Finance

Q: The main difference between the cost of goods sold of a manufacturer and a merchandiser is that the merchandiser includes cost of goods manufactured rather than cost of goods purchased.

Q: Manufacturers usually have three inventories: raw materials, work in process, and finished goods.

Q: Selling and administrative expenses are normally period costs.

Q: The sales commission incurred based on units of product sold during the month is an example of a product cost.

Q: Product costs are capitalized as inventory on the balance sheet and period costs are expenses on the income statement.

Q: Product costs can refer to expenditures necessary to finish products and to the administrative support during the time period.

Q: Straight line depreciation, rent and manager salaries are examples of variable costs.

Q: The Institute of Management Accountants (IMA) Statement of Ethical Professional Practice requires that management accountants be competent and act with integrity.

Q: Total quality management and just-in-time manufacturing focus on quality improvement as well as on time customer deliveries.

Q: The management concept of customer orientation motivates a company to spend large amounts on advertising to convince customers to buy the company's standard products.

Q: Just-in-time manufacturing is a system that acquires inventory and produces product only when needed for an order.

Q: The focus of managerial accounting information is on the organization as a whole.

Q: Both financial and managerial accounting affect user's decisions and actions.

Q: Both financial and managerial accounting rely on accepted principles that are enforced through an extensive set of rules and guidelines.

Q: Managerial accounting reports and information are used by external users and financial accounting by internal users.

Q: Managerial accounting is an activity that helps managers determine costs of products and services, plan future activities, and compare actual to planned results.

Q: Waters, Inc. reported the following data regarding costs and inventories for the current year: beginning finished goods inventory, $5,000; cost of goods manufactured, $21,500; ending finished goods inventory, $4,000. Cost of goods sold for Waters, Inc. equals ____________________.

Q: Crane, Inc. reported the following data regarding costs and inventories for the current year: beginning goods-in-process inventory, $4,000; beginning finished goods inventory, $2,000; cost of goods manufactured, $11,500; operating expenses, $3,000; ending finished goods inventory, $1,000; ending goods-in-process inventory, $1,500. Cost of goods sold for Crane, Inc. equals ____________________.

Q: ___________________________ reveals how many times a company uses its raw materials inventory in production during a period.

Q: ___________________________ reveals how much raw materials inventory is available in terms of the number of days' sales.

Q: ____________________ inventory consists of completed products ready for sale by a manufacturer.

Q: ____________________ inventory consists of products in the process of being manufactured but not yet complete.

Q: _____________________ inventory consists of goods a company acquires to use in making products.

Q: A _________________ cost does not change in total in proportion to changes in the volume of activity within the relevant range.

Q: A _________________ cost changes in total in proportion to changes in the volume of activity.

Q: _______________ are beliefs that distinguish right from wrong.

Q: _______________ is the deliberate misuse of the employer's assets for the employee's personal gain.

Q: _____________________ rejects the notions of "good enough" or "acceptable" and challenges employees and managers to continuously experiment with new and improved business practices.

Q: The purpose of managerial accounting information is to help ________________ users make decisions while the purpose of financial accounting is to help _____________ users make decisions.

Q: ____________________ is the process of monitoring planning decisions and evaluating an organization's activities and employees.

Q: ___________________ is the process of setting goals and making plans to achieve them.

Q: ___________________ is an activity that provides financial and nonfinancial information to an organization's managers and other internal decision makers.

Q: Martinez Company makes leather cowboy hats. Each hat requires yard of leather to produce. On December 31, 2014, the company had (a) 75 hats in Finished Goods Inventory and (b) 60 yards of leather at a cost of $12 per yard in Raw Materials Inventory. During 2015, the company purchased 850 more yards of leather at $12 per yard and manufactured 1,600 hats. Determine the unit and dollar amounts of Raw Materials Inventory in leather at December 31, 2015.

Q: Information for Jersey Metalworks as of December 31 follows. Prepare (a) the company's schedule of cost of goods manufactured for the year ended December 31; (b) prepare the company's income statement that reports separate categories for selling and general and administrative expenses. Administrative salaries expense $ 135,000 Depreciation expenseFactory equipment 52,400 Depreciation expenseDelivery vehicles 36,200 Depreciation expenseOffice equipment 24,800 Advertising expense 22,350 Direct labor 268,000 Factory supplies used 12,000 Income taxes expense 91,500 Indirect labor 35,000 Indirect material 24,000 Factory insurance 15,500 Factory utilities 14,000 Factory maintenance 7,500 Inventories Raw materials inventory, January 1 32,000 Raw materials inventory, December 31 28,000 Work in Process inventory, January 1 33,780 Work in Process inventory, December 31 37,460 Finished goods inventory, January 1 56,970 Finished goods inventory, December 31 62,000 Raw materials purchases 325,000 Rent expenseFactory 50,000 Rent expenseOffice space 24,000 Rent expenseSelling Space 24,000 Sales salaries expense 97,500 Sales 1,452,000 Sales discounts 29,000

Q: Information for the Deuce Manufacturing Company follows. Compute the cost of goods manufactured for this company. Beginning raw materials inventory $ 53,200 Beginning work in process, inventory 78,400 Ending raw materials inventory 58,100 Ending work in process, inventory 98,000 Direct labor 149,800 Total factory overhead 105,000 Raw material purchases 210,000

Q: Information for Stanton, Inc., as of December 31 follows. Prepare a schedule of cost of goods manufactured for the year ended December 31. Administrative salaries $ 35,000 Depreciation of factory equipment 25,000 Depreciation of delivery vehicles 6,000 Direct labor 68,000 Factory supplies used 9,000 Finished goods inventory, January 1 57,000 Finished goods inventory, December 31 ? Factory insurance 15,500 Interest expense 12,000 Factory utilities 14,000 Factory maintenance 7,500 Raw materials inventory, January 1 5,000 Raw materials inventory, December 31 4,000 Raw material purchases 125,000 Rent on factory building 25,000 Repairs of factory equipment 11,500 Sales commissions 37,500 Work in Process inventory, January 1 3,500 Work in Process inventory, December 31 2,700

Q: The following items for Neptune Company are used to compute the cost of goods manufactured and the cost of goods sold. Indicate how each item should be used in the calculations by filling in the blanks with "+" if the item is to be added, "-" if the item is to be subtracted, or "0" if the item is not used in the calculation. The first item is completed as an example. Cost of Goods Cost of Goods Manufactured Sold Beginning finished goods inventory ___0___ __+__ Ending finished goods inventory _______ ______ Direct labor _______ ______ Indirect labor _______ ______ Beginning work in process inventory _______ ______ Ending work in process inventory _______ ______ General and administrative expenses _______ ______ Indirect materials _______ ______ Beginning raw materials inventory _______ ______ Ending raw materials inventory _______ ______ Raw material purchases _______ ______ Depreciation of factory building _______ ______ Cost of goods manufactured _______ ______

Q: Compute the ending work in process inventory for a manufacturer with the following information. Raw materials purchased 131,700 Raw materials used in production 65,400 Direct labor used 44,000 Total factory overhead used 101,600 Work in process inventory, beginning of year 32,500 Cost of goods manufactured 212,900

Q: 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.

Q: Use the following information to prepare the schedule of cost of goods manufactured for Graffstone Company for the month ended June 30. Work in Process inventory, May 31 $12,600 Work in Process inventory, June 30 16,500 Direct materials used during June 21,000 Direct labor used during June 31,000 Factory overhead: Indirect material 6,400 Indirect labor 9,200 Factory rent 12,000 Factory depreciation 15,000 Factory utilities 18,400

Q: Information for Eastman Industries is presented below. Compute the cost of goods manufactured. Beginning work in process inventory 21,200 Ending work in process inventory 20,000 Raw materials used in production $46,800 Direct labor 81,000 Total factory overhead 106,000

Q: Information for Underwood Industries is presented below. Compute the cost of goods manufactured. Beginning Ending Raw materials inventory $26,800 30,100 Work in process inventory 41,200 39,000 Finished goods inventory 54,000 53,500 Raw materials purchased 93,500 Direct labor 61,000 Total factory overhead 117,300

Q: Information for Maxim Manufacturing is presented below. Compute both the cost of goods manufactured and the cost of goods sold for Maxim Manufacturing. Beginning raw materials inventory $36,800 Beginning work in process inventory 21,200 Direct labor 81,000 Beginning finished goods inventory 64,000 Total factory overhead 126,000 Raw materials purchased 21,500 Ending raw materials inventory 40,000 Ending work in process inventory 20,000 Ending finished goods inventory 46,000

Q: The Langston Company manufactures coats. Costs for February were as follows: Direct materials $19,650 Direct labor 15,210 Factory insurance 950 Sales commissions 4,700 Corporate executive salaries 5,500 Factory supervisor salary 3,500 Indirect materials 1,920 Required: Calculate the total manufacturing cost for February.

Q: The Tacky Company manufactures staples. Costs for October were direct labor, $84,000; indirect labor, $36,700; direct materials, $55,900; factory maintenance, $4,800; factory utilities, $3,200; and insurance on plant and equipment, $700. What is Tacky Company's factory overhead for October?

Q: Calculate Cost of Goods Sold for the following two companies: Beginning Inventory: LEWIS, INC. MERCER CO. Merchandise $250,000 Finished Goods $550,000 Cost of Goods Purchased 460,000 Cost of Goods Manufactured 688,000 Ending Inventory: Merchandise 128,000 Finished Goods 350,000

Q: A manufacturing company's beginning finished goods inventory was $29,000; cost of goods manufactured was $316,000; and the ending finished goods inventory was $31,000. What is the cost of goods sold for that year?

Q: Thornton Foods bakes and sells 2,000 dozen muffins each week to food service operations. Among the costs are bakers' salaries, $24,000; production management salaries, $16,000; production equipment operating costs, $32,000; and flour and ingredient costs, $15,000. Using this information, compute: (a) prime costs and (b) conversion costs.

Q: Walter Products and Sandburg Industries report the following information at December 31: WALTER SANDBURG Accounts Receivable $41,000 $68,000 Cash 6,000 7,000 Finished Goods Inventory 25,000 Work in Process Inventory 40,000 Merchandise Inventory 48,000 Prepaid Expenses 1,000 2,000 Raw Materials Inventory 21,000 Required: (a) Which company is a manufacturer? Explain. (b) Prepare the Current Asset Section of the Balance Sheet for the manufacturer.

Q: Brotherton Company is a manufacturer of Blu-ray discs. Place each of the following costs in the appropriate column. Product cost Cost item Period cost Direct materials Direct labor Factory overhead a. Factory maintenance salary, $40,000 b. Salary of factory supervisor, $70,000 c. Salary of production worker, $42,000 d. Salary of the company's president, $100,000 e. Television advertising, $25,000 f. Property tax on factory, $15,000 g. Sales commissions, $65,000 h. Depreciation on factory equipment, $17,000 i. Plastic used in the manufacture of the discs, $14,000

Q: 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. Variable or fixed cost? Product or period cost? Cost item Variable Fixed Product Period Executive salary Direct labor Direct materials Depreciation of factory equipment Indirect labor Delivery expense Television advertising Indirect materials

Q: What are the components of the schedule of cost of goods manufactured? Describe each component.

Q: Define fraud and give at least two examples of employee fraud.

Q: Identify and describe the three categories of manufacturing costs.

Q: F; 2. A; 3. B; 4. E; 5. D; 6. H; 7. I; 8. G; 9. J; 10. C

Q: Match the following terms to the appropriate definitions. __________ (1) Prime costs __________ (2) Continuous improvement __________ (3) Raw materials inventory __________ (4) Balanced scorecard __________ (5) Just-in-time manufacturing __________ (6) Work in Process inventory __________ (7) Lean business model __________ (8) Customer orientation __________ (9) Managerial accounting __________(10) Raw materials inventory turnover (a) An idea that rejects the notions of "good enough" or "acceptable" and challenges employees and managers to continually experiment with new and improved business practices. (b) Goods a company acquires to use in making products. (c) Reveals how many times a company uses its raw materials inventory in production during a period. (d) A system that acquires inventory and produces only when needed. (e) Aids in continuous improvement by augmenting financial measures with information on the drivers or indicators of future financial performance along the four dimensions of (1) financial, (2) customer, (3) internal business processes; (4) learning and growth. (f) Expenditures directly associated with the manufacture of finished goods; includes direct materials and direct labor. (g) The idea that employees understand the changing needs and wants of their customers and align their management and operating practices accordingly. (h) Products in the process of being manufactured but not yet complete. (i) A model whose goal is to eliminate waste while satisfying the customer and providing a positive return to the company. (j) An activity that provides financial and nonfinancial information to an organization's managers and other internal decision makers.

Q: G; 2. J; 3. E; 4. H; 5. I; 6. C; 7. A; 8. F; 9. D; 10. B

Q: Match the following terms with the appropriate definition. __________ (1) Direct materials __________ (2) Indirect costs __________ (3) Product costs __________ (4) Prime costs __________ (5) Fixed costs __________ (6) Direct labor __________ (7) Period costs __________ (8) Conversion costs __________ (9) Factory overhead __________ (10) Variable costs (a) Costs that flow directly to the current income statement as expenses. (b) Costs that change in proportion to changes in volume of activity. (c) The efforts of employees who physically convert materials to finished products. (d) Manufacturing expenditures that cannot be separately or readily traced to finished goods. (e) Expenditures necessary and integral to finished products. (f) Expenditures incurred in the process of converting raw materials to finished products; include direct labor and factory overhead. (g) Tangible components of a finished product separately and readily traced through the manufacturing process. (h) Expenditures directly associated with the manufacture of finished products; include direct materials and direct labor. (i) Costs that do not change in total with changes in the volume of activity. (j) Costs that are incurred for the benefit of more than one cost object.

Q: Calculate the cost of goods sold using the following information: Direct materials $298,500 Direct labor 132,000 Factory overhead costs 264,000 General and administrative expenses 85,500 Selling expenses 48,800 Work in Process inventory, January 1 118,500 Work in Process inventory, December 31 125,900 Finished goods inventory, January 1 232,100 Finished goods inventory, December 31 238,700 A.$680,500. B.$701,900. C.$687,100. D.$674,600. E.$772,600.

Q: Calculate the cost of goods manufactured using the following information: Direct materials $298,500 Direct labor 132,000 Factory overhead costs 264,000 General and administrative expenses 85,500 Selling expenses 48,800 Work in Process inventory, January 1 118,500 Work in Process inventory, December 31 125,900 Finished goods inventory, January 1 232,100 Finished goods inventory, December 31 238,700 A.$680,500. B.$701,900. C.$687,100. D.$674,600. E.$772,600.

Q: If the cost of the beginning work in process inventory is $60,000, direct materials cost is $350,000, direct labor cost is $216,000, and overhead cost is $319,000, and the ending work in process inventory is $55,000, calculate the cost of goods manufactured: A.$1,000,000. B.$571,000. C.$885,000. D.$890,000. E.$945,000.

Q: Just-in-time manufacturing techniques can be useful in _____________ days' sales in raw materials inventory. A.keeping constant. B.changing upward. C.adding to. D.lowering. E. increasing.

Q: Using the information below, compute the Days' sales in raw materials inventory: Raw Materials Used $121,600 Beginning Raw Materials Inventory $18,000 Ending Raw Materials Inventory $20,200 A.6.76. B.6.02. C.54.0. D.60.6. E.6.37.

Q: All of the following statements regarding manufacturing costs are true except: A.Direct material costs that increase in total with volume of production are called variable costs. B.The reporting of fixed and variable costs separately is not helpful to managers in analyzing cost behavior. C.When overhead costs vary with production, they are called variable overhead. D.When overhead costs don"t vary with production, they are called fixed overhead. E.Overhead can be both variable and fixed.

Q: The schedule of cost of goods manufactured is divided into four parts consisting of all of the following except: A.Direct materials. B.Computation of cost of goods sold. C.Overhead. D.Computation of cost of goods manufactured. E.Direct labor.

Q: Using the information below, calculate net income for the period. Sales revenues for the period $1,304,000 Operating expenses for the period $239,000 Finished Goods Inventory, January 1 36,000 Finished Goods Inventory, December 31 41,000 Cost of goods manufactured for the period $540,000 A.$774,000. B.$769,000. C.$530,000. D.$535,000. E.$448,000.

Q: Using the information below, calculate gross profit for the period. Sales revenues for the period $1,304,000 Operating expenses for the period $239,000 Finished Goods Inventory, January 1 36,000 Finished Goods Inventory, December 31 41,000 Cost of goods manufactured for the period $540,000 A.$774,000. B.$769,000. C.$530,000. D.$535,000. E.$448,000.

Q: Using the information below, calculate cost of goods sold for the period. Sales revenues for the period $1,304,000 Operating expenses for the period $239,000 Finished Goods Inventory, January 1 36,000 Finished Goods Inventory, December 31 41,000 Cost of goods manufactured for the period $540,000 A.$774,000. B.$769,000. C.$530,000. D.$535,000. E.$448,000.

Q: Using the information below, calculate gross profit for the period. Beginning Raw Materials Inventory $25,000 Ending Direct Materials Inventory $30,000 Beginning Work in Process Inventory $55,000 Ending Work in Process Inventory $64,000 Beginning Finished Goods Inventory $80,000 Ending Finished Goods Inventory $67,000 Cost of Goods Sold for the period $540,000 Sales revenues for the period $1,254,000 Operating expenses for the period $232,000 A.$714,000. B.$482,000. C.$1,022,000. D.$187,000. E.$727,000.

Q: The following information pertains to the Frameworks Corporation for May. Calculate the cost of goods sold for the period: Beginning Finished Goods Inventory $19,500 Ending Finished Goods Inventory $18,000 Cost of Goods Manufactured $126,800 A.$164,300. B.$126,800. C.$125,300. D.$146,300. E.$128,300.

Q: The following information pertains to the Packer Corporation. Calculate the cost of goods sold for the period: Beginning Raw Materials $30,000 Ending Raw Materials $70,000 Beginning Work in Process Inventory $40,000 Ending Work in Process Inventory $46,000 Beginning Finished Goods Inventory $72,000 Ending Finished Goods Inventory $68,000 Cost of Goods Manufactured for the period $246,000 A.$250,000. B.$290,000. C.$242,000. D.$258,000. E.$246,000.

Q: Use the following information to compute the cost of goods manufactured: Beginning raw materials $5,500 Ending raw materials 4,000 Direct labor 12,250 Raw material purchases 7,400 Depreciation on factory equipment 6,500 Factory repairs and maintenance 3,300 Beginning finished goods inventory 10,200 Ending finished goods inventory 8,900 Beginning work in process inventory 5,700 Ending work in process inventory 6,300 A.$36,650. B.$30,950. C.$30,650. D.$30,350. E.$31,650.

Q: Use the following data to compute total manufacturing costs for the month. Sales commissions"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6.. 10,800 Direct labor 39,600 Indirect materials"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6. 15,200 Factory manager salaries 7,200 Factory supplies 9,000 Indirect labor 6,300 Depreciationoffice equipment"u00a6"u00a6"u00a6"u00a6 5,000 Direct materials"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6 40,500 Corporate office salaries 42,500 Depreciationfactory equipment 7,500 A.$141,100. B.$125,300. C.$ 45,200. D.$ 84,800. E.$ 58,300.

Q: Use the following data to compute total factory overhead costs for the month. Sales commissions"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6.. 10,800 Direct labor 39,600 Indirect materials"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6. 15,200 Factory manager salaries 7,200 Factory supplies 9,000 Indirect labor 6,300 Depreciationoffice equipment"u00a6"u00a6"u00a6"u00a6 5,000 Direct materials"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6 40,500 Corporate office salaries 42,500 Depreciationfactory equipment 7,500 A.$141,100. B.$125,300. C.$ 45,200. D.$ 84,800. E.$ 58,300.

Q: Use the following data to determine the cost of goods manufactured. Beginning finished goods inventory $ 10,800 Direct labor 30,600 Beginning work in process inventory 7,200 General and administrative expenses 13,500 Direct materials used 40,500 Ending work in process inventory 9,000 Indirect labor 6,300 Ending finished goods inventory 9,500 Indirect materials 13,500 Depreciationfactory equipment 7,500 A.$102,000. B.$110,100. C.$ 96,600. D.$113,700. E.$100,200.

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