufacturing company?

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Finished goods inventory
Raw materials inventory
Work in process inventory
Cost of goods manufactured

Cost of goods manufactured
If the cost of goods manufactured is less than the cost of goods sold, which of the following is correct?

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Finished Goods Inventory has increased.
Work in Process Inventory has increased.
Work in Process Inventory has decreased.
Finished Goods Inventory has decreased.

Finished Goods Inventory has decreased.
Direct materials are a

Product
Cost Manufacturing
Overhead Period
Cost

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Yes Yes Yes

No No No

Yes Yes No

Yes No No

Yes No No
Which of the following costs would a computer manufacturer include in manufacturing overhead?

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The cost of the memory chips.
Depreciation on testing equipment.
The cost of the disk drives.
The wages earned by computer assemblers.

Depreciation on testing equipment.
Which of the following costs are classified as a period cost?

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Wages paid to an assembly worker.
Wages paid to a production department supervisor.
Wages paid to a factory custodian.
Wages paid to a cost accountant department supervisor.

Wages paid to a cost accountant department supervisor.

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