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. Managerial accounting information:

B. Involves gathering information about costs for planning and control decisions.

Managerial accounting is different from financial accounting in that:

C. Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions.

Flexibility of practice when applied to managerial accounting means that:

D. The design of a company's managerial accounting system largely depends on the nature of the business and the arrangement of the internal operations of the company.

Which of the following items represents a difference between financial and managerial accounting?

A. Users of the information.
B. Flexibility of practices.
C. Timeliness and time dimension of the information reported.
D. Nature of the information.
E. All of these.

Which of the following items are management concepts that were created to improve companies' performances?

A. Just-in-time manufacturing.
B. Customer orientation.
C. Total quality management.
D. Continuous improvement.
E. All of these.

The Malcolm Baldridge Award was established by:

D. The U. S. Congress.

Continuous improvement:

C. Rejects the notion of "good enough."

An attitude of constantly seeking ways to improve company operations, including customer service, product quality, product features, the production process, and employee interactions, is called:

A. Continuous improvement.

A management concept that encourages all managers and employees to be in tune with the wants and needs of customers, and which leads to flexible product designs and production processes, is called:

B. Customer orientation.

An approach to managing inventories and production operations such that units of materials and products are obtained and provided only as they are needed is called:

C. Just-in-time manufacturing.

A management concept that applies quality improvement to all aspects of business activities is called:

E. Total quality management.

The model whose goal is to eliminate waste while satisfying the customer and providing a positive return to the company is:

E. Lean business model.

Which of the following are characteristic of all fraud?

A. It is done to provide direct or indirect benefit to the employee.
B. It violates the employee's duties to his employer.
C. It costs the employer money.
D. It is secret.
E. Items A through D are all characteristics of fraud.

Which of the following statements regarding fraud is (are) true?

A. Fraud is a deliberate act.

Which of the following statements is true?

D. The IMA's Statement of Ethical Professional Practice requires management accountants to be competent, maintain confidentiality, act with integrity, and communicate information in a fair and credible manner.

A direct costs is a cost that is:

D. Traceable to a cost object.

An opportunity cost is:

B. A cost of potential benefit lost.

Labor costs that are clearly associated with specific units or batches of product because the labor is used to convert raw materials into finished products called are:

B. Direct labor.

Costs that are incurred as part of the manufacturing process but are not clearly associated with specific units of product or batches of production, including all manufacturing costs other than direct material and direct labor costs, are called:

D. Factory overhead.

Materials that are used in support of the production process but that do not become a part of the product and are not clearly identified with units or batches of product are called:

D. Indirect materials.

The salary paid to the supervisor of an assembly line would normally be classified as:

B. Indirect labor.

Classifying costs by behavior involves:

A. Identifying fixed cost and variable cost.

Costs classified by controllability are useful for:

E. Both c and d.

C. Management reports.
D. Evaluation reports.

Which of the following is never included in direct materials costs?

B. Outgoing delivery charges.

Raw materials that physically become part of the product and can be traced to specific units or batches of product are called:

E. Direct materials.

A mixed cost:

D. Contains a combination of fixed costs and variable costs.

A fixed cost:

B. Does not change with changes in the volume of activity within the relevant range.

Which of the following costs is not included in factory overhead?

E. Direct materials.

The three major cost components of a manufactured product are:

C. Direct materials, direct labor, and factory overhead.

Which of the following costs would not be classified as factory overhead?

D. Metal doorknobs used on wood cabinets produced.

Period costs for a manufacturing company would flow directly to:

A. The current income statement.

Costs that are first assigned to inventory are called:

B. Product costs

Costs that flow directly to the current income statement are called:

A. Period costs.

Product costs:

A. Are expenditures necessary and integral to finished products.

. Products that have been completed and are ready to be sold by the manufacturer are called:

A. Finished goods inventory.

Goods a company acquires to use in making products are called:

B. Raw materials inventory.

. Products that are in the process of being manufactured but are not yet complete are called:

D. Goods in process inventory.

Another title for goods in process inventory is:

B. Work in process inventory.

Cycle time is:

D. Process time plus inspection time plus move time plus wait time.

Cycle efficiency:

A. Is the ratio of value-added time to total cycle time.

A company produces work boots. The company received and produced an order for 3,000 pairs of boots. The following information is available regarding this order.
process time 3.3 days
inspection time 4.9
move time 4.7
wait time 9.1


What is this company's manufacturing cycle efficiency?

D. 15%

Total cycle time = 3.3 + 4.9 + 4.7 + 9.1 = 22 days
Cycle efficiency = Process time/Total cycle time
= 3.3/22
= 15%

Companies A, B, C and D are competitors in the same industry. Recently each received and produced an order for 75,000 units of an identical item. The following times were measured at each company.

D. Company C was the most efficient.
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The cost of labor that is not clearly associated with specific units or batches of product is called:

C. Indirect labor.

Factory overhead costs normally include all of the following except:

C. Selling costs.

Which of the following items appears only in a manufacturing company's financial statements?

B. Cost of goods manufactured.

The total cost of goods completed during the accounting period for a manufacturer is called:

D. Cost of goods manufactured.

A manufacturing firm's cost of goods manufactured is equivalent to a merchandising firm's:

B. Cost of goods purchased.

Which one of the following items is normally not a manufacturing cost?

C. General and administrative expenses.

Juliet Corporation has accumulated the following accounting data for the year:
finished goods inv 1/1...3200
finished goods inventory 12/31...4000
total cost of goods sold...4200


The cost of goods manufactured for the year is:

C. $5,000.

Beg FG + COGM - END FG = COGS
COGM = COGS - Beg FG + End FG
COGM = $4,200 - $3,200 + $4,000
COGM = $5,000

A manufacturing company has a beginning finished goods inventory of $14,600, raw material purchases of $18,000, cost of goods manufactured of $32,500, and an ending finished goods inventory of $17,800. The cost of goods sold for this company is:

B. $2Beg FG + COGM - End FG = COGS
$14,600 + $32,500 - $17,800 = $29,300
9,300.

The beginning and ending finished goods inventories of the Prize Ring manufacturing company were $75,000 and $73,000 respectively. If cost of goods sold equaled $66,000, what is the amount of cost of goods manufactured for this period?

B. $ 64,000.

Beg FG + COGM - End FG = COGS
$75,000 + ? - $73,000 = $66,000
$2,000 + ? = $66,000
? = $64,000

Compute cost of goods manufactured for this period given the following amounts.
ending finished goods inventory..66000
cogs...54000
beginning finished goods inventory...60000

Beg FG + COGM - End FG = COGS
$60,000 + ? - $66,000 = $54,000
$(6,000) + ? = $54,000
? = $60,000
C. $ 60,000.

The beginning and ending finished goods inventories of a company were $91,000 and $94,000 respectively. If cost of goods sold equaled $800,000, what is the amount of cost of goods manufactured for this period?

D. $803,000.

Beg FG + COGM - End FG = COGS
$91,000 + ? - $94,000 = $800,000
-$3,000 + ? = $800,000
? = $803,000

. A manufacturing statement is also known as a schedule or listing of the:

C. Cost of goods manufactured.

The following information relates to the manufacturing operations of the IMH Publishing Corporation for the year:
raw materials inv..beginning 57000...ending 60,000
finished goods..beginning 68,000...ending 60,000


The raw materials used in manufacturing during the year totaled $118,000. Raw materials purchased during the year amount to:

B. $115,000.

Beg RM + Purch - End RM = RM used
Purch = RM used - Beg RM + End RM
Purch = $118,000 - $57,000 + $60,000
Purch = $121,000

Ajax Company accumulated the following account information for the year:
beginning raw mat inv..6000
indirect materials cost...2000
indirect labor cost...5000
maintenance of factory equip...2800
direct labor cost...7000


Using the above information, total factory overhead costs would be:

A. $ 9,800.

FOH = Indirect materials + Indirect labor + Maintenance
FOH = $2,000 + $5,000 + $2,800
FOH = $9,800

The following information is available for the year ended December 31:

beginning raw materials inventory...2500
raw materials purchases...4000
ending raw materials inv...3000
office supplies expense...1000

The amount of raw materials used in production for the year is:

C. $3,500.

Beg RM + Purch - End RM = RM used
$2,500 + $4,000 - $3,000 = $3,500

A financial report that summarizes the amounts and types of costs that were incurred in the manufacturing process during the period is a:

C. Manufacturing statement.

Which of the following accounts would all appear on a manufacturing statement?

. Raw materials, factory insurance expired, indirect labor

Use the following information from Hardy Co. for the current year:
direct materials used..5000
direct labor...7000
total factory overhead...5100
beginning goods in process...3000
ending goods in process..4000

The total of hardy co's manufacturing costs added during the current year is:

C. $17,100.

RM used + DL + FOH = Mfg. costs added
$5,000 + $7,000 + $5,100 = $17,100

Use the following information from Hardy Co. for the current year:
direct materials used..5000
direct labor...7000
total factory overhead...5100
beginning goods in process...3000
ending goods in process..4000

hardy co's cost of goods manufactured for the current year is:

B. $16,100.

COGM = Costs added (from prior question) + BGIP - EGIP
COGM = $17,100 + $3,000 - $4,000
COGM = $16,100

Total manufacturing costs incurred during the year do not include:

C. Goods in process inventory, beginning balance.

If beginning and ending goods in process inventories are $5,000 and $15,000, respectively, and cost of goods manufactured is $170,000, what is the total manufacturing cost for the period?

A. $180,000.
Mfg. costs + BGIP - EGIP = COGM
Mfg. costs = COGM - BGIP + EGIP
Mfg. costs = $170,000 - $5,000 + $15,000
Mfg. costs = $180,000

The following information is available for Talking Toys, Inc. for the current year:

direct materials used...12500
goods in process 1/1...50000
goods in process 12/31...37000
total factory overhead...5500
direct labor used...26500

the total mfg costs incurred during the year was:

B. $44,500.

Costs added = DM used + DL + FOH
Costs added = $12,500 + $26,500 + $5,500
Costs added = $44,500

The following information is available for Talking Toys, Inc. for the current year:

direct materials used...12500
goods in process 1/1...50000
goods in process 12/31...37000
total factory overhead...5500
direct labor used...26500

the total cost of goods manufactured for the year was:

C. $57,500.

COGM = Costs added (from prior question) + BGIP - EGIP
COGM = $44,500 + $50,000 - $37,000
COGM = $57,500

Current information for the Austin Company follows:
beginning raw material inv..15200
beginning goods in process inv...22400
ending raw materials inv...16600
ending goods in process inv...28000
direct labor..42800
total factory overhead...30000
raw material purchases...60000

All raw materials used were traceable to specific batches of product. Austin Company's cost of goods manufactured for the year is:

A. $125,800.

RM used = Beg RM + RM purchases - End RM
RM used = $15,200 + $60,000 - $16,600
RM used = $58,600
COGM = RM used + DL + FOH + BGIP - EGIP
COGM = $58,600 + $42,800 + $30,000 + $22,400 - $28,000
COGM = $125,800

Use the following data to determine the cost of goods manufactured:

beginning finished goods inv...10800
direct labor 30600
beginning goods in process inv...7200
general and admin expenses..13500
direct materials used...40500
ending goods in process inventory..9000
indirect labor...6300
ending finished goods inventory..9500
indirect materials 13500
depreciation-fact equip 7500

C. $ 96,600.

FOH = Ind. Labor + Ind. Materials + Depreciation factory equip
FOH = $6,300 + $13,500 + $7,500
FOH = $27,300
COGM = DM + DL + FOH + BGIP - EGIP
COGM = $40,500 + $30,600 + $27,300 + $7,200 - $9,000
COGM = $96,600

Use the following data to determine the cost of goods manufactured.

beginning finished goods inv...6200
direct labor 15100
beginning goods in process inv...1500
general and admin expenses..20000
direct materials used...20500
ending goods in process inventory..4000
indirect labor...7300
ending finished goods inventory..5000
indirect materials 3400
depreciation-fact equip 2000

B. $45,800.

FOH = Ind. Labor + Ind. Materials + Depreciation factory equip
FOH = $7,300 + $3,400 + $2,000
FOH = $12,700
COGM = DM + DL + FOH + BGIP - EGIP
COGM + $20,500 + $15,100 + $12,700 + $1,500 - $4,000
COGM = $45,800

Use the following information to compute the cost of goods manufactured:

beginning raw materials...5500
ending raw materials...4000
direct labor 12250
raw materials purchases..7400
depr on fact equip...6500
fact repairs and maint...3300
beginning finished goods inv...10200
ending finished goods inv...8900
beginning goods in process inv..5700
ending goods in process inv...6300

D. $30,350.

RM used = Beg RM + RM Purchases - End RM
RM used = $5,500 + $7,400 - $4,000
RM used = $8,900
FOH = Deprec. on factory equip. + Factory repairs./Maint.
FOH = $6,500 + $3,300
FOH $9,800
COGM = RM used + DL + FOH + BGIP - EGIP
COGM = $8,900 + $12,500 + $9,800 + $5,700 - $6,300
COGM = $30,350

Use the following information to compute the cost of goods manufactured:

beg finished goods inv..65000
beg goods in process inv...81000
beginning raw materials...73000
depreciation on fact equip...7000
direct labor...25000
ending finished goods inv..67000
ending goods in process inv..79000
ending raw materials...60000
factory repairs and maintenance..12000
raw materials purchases...50000

E. $109,000.

RM used = Beg RM + RM Purchases - End RM
RM used = $73,000 + $50,000 - $60,000
RM used = $63,000
FOH = Deprec. on factory equip. + Factory repairs and maintenance
FOH = $7,000 + $12,000
FOH = $19,000
COGM = RM used + DL + FOH + BGIP - EGIP
COGM = $63,000 + $25,000 + $19,000 + $81,000 - $79,000
COGM = $109,000

Use the following information to compute the cost of goods manufactured:

beg finished goods inv..9250
beg goods in process inv...8700
beginning raw materials..7500
depr on fact equip...6000
direct labor...75000
ending finished goods inv...8750
ending goods in process inv..9300
ending raw materials 8500
factory supervisors salary..50000
raw material pruchases 14000

A. $143,400.


RM used = Beg RM + RM Purchases - End RM
RM used = $7,500 + $14,000 - $8,500
RM used = $13,000
FOH = Deprec. on factory equip. + Factory Supervisor's salary
FOH = $6,000 + $50,000
FOH = $56,000
COGM = RM used + DL + FOH + BGIP - EGIP
COGM = $13,000 + $75,000 + $56,000 + $8,700 - $9,300
COGM = $143,400

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