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Exam 15: Managerial Accounting Concepts and Principles

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Question 81

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The costs of materials and labor that do not enter directly into the finished product are classified as cost of goods sold.

A) True
B) False

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Question 82

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Prime costs are the combination of direct materials and direct labor costs.

A) True
B) False

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Question 83

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The vice presidents of production and sales and the controller hold line positions in most large organizations.

Identify the following costs as (a) direct materials, (b) direct labor, or (c) factory overhead for a cake manufacturer. 1. _____ Frosting 2. _____ Depreciation on oven 3. _____ Wages of bakers 4. _____ Sprinkles for topping

Managerial accounting reports are prepared according to generally accepted accounting principles.

In the income statement of a manufacturing company, what replaces purchases in the cost of goods section of a retail company?

Managerial information is for external as well as internal stakeholders.

Factory overhead includes all manufacturing costs except direct materials and direct labor.

Cost of Materials Used $45,000 Direct Labor costs $48,000 Factory Overhead $39,000 Work in Process, beg. $28,000 Work in Process, end. $18,000 Finished Goods,beg. $28,000 Finished Goods, end. $18,000 What is Cost of Goods Sold?

Differentiate between: a) direct materials versus indirect materials b) direct labor versus indirect labor

On the balance sheet for a manufacturing business, the cost of direct materials, direct labor, and factory overhead are categorized as either materials inventory, work in process inventory, or finished goods inventory.

Which of the following are basic phases of the management process?

The cost of a manufactured product generally consists of which of the following costs?

Identify the following costs as a (a) product cost or (b) period cost for a cake factory. 1. _____ Frosting 2. _____ Baker's wages 3. _____ Advertising fees 4. _____ Transportation out

Rent expense on a factory building would be treated as a(n) :

Indirect labor and indirect materials would be part of factory overhead.

All of the following would be reported on the balance sheet as a current asset except:

Who are the individuals charged with the responsibility for directing the day-to-day operations of a business?

Allen Company used $71,000 of direct materials and incurred $37,000 of direct labor costs during 2011. Indirect labor amounted to $2,700 while indirect materials used totaled $1,600. Other operating costs pertaining to the factory included utilities of $3,100; maintenance of $4,500; supplies of $1,800; depreciation of $7,900; and property taxes of $2,600. There was no beginning or ending finished goods inventory, but work in process inventory began the year with a $5,500 balance and ended the year with a $7,500 balance. Prepare a statement of cost of goods manufactured.

Product costs are not expensed until the product is sold.