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Exam 1: Managerial Accounting Concepts and Principles

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Question 31

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Current information for the Healey Company follows: All raw materials used were traceable to specific units of product. Healey Company's cost of goods manufactured for the year is:

A) $125,800.
B) $128,600.
C) $131,400.
D) $137,000.
E) $139,000.

F) C) and E)
G) C) and D)

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Question 32

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A direct cost is a cost that is:

A) Identifiable as controllable.
B) Traceable to the company as a whole.
C) Does not change with the volume of activity.
D) Traceable to a single cost object.
E) Traceable to multiple cost objects.

F) None of the above
G) All of the above

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Question 33

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________ means that managers and employees understand the changing needs and wants of customers and align management and operating practices accordingly.

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

Flash Company produces lamps. All of the following are direct costs except:

Mustang Corporation reports the following for the month of April: $\begin{array}{lr}\text { Finished goods inventory, April 1}&\$30,200\\\text {Finished goods inventory, April 30 }&24,600\\\text {Total cost of goods manufactured }&114,500\\\end{array}$ The cost of goods sold for April is:

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

If the cost of the beginning work in process inventory is $60,000, costs of goods manufactured is $890,000, direct materials cost is $330,000, direct labor cost is $210,000, and overhead cost is $315,000, calculate the ending work in process inventory.

List the four goals of an internal control system.

All of the following statements regarding manufacturing costs are true except:

Using the information below, calculate gross profit for the period: $\begin{array}{lr}\text { Sales revenues for the period } & \$ 1,304,000 \\\text { Operating expenses for the period } & 239,000 \\\text { Finished Goods Inventory, January 1 } & 36,000 \\\text { Finished Goods Inventory, December 31 } & 41,000 \\\text { Cost of goods manufactured for the period } & 540,000\end{array}$

Materials that are used in manufacturing but are not clearly identified with specific product units are called:

Information for Maxim Manufacturing is presented below. Compute both the cost of goods manufactured and the cost of goods sold for Maxim Manufacturing. $\begin{array}{|l|r|}\hline\text { Beginning raw materials inventor } & \$ 36,800 \\\hline \text { Beginning work in process inventory } & 21,200 \\\hline \text { Direct labor } & 81,000 \\\hline \text { Beginning finished goods inventory } & 64,000 \\\hline \text { Total factory overhead } & 126,000 \\\hline \text { Raw materials purchased } & 21,500 \\\hline \text { Ending raw materials inventory } & 40,000 \\\hline \text { Ending work in process inventory } & 20,000 \\\hline \text { Ending finished goods inventory } & 46,000\\\hline\end{array}$

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.

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

A company's prime costs total $4,500,000 and its conversion costs total $5,500,000. If direct materials costs are $2,000,000, calculate the overhead costs:

Use the following data to determine the cost of goods manufactured: $\begin{array}{lr}\text { Beginning finished goods inventory } & \$ 10,800 \\\text { Direct labor used } & 30,600 \\\text { Beginning work in process inventory } & 7,200 \\\text { General and administrative expenses } & 13,500 \\\text { Direct materials used } & 40,500 \\\text { Ending work in process inventory } & 9,000 \\\text { Indirect labor } & 6,300 \\\text { Ending finished goods inventory } & 9,500 \\\text { Indirect materials } & 13,500 \\\text { Depreciation-factory equipment } & 7,500\end{array}$

Direct costs can be traced to more than one cost object.

A management concept that seeks to uncover and eliminate waste in business activities is called:

Information for the Deuce Manufacturing Company follows. Compute the cost of goods manufactured for this company. $\begin{array}{|l|r|}\hline \text { Beginning raw materials inventory } & \$ 53,200 \\\hline \text { Beginning work in process, inventory } & 78,400 \\\hline \text { Ending raw materials inventory } & 58,100 \\\hline \text { Ending work in process, inventory } & 98,000 \\\hline \text { Direct labor } & 149,800 \\\hline \text { Total factory overhead } & 105,000 \\\hline \text { Raw material purchases } & 210,000\\\hline\end{array}$