Managerial Accounting

Question 1

Managerial Accounting is

Answer 1

concerned with providing info to managers for us within the organization (INTERNAL)

Question 2

T/F Managerial Accounting does not need to follow GAAP/IFRS

Answer 2

True

Question 3

direct cost

Answer 3

cost that can be easily and conveniently traced to specified cost object

Question 4

indirect cost

Answer 4

cost that cannot be easily and conveniently traced rot specified cost object

Question 5

direct materials

Answer 5

raw materials that become an integral part of the finished product and whose costs can be conveniently traced to the finished product

Question 6

direct labor

Answer 6

labor costs that can be easily traced to individual units of product. also known as touch labor

Question 7

manufacturing overhead

Answer 7

3rd manufacturing cost category- includes all manufacturing costs except direct materials and direct labor

Question 8

prime cost

Answer 8

the sum of direct materials cost and direct labor costs
DM+DL

Question 9

conversion cost

Answer 9

sum of direct labor and manufacturing overhead

Question 10

selling cost

Answer 10

include all costs that are incurred to secure customer orders and get the finished product to the customer

Question 11

product cost

Answer 11

all costs involved acquiring or making a product

Question 12

period cost

Answer 12

all costs that are not product costs. all selling and administrative expenses are treated as period costs

Question 13

variable cost

Answer 13

varies, in total, in direct proportion to changes in the level of activity

Question 14

fixed cost

Answer 14

a cost that remains constant, in total, regardless of changes in the level of activity

Question 15

direct materials + direct labor + variable manufacturing overhead

Answer 15

variable manufacturing cost

Question 16

fixed manufacturing overhead + fixed selling expense + fixed administrative expense

Answer 16

total fixed cost

Question 17

Which one of the following costs is a component of both manufacturing overhead and total manufacturing costs?

Answer 17

Factory utilities

Question 18

Manufacturing costs are typically classified as
a. product costs or period costs.
b. direct materials or direct labor.
c. direct materials, direct labor, or manufacturing overhead.
d. direct materials, direct labor, or selling and administrative.

Answer 18

C. direct materials, direct labor, or manufacturing overhead.

Question 19

If BWIP is $90 and $100 of direct labor cost, $200 of overhead cost, and $250 of material cost are incurred during the period, what is the cost of goods manufactured if EWIP is $50?
A. $440
B. $540
C. $590
D. $640
E. none of these

Answer 19

C. $590

Question 20

The sum of the total additions to work in process during a period is
A. total manufacturing costs incurred this period
B. factory overhead applied
C. material used
D. cost of goods manufactured

Answer 20

A. total manufacturing costs incurred this period

Question 21

Evans Inc. had the following activities during 20X5:

         Direct materials used                                                        401,000
         Indirect materials used                                                          84,000
         Direct manufacturing labor                                                        350,000
         Indirect manufacturing labor                                                        186,000
         Property taxes on manufacturing plant building                                                          28,800
         Salespersons’ company vehicle costs                                                 12,000
         Depreciation on manufacturing equipment                                                        264,000
         Depreciation of office equipment                                                        123,600
         Miscellaneous plant overhead                                                        135,000
         Plant utilities                                                          92,400
         General office expenses                                                        305,400
         Freight out                                                          30,000
         Beginning work-in-process inventory                                                        250,400
         Ending work-in-process inventory                                                        281,000
         Beginning finished goods inventory                                                        650,000
         Ending finished goods inventory                                                        610,000

a. What is the cost of direct materials used during 20X5?
b. What is cost of goods manufactured for 20X5?
c. What is cost of goods sold for 20X5?
d. What amount of prime costs was added to production during 20X5?
e. What amount of conversion costs was added to production during 20X5?

Answer 21

a. 401,000 b. 1,510,600 c. 1,550,600 d. 751,000 e. 1490200

Question 22

The cost of units completed during a period is called
A. cost of goods sold
B. cost of goods manufactured
C. current manufacturing costs
D. finished goods inventory

Answer 22

B. cost of goods manufactured

Question 23

Product costs are converted from cost to expense when
A. units are completed
B. materials are purchased
C. units are sold
D. materials are requisitioned

Answer 23

C. units are sold

Question 24

Conversion costs are
A. manufacturing costs incurred to produce units of output
B. all costs associated with manufacturing other than direct labor costs and raw material costs
C. costs which are associated with marketing, shipping, warehousing, and billing activities
D. the sum of direct labor costs and all factory overhead costs
E. the sum of raw materials costs and direct labor costs

Answer 24

D. the sum of direct labor costs and all factory overhead costs

Question 25

Management accounting:
A) Focuses on estimating future revenues, costs, and other measures to forecast activities and their results
B) Provides information about the company as a whole
C) Reports information that has occurred in the past that is verifiable and reliable
D) Provides information that is generally available only on a quarterly or annual basis

Answer 25

A. Focuses on estimating future revenues, costs, and other measures to forecast activities and their results

Question 26

The collection of accounting data in some organized way is

Answer 26

cost accumulation

Question 27

Cost objects include

Answer 27

products, customers, and departments

Question 28

If products are the cost object, examples of direct labor cost for the manufacturer of oil well drilling tools would include:

Answer 28

wages of a machinist in the plant

Question 29

Manufacturing costs are eventually reported on

Answer 29

The income statement as cost of goods sold

Question 30

The general term used to identify both the tracing and then allocation of accumulated costs to a cost object is

Answer 30

cost assignment