Chapter 1

Question 1

Inventory Accounts for a Manufacturing Company

Answer 1

Raw Materials, Work in Process, Finished Goods

Question 2

Direct Costs

Answer 2

Direct Materials and Direct Labor (can be directly traced to a cost object)

Question 3

Indirect Costs

Answer 3

Indirect Materials, Indirect Labor

Question 4

Manufacturing Materials Costs

Answer 4

Direct Materials, Direct Labor, Manufacturing Overhead

Question 5

Prime Costs

Answer 5

Direct Materials and Direct Labor

Question 6

Conversion Costs

Answer 6

Direct Labor + Manufacturing Overhead

Question 7

Product Costs

Answer 7

All costs incurred in the manufacturing of a final product. Direct Materials, Direct Labor, Manufacturing Overhead.

Question 8

Period Costs

Answer 8

Selling + Admin Expenses, Taxes + interests, Salaries + Wages of Acctg. staff, rent, sales commissions

Question 9

Cost of Goods Manufactured

Answer 9

Beginning Work in Process + (DM Used + Direct Labor + Overhead) - Ending Work in Process

Question 10

Total Manufacturing Costs

Answer 10

Direct Materials Used + Direct Labor + Overhead

Question 11

Cost of Goods Sold

Answer 11

Beginning Finshed Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods

Question 12

Factors that influence how managers used managerial accounting

Answer 12

Shift towards a service-based economy, global and time-based competition

Question 13

Calculation of Unit Costs…

Answer 13

…can help managers determine the sales price to charge customers.U

Question 14

Unit Cost Per Service

Answer 14

Total Operating Costs/Total number of services provided; helps manager set the price of each service.

Question 15

Unit Cost per item

Answer 15

Total COGS/Total # of items sold; help managers determine product’s profitability

Question 16

Line Position

Answer 16

Directly involved in providing goods or services to customers.

Question 17

Raw Materials

Answer 17

Materials converted through the manufacturing process into a finished product.

Question 18

Work in Process

Answer 18

Goods that have been started in the manufacturing process but are not yet complete.

Question 19

Finished Goods

Answer 19

Completed goods that have not yet been sold.

Question 20

Cost Object

Answer 20

Anything for which managers want a separate measurement of cost. ex: Tablets are a cost object w/ Processor, Screen, case being direct costs.

Question 21

Direct Materials

Answer 21

Cost of raw materials that are converted into the finished product and easily traced to the product.

Question 22

Direct Labor

Answer 22

Cost of wages and salaries of employees who convert raw materials into finished products.

Question 23

Manufacutring Overhead

Answer 23

Costs that cannot be easily + cost-effectively traced to a cost object. ex: Manager Salaries, Maint. Costs, Depreciation of PPE, utilities, rent, taxes

Question 24

Indirect Materials

Answer 24

Cost of raw materials that cannot be traced directly to specific finished products ex: Manu. Overhead, cost of glue used in assembling tablets

Question 25

Indirect Labor

Answer 25

Cost of wages + salaries in factory for persons not directly producting the product ex: Production Supervisors, factory janitors, works who repair factory equipment, etc.

Question 26

Enterprise Resource Planning

Answer 26

Software system that can integrate all of a company’s functions, depts and data into a single system

Question 27

Just-in-time Management

Answer 27

Cost management system in hich a company produces products just in time to satisfy needs.

Question 28

Total Quality Management

Answer 28

Philosophy designed to integrate all organizational areas in order to provide customers with superior products and services

Question 29

Value Chain

Answer 29

includes all activities that add value to a company’s products and services. R+D>Design>Production>Marketing>Distribution>Customer Support

Question 30

Triple Bottom Line

Answer 30

Evaluating a company’s performance by its profits, people and planet. Economic>Social>Environmental