Managerial accounting part vi

Question 1

Managerial accounting information is generally prepared for

a. stockholders.
b. creditors.
c. managers.
d. regulatory agencies.

Answer 1

c. managers

Question 2

Edmiston Company reported the following year-end information: beginning work in process inventory, $80,000; cost of goods manufactured, $750,000; beginning finished goods
inventory, $50,000; ending work in process inventory, $70,000; and ending finished goods inventory, $40,000. How much is Edmiston’s cost of goods sold for the year?

a. $750,000
b. $760,000
c. $740,000
d. $770,000

Answer 2

b. $760,000

Question 3

If annual overhead costs are expected to be $750,000 and direct labor costs are expected to be
$1,000,000, then if the activity base is direct labor costs:

a. $1.33 is the predetermined overhead rate.
b. for every dollar of manufacturing overhead, 75 cents of direct labor will be assigned.
c. for every dollar of direct labor, 75 cents of manufacturing overhead will be assigned.
d. a predetermined overhead rate cannot be determined

Answer 3

c. for every dollar of direct labor, 75 cents of manufacturing overhead will be assigned.