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Exam 1: Managerial Accounting

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Question 1

Multiple Choice

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Internal reports must be communicated

A) daily.
B) monthly.
C) annually.
D) as needed.

E) A) and B)
F) A) and C)

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Question 2

Multiple Choice

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The equivalent of finished goods inventory for a merchandising firm is referred to as

A) purchases.
B) cost of goods purchased.
C) inventory.
D) raw materials inventory.

E) B) and C)
F) A) and D)

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Question 3

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Benson Inc.'s accounting records reflect the following inventories: $\begin{array}{lrr}&\text { Dec. } 31,2016&\text { Dec. } 31,2017\\\text { Raw materials inventory } & \$ 80,000 & \$ 64,000 \\\text { Work in process inventory } & 104,000 & 116,000 \\\text { Finished goods inventory } & 100,000 & 92,000\end{array}$ During 2017, Benson purchased $1,450,000 of raw materials, incurred direct labor costs of $250,000, and incurred manufacturing overhead totaling $160,000. Assume Benson's cost of goods manufactured for 2017 amounted to $1,660,000. How much would it report as cost of goods sold for the year?

Which one of the following is an example of a period cost?

Direct materials costs and indirect materials costs are manufacturing overhead.

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?

Raw materials inventory shows the cost of completed goods available for sale to customers.

As inventoriable costs expire, they become

The management function of organizing and directing is mainly concerned with setting goals and objectives for the entity.

Wood Company has beginning work in process inventory of $138,000 and total manufacturing costs of $477,000. If cost of goods manufactured is $480,000, what is the cost of the ending work in process inventory?

Decision-making is an integral part of the planning, directing, and controlling functions.

Assuming the cost of direct materials used is $1,800,000, compute the total manufacturing costs using the information below. $\begin{array}{lll}\text { Raw mate rials inventory, January 1 } & 30,000 \\\text { Raw materials inventory, December 31 } & 60,000 \\\text { Work in process, January 1 } & 27,000\\\text { Work in process, December } 31 & 18,000 \\\text { Finished goods, January 1 } & 60,000 \\\text { Finished goods, December } 31 & 48,000 \\\text { Raw materials purchases } & 1,800,000\\\text { Direct labor } & 890,000 \\\text { Factory utilities } & 225,000 \\\text { Indirect labor } & 75,000 \\\text { Factory depreciation } & 500,000 \\\text { Operating expenses } & 630,000\end{array}$

The inventory accounts that show the cost of completed goods on hand and the costs applicable to production that is only partially completed are, respectively

Planning involves coordinating the diverse activities and human resources of a company to produce a smooth running operation.

Assuming that the total manufacturing costs are $3,400,000, compute the cost of goods manufactured using the information below. $\begin{array}{lll}\text { Raw mate rials inventory, January 1 } & 30,000 \\\text { Raw materials inventory, December 31 } & 60,000 \\\text { Work in process, January 1 } & 27,000\\\text { Work in process, December } 31 & 18,000 \\\text { Finished goods, January 1 } & 60,000 \\\text { Finished goods, December } 31 & 48,000 \\\text { Raw materials purchases } & 1,800,000\\\text { Direct labor } & 890,000 \\\text { Factory utilities } & 225,000 \\\text { Indirect labor } & 75,000 \\\text { Factory depreciation } & 500,000 \\\text { Operating expenses } & 630,000\end{array}$

Planning is a function that involves

Sales commissions are classified as

Managerial accounting information generally pertains to an entity as a whole and is highly aggregated.

The management function that requires managers to look ahead and establish objectives is

Direct materials and direct labor are the only product costs.