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Exam 18: Introduction to Managerial Accounting

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Question 51

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For each of the following costs, classify them as either: -Materials not traceable to specific products

A) Direct costs
B) Indirect costs
C) Neither direct nor indirect costs

D) None of the above
E) A) and B)

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Question 52

Multiple Choice

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Bartel Corporation produces bar stools for restaurants. For each of the following, indicate whether the cost would typically be considered a direct or indirect cost for the cost object given. -Lubricants used on the bar stool manufacturing equipment

A) Direct
B) Indirect

C) A) and B)
D) undefined

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Question 53

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Which of the following is an example of direct labor cost for a cell phone manufacturer?

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.

Manufacturers use machinery and labor to convert direct materials into finished products.

A company sells goods for $150,000 that cost $54,000 to manufacture. Which of the following statements is true?

Match each description to the appropriate term (a-d) . Answers may be used more than once. -Advertising expense

Davis Manufacturing Company had the following data:?? $\begin{array}{lrr}&\text { January } 1&\text { December } 31\\\text { Accounts receivable } & \$ 27,000 & \$ 33,000 \\\text { Materials inventory } & 22,500 & 6,000 \\\text { Work in process inventory } & 70,200 & 48,000 \\\text { Finished goods inventory } & 3,000 & 15,000\end{array}$ Collections on account were $625,000.Cost of goods sold was 68% of sales.Direct materials purchased amounted to $90,000.Factory overhead was 300% of the cost of direct labor. Compute: (a)Sales revenue (all sales were on account) (b)Cost of goods sold (c)Cost of goods manufactured (d)Direct materials used (e)Direct labor incurred (f)Factory overhead incurred

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

If the cost of a direct material is a small portion of total production cost, it may be classified as part of

A staff department has no direct authority over a line department.

Controlling is the process of monitoring operating results and comparing actual results with the expected results.

For each of the following costs, classify them as either: -Salespersons' salaries

In order to be useful to managers, managerial accounting reports should possess all of the following characteristics except

For each of the following, indicate whether the cost would typically be considered a product or period cost for the cost object given. -Depreciation on store equipment

Indirect costs can be specifically traced to a cost object.

Match the items below for a bakery to the type of cost (a-d) . Answers may be used more than once. -Sprinkles for decoration (indirect material)

What is the purpose of the statement of cost of goods manufactured?

Period costs include

What is the primary criterion for the preparation of managerial accounting reports?