The current assets section of a manufacturing company's balance sheetpresents three inventory accounts: finished goods inventory, work in process inventory, andraw materials inventory..
Trang 1CHAPTER 1 MANAGERIAL ACCOUNTING
SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM’S
Trang 2sg This question also appears in the Study Guide.
st This question also appears in a self-test at the student companion website
a This question covers a topic in an Appendix to the chapter
SUMMARY OF STUDY OBJECTIVES BY QUESTION TYPEItem Type Item Type Item Type Item Type Item Type Item Type Item Type
Trang 3Note: TF = True-False BE = Brief Exercise C = Completion
MC = Multiple Choice Ex = Exercise
The chapter also contains one set of ten Matching questions and five Short-Answer Essayquestions
CHAPTER STUDY OBJECTIVES
1 Explain the distinguishing features of managerial accounting The primary users of
managerial accounting reports are internal users, who are officers, department heads,managers, and supervisors in the company Managerial accounting issues internal reports asfrequently as the need arises The purpose of these reports is to provide special-purposeinformation for a particular user for a specific decision The content of managerial accountingreports pertains to subunits of the business, may be very detailed, and may extend beyondthe double-entry accounting system The reporting standard is relevance to the decision beingmade No independent audits are required in managerial accounting
2 Identify the three broad functions of management The three functions are planning,
directing, and controlling Planning requires management to look ahead and to establishobjectives Directing involves coordinating the diverse activities and human resources of acompany to produce a smooth-running operation Controlling is the process of keeping theactivities on track
3 Define the three classes of manufacturing costs Manufacturing costs are typically
classified as either (1) direct materials, (2) direct labor, or (3) manufacturing overhead Rawmaterials that can be physically and directly associated with the finished product during themanufacturing process are called direct materials The work of factory employees that can bephysically and directly associated with converting raw materials into finished goods isconsidered direct labor Manufacturing overhead consists of costs that are indirectlyassociated with the manufacture of the finished product
Trang 44 Distinguish between product and period costs Product costs are costs that are a
necessary and integral part of producing the finished product Product costs are also calledinventoriable costs Under the matching principle, these costs do not become expenses untilthe company sells the finished goods inventory Period costs are costs that are identified with
a specific time period rather than with a salable product These costs relate tononmanufacturing costs and therefore are not inventoriable costs
5 Explain the difference between a merchandising and a manufacturing income
statement The difference between a merchandising and a manufacturing income statement
is in the cost of goods sold section A manufacturing cost of goods sold section showsbeginning and ending finished goods inventories and the cost of goods manufactured
6 Indicate how cost of goods manufactured is determined Companies add the cost of the
beginning work in process to the total manufacturing costs for the current year to arrive at thetotal cost of work in process for the year They then subtract the ending work in process fromthe total cost of work in process to arrive at the cost of goods manufactured
7 Explain the difference between a merchandising and a manufacturing balance sheet.
The difference between a merchandising and a manufacturing balance sheet is in the currentassets section The current assets section of a manufacturing company's balance sheetpresents three inventory accounts: finished goods inventory, work in process inventory, andraw materials inventory
8 Identify trends in managerial accounting Managerial accounting has experienced many
changes in recent years Among these are a shift toward addressing the needs of servicecompanies and improving practices to better meet the needs of managers Improvedpractices include a focus on managing the value chain through techniques such as just-in-time inventory and technological applications such as enterprise resource management,computer-integrated manufacturing, and B2B e-commerce In addition, techniques such asjust-in-time inventory, total quality management, the theory of constraints, and activity-basedcosting are improving decision making Finally, the balanced scorecard is now used by manycompanies in order to attain a more comprehensive view of the company’s operations
a9 Prepare a worksheet and closing entries for a manufacturing company The worksheet
for the cost of good manufactured needs two additional columns In these columns, facturing companies enter the beginning inventories of raw materials and work in process asdebits and the ending inventories as credits All manufacturing costs are entered as debits Toclose all of the accounts that appear in the cost of goods manufactured schedule, manu-facturers use a Manufacturing Summary account
Trang 53 Managerial accounting applies to all forms of business organizations.
4 Determining the unit cost of manufacturing a product is an output of financial accounting
5 Managerial accounting internal reports are prepared more frequently than are classifiedfinancial statements
6 The management function of organizing and directing is mainly concerned with settinggoals and objectives for the entity
7 The Sarbanes-Oxley Act replaces generally accepted accounting principles in amanufacturing company
8 Controlling is the process of determining whether planned goals are being met
9 Decision-making is an integral part of the planning, directing, and controlling functions
10 Both direct labor cost and indirect labor cost are product costs
11 Manufacturing costs that cannot be classified as direct materials or direct labor areclassified as manufacturing overhead
12 Raw materials are equal to direct materials minus indirect materials
13 Raw materials that can be conveniently and directly associated with a finished product arecalled materials overhead
14 The total cost of a finished product does not generally contain equal amounts of materials,labor, and overhead costs
15 Direct materials costs and indirect materials costs are manufacturing overhead
16 Period costs include selling and administrative expenses
17 Indirect materials and indirect labor are both inventoriable costs
18 Direct materials and direct labor are the only product costs
19 Total period costs are deducted from total cost of work in process to calculate cost ofgoods manufactured
20 Period costs are not inventoriable costs
Trang 621 Ending finished goods inventory appears on both the balance sheet and the incomestatement of a manufacturing company.
22 The beginning work in process inventory appears on both the balance sheet and the cost
of goods manufactured schedule of a manufacturing company
23 In calculating gross profit for a manufacturing company, the cost of goods manufactured isdeducted from net sales
24 Finished goods inventory does not appear on a cost of goods manufactured schedule
25 If the ending work in process inventory is greater than the beginning work in processinventory, then the cost of goods manufactured will be less than total manufacturing costsfor the period
26 Finished goods inventory for a manufacturing company is equivalent to merchandiseinventory for a merchandising company
27 Raw materials inventory is not an asset until it is used to make a product
28 Raw materials inventory shows the cost of completed goods available for sale tocustomers
29 The supply chain is all the activities associated with providing a product or service
30 Many companies have significantly lowered inventory levels and costs using just-in-timeinventory methods
31 The theory of constraints is used to measure performance
32 The focus of a TQM system is to reduce defects in finished products
33 The balanced scorecard approach attempts to maintain as little inventory on hand aspossible
a34 In preparing closing entries for a manufacturing company, all revenue and expenseaccount balances are closed to a Manufacturing Summary account
a35 To balance the Cost of Goods Manufactured columns of a worksheet for a manufacturingcompany, an entry must be made in the income statement debit column
Additional True-False Questions
36 Managerial accounting is primarily concerned with managers and external users
37 Planning involves coordinating the diverse activities and human resources of a company
to produce a smooth running operation
38 When the physical association of raw materials with the finished product is too small totrace in terms of cost, they are usually classified as indirect materials
39 Product costs are also called inventoriable costs
Trang 740 Direct materials become a cost of the finished goods manufactured when they areacquired, not when they are used.
41 The sum of the direct materials costs, direct labor costs, and beginning work in process isthe total manufacturing costs for the year
42 In a manufacturing company balance sheet, manufacturing inventories are reported in thecurrent assets section in the order of their expected use in production
Answers to True-False Statements
Item Ans Item Ans Item Ans Item Ans Item Ans Item Ans Item Ans.
MULTIPLE CHOICE QUESTIONS
43 Managerial accounting applies to each of the following types of businesses except
a service firms
b merchandising firms
c manufacturing firms
d Managerial accounting applies to all types of firms
44 Managerial accounting information is generally prepared for
a stockholders
b creditors
c managers
d regulatory agencies
45 Managerial accounting information
a pertains to the entity as a whole and is highly aggregated
b pertains to subunits of the entity and may be very detailed
c is prepared only once a year
d is constrained by the requirements of generally accepted accounting principles
46 The major reporting standard for presenting managerial accounting information is
a relevance
b generally accepted accounting principles
c the cost principle
d the current tax law
47 Managerial accounting is also called
a management accounting
b controlling
c analytical accounting
d inside reporting
Trang 848 Which of the following is not an internal user?
a Creditor
b Department manager
c Controller
d Treasurer
49 Managerial accounting does not encompass
a calculating product cost
b calculating earnings per share
c determining cost behavior
51 Management accountants would not
a assist in budget planning
b prepare reports primarily for external users
c determine cost behavior
d be concerned with the impact of cost and volume on profits
52 Internal reports must be communicated
d classified financial statements
55 The reporting standard for external financial reports is
a industry-specific
b company-specific
c generally accepted accounting principles
d department-specific
Trang 956 Which of the following statements about internal reports is not true?
a The content of internal reports may extend beyond the double-entry accountingsystem
b Internal reports may show all amounts at market values
c Internal reports may discuss prospective events
d Most internal reports are summarized rather than detailed
57 In an analogous sense, external user is to internal user as generally accepted accountingprinciples are to
c very detailed reports
d quarterly and annual reports
60 What activities and responsibilities are not associated with management's functions?
a Planning
b Accountability
c Controlling
d Directing
61 Planning is a function that involves
a hiring the right people for a particular job
b coordinating the accounting information system
c setting goals and objectives for an entity
d analyzing financial statements
62 The managerial function of controlling
a is performed only by the controller of a company
b is only applicable when the company sustains a loss
c is concerned mainly with operating a manufacturing segment
d includes performance evaluation by management
63 Which of the following is not a management function?
a Constraining
b Planning
c Controlling
d Directing
Trang 1064 A manager that is establishing objectives is performing which management function?
b running a department under quality control standards universally accepted
c coordinating a company's diverse activities and human resources to produce asmooth-running operation
d developing a complex performance ranking system to give certain high performersgood raises
69 Both direct materials and indirect materials are
a raw materials
b manufacturing overhead
c merchandise inventory
d sold directly to customers by a manufacturing company
70 The work of factory employees that can be physically and directly associated withconverting raw materials into finished goods is
Trang 1172 Manufacturing costs include
a direct materials and direct labor only
b direct materials and manufacturing overhead only
c direct labor and manufacturing overhead only
d direct materials, direct labor, and manufacturing overhead
73 Which one of the following is not a direct material?
a A tire used for a lawn mower
b Plastic used in the covered case for a home PC
c Steel used in the manufacturing of steel-radial tires
d Lubricant for a ball-bearing joint for a large crane
74 Which one of the following is not a cost element in manufacturing a product?
77 Which one of the following is not considered as material costs?
a Partially completed motor engines for a motorcycle plant
b Bolts used in manufacturing the compressor of an engine
c Rivets for the wings of a new commercial jet aircraft
d Lumber used to build tables
78 Which of the following is not a manufacturing cost category?
a Cost of goods sold
b Direct materials
c Direct labor
d Manufacturing overhead
79 As current technology changes manufacturing processes, it is likely that direct
a labor will increase
b labor will decrease
c materials will increase
d materials will decrease
Trang 1280 For the work of factory employees to be considered as direct labor, the work must beconveniently and
a materially associated with raw materials conversion
b periodically associated with raw materials conversion
c physically associated with raw materials conversion
d promptly associated with raw materials conversion
81 Which of the following is not classified as direct labor?
a Bottlers of beer in a brewery
b Copy machine operators at a copy shop
d Indirect manufacturing costs
84 Because of automation, which component of product cost is declining?
87 Which one of the following is an example of a period cost?
a A change in benefits for the union workers who work in the New York plant of aFortune 1000 manufacturer
b Workers' compensation insurance on factory workers' wages allocated to the factory
c A box cost associated with computers
d A manager's salary for work that is done in the corporate head office
Trang 1388 Which one of the following costs would not be inventoriable?
a Period costs
b Factory insurance costs
c Indirect materials
d Indirect labor costs
89 Direct materials and direct labor of a company total $6,000,000 If manufacturingoverhead is $3,000,000, what is direct labor cost?
a $3,000,000
b $6,000,000
c $0
d Cannot be determined from the information provided
90 Which of the following are period costs?
a Raw materials
b Direct materials and direct labor
c Direct labor and manufacturing overhead
92 Product costs consist of
a direct materials and direct labor only
b direct materials, direct labor, and manufacturing overhead
c selling and administrative expenses
d period costs
93 Which one of the following represents a period cost?
a The VP of Sales' salary and benefits
b Overhead allocated to the manufacturing operations
c Labor costs associated with quality control
d Fringe benefits associated with factory workers
94 Product costs are also called
a direct costs
b overhead costs
c inventoriable costs
d capitalizable costs
95 For inventoriable costs to become expenses under the matching principle,
a the product must be finished and in stock
b the product must be expensed based on its percentage-of-completion
c the product to which they attach must be sold
d all accounts payable must be settled
Trang 1496 As inventoriable costs expire, they become
a selling expenses
b gross profit
c cost of goods sold
d sales revenue
97 A manufacturing company calculates cost of goods sold as follows:
a Beginning FG inventory + cost of goods purchased – ending FG inventory
b Ending FG inventory – cost of goods manufactured + beginning FG inventory
c Beginning FG inventory – cost of goods manufactured – ending FG inventory
d Beginning FG inventory + cost of goods manufactured – ending FG inventory
98 A manufacturing company reports cost of goods manufactured as a(n)
a current asset on the balance sheet
b administrative expense on the income statement
c component in the calculation of cost of goods sold on the income statement
d component of the raw materials inventory on the balance sheet
99 The subtotal, "Cost of goods manufactured" appears on
a a merchandising company's income statement
b a manufacturing company's income statement
c both a manufacturing and a merchandising company's income statement
d neither a merchandising nor a manufacturing company's income statement
100 Cost of goods manufactured in a manufacturing company is analogous to
a Ending inventory in a merchandising company
b Beginning inventory in a merchandising company
c Cost of goods available for sale in a merchandising company
d Cost of goods purchased in a merchandising company
101 Cost of goods sold
a only appears on merchandising companies' income statements
b only appears on manufacturing companies' income statements
c appears on both manufacturing and merchandising companies' income statements
d is calculated exactly the same for merchandising and manufacturing companies
102 Hollern Combines, Inc has $10,000 of ending finished goods inventory as of December
31, 2008 If beginning finished goods inventory was $5,000 and cost of goods sold was
$20,000, how much would Hollern report for cost of goods manufactured?
a $22,500
b $5,000
c $25,000
d $15,000
103 Cost of goods manufactured is calculated as follows:
a Beginning WIP + direct materials used + direct labor + manufacturing overhead +ending WIP
b Direct materials used + direct labor + manufacturing overhead – beginning WIP +ending WIP
c Beginning WIP + direct materials used + direct labor + manufacturing overhead –ending WIP
d Direct materials used + direct labor + manufacturing overhead – ending WIP –beginning WIP
Trang 15104 If the amount of "Cost of goods manufactured" during a period exceeds the amount of
"Total manufacturing costs" for the period, then
a ending work in process inventory is greater than or equal to the amount of thebeginning work in process inventory
b ending work in process is greater than the amount of the beginning work in processinventory
c ending work in process is equal to the cost of goods manufactured
d ending work in process is less than the amount of the beginning work in processinventory
105 On the costs of goods manufactured schedule, depreciation on factory equipment
a is not listed because it is included with Depreciation Expense on the incomestatement
b appears in the manufacturing overhead section
c is not listed because it is not a product cost
d is not an inventoriable cost
106 On the costs of goods manufactured schedule, the item raw materials inventory (ending)
appears as a(n)
a addition to raw materials purchases
b addition to raw materials available for use
c subtraction from raw materials available for use
d subtraction from raw materials purchases
Use the following information for questions 107–109
Carly Manufacturing Company's accounting records reflect the following inventories:
Dec 31, 2008 Dec 31, 2007Raw materials inventory $310,000 $260,000
Work in process inventory 300,000 160,000
Finished goods inventory 190,000 150,000
During 2008, $500,000 of raw materials were purchased, direct labor costs amounted to
$600,000, and manufacturing overhead incurred was $480,000
107 The total raw materials available for use during 2008 for Carly Manufacturing Company is
109 If Carly Manufacturing Company's cost of goods manufactured for 2008 amounted to
$1,390,000, its cost of goods sold for the year is
a $1,500,000
b $1,250,000
c $1,350,000
d $1,430,000
Trang 16110 What is work in process inventory generally described as?
a Costs applicable to units that have been started in production but are only partiallycompleted
b Costs associated with the end stage of manufacturing that are almost alwayscomplete and ready for customers
c Costs strictly associated with direct labor
d Beginning stage production costs associated with labor costs dealing with bringing inraw materials from the shipping docks
111 Utley Manufacturing Company reported the following year-end information: beginning
work in process inventory, $180,000; cost of goods manufactured, $516,000; beginningfinished goods inventory, $252,000; ending work in process inventory, $220,000; andending finished goods inventory, $264,000 Utley Manufacturing Company's cost of goodssold for the year is
a $504,000
b $528,000
c $476,000
d $252,000
112 Neeley Manufacturing Company reported the following year-end information:
Beginning work in process inventory $1,080,000
Beginning raw materials inventory 300,000
Ending work in process inventory 900,000
Ending raw materials inventory 480,000
Raw materials purchased 960,000
Use the following information for questions 113–115
Hopkins Manufacturing Inc.'s accounting records reflect the following inventories:
Dec 31, 2007 Dec 31, 2008Raw materials inventory $ 80,000 $ 64,000
Work in process inventory 104,000 116,000
Finished goods inventory 100,000 92,000
During 2008, Hopkins purchased $760,000 of raw materials, incurred direct labor costs of
$100,000, and incurred manufacturing overhead totaling $128,000
113 How much is raw materials transferred to production during 2008 for Hopkins
Trang 17114 How much is total manufacturing costs incurred during 2008 for Hopkins?
a $992,000
b $1,004,000
c $988,000
d $1,000,000
115 Assume Hopkins Manufacturing’s cost of goods manufactured for 2008 amounted to
$960,000 How much would it report as cost of goods sold for the year?
a $968,000
b $1,000,000
c $1,060,000
d $952,000
116 McNally Manufacturing Company reported the following year-end information:
Beginning work in process inventory $ 46,000
Beginning raw materials inventory 24,000
Ending work in process inventory 50,000
Ending raw materials inventory 20,000
Raw materials purchased 680,000
Use the following information for questions 117–118
Modine Manufacturing Inc.'s accounting records reflect the following inventories:
Dec 31, 2007 Dec 31, 2008Raw materials inventory $120,000 $ 96,000
Work in process inventory 156,000 174,000
Finished goods inventory 150,000 138,000
During 2008, Modine purchased $1,140,000 of raw materials, incurred direct labor costs of
$150,000, and incurred manufacturing overhead totaling $192,000
117 How much is total manufacturing costs incurred during 2008 for Modine?
Trang 18119 Sauder Manufacturing Company reported the following year-end information:
Beginning work in process inventory $ 35,000
Beginning raw materials inventory 18,000
Ending work in process inventory 38,000
Ending raw materials inventory 15,000
Raw materials purchased 510,000
120 Hardigan Manufacturing Company reported the following year-end information: beginning
work in process inventory, $80,000; cost of goods manufactured, $980,000; beginningfinished goods inventory, $50,000; ending work in process inventory, $70,000; and endingfinished goods inventory, $40,000 How much is Hardigan’s cost of goods sold for theyear?
a $980,000
b $990,000
c $970,000
d $1,000,000
Use the following information for questions 121–124
Raw materials inventory, January 1 $ 20,000
Raw materials inventory, December 31 40,000
Work in process, January 1 18,000
Work in process, December 31 12,000
Finished goods, January 1 40,000
Finished goods, December 31 32,000
Raw materials purchases 1,000,000
Factory utilities 150,000
Factory depreciation 400,000
Selling and administrative expenses 420,000
121 Direct materials used is
Trang 19123 Assume your answer to question 122 above is $2,000,000 Cost of goods manufactured
Use the following information for questions 125–128:
Raw materials inventory, January 1 $ 30,000
Raw materials inventory, December 31 60,000
Work in process, January 1 27,000
Work in process, December 31 18,000
Finished goods, January 1 60,000
Finished goods, December 31 48,000
Raw materials purchases 1,500,000
Factory utilities 225,000
Factory depreciation 600,000
Selling and administrative expenses 630,000
125 Direct materials used is
Trang 20129 Samson Company reported total manufacturing costs of $130,000, manufacturing
overhead totaling $26,000, and direct materials totaling $32,000 How much is direct laborcost?
a Cannot be determined from the information provided
b $188,000
c $58,000
d $72,000
130 Given the following data for Mehring Company, compute (A) total manufacturing costs and
(B) costs of goods manufactured:
Direct materials used $180,000 Beginning work in process $30,000Direct labor 75,000 Ending work in process 15,000Manufacturing overhead 225,000 Beginning finished goods 38,000Operating expenses 263,000 Ending finished goods 23,000 (A) (B)
a $465,000 $495,000
b $480,000 $465,000
c $480,000 $495,000
d $495,000 $510,000
131 Penner Company reported total manufacturing costs of $195,000, manufacturing
overhead totaling $39,000, and direct materials totaling $48,000 How much is direct laborcost?
a Cannot be determined from the information provided
b $282,000
c $87,000
d $108,000
132 Given the following data for Glennon Company, compute (A) total manufacturing costs
and (B) costs of goods manufactured:
Direct materials used $240,000 Beginning work in process $40,000Direct labor 100,000 Ending work in process 20,000Manufacturing overhead 300,000 Beginning finished goods 50,000Operating expenses 350,000 Ending finished goods 30,000 (A) (B)
a Finished goods inventory
b Work in process inventory
c Cost of goods manufactured
d Raw materials inventory
Trang 21134 The equivalent of finished goods inventory for a merchandising firm is referred to as
a purchases
b cost of goods purchased
c merchandise inventory
d raw materials inventory
135 What term describes all activities associated with providing a product or service?
a The manufacturing chain
b The product chain
c The supply chain
d The value chain
136 How have many companies significantly lowered inventory levels and costs?
a They use activity-based costing
b They utilize an enterprise resource planning system
c They have a just-in-time method
d They focus on a total quality management system
137 Which one of the following managerial accounting approaches attempts to allocate
manu-facturing overhead in a more meaningful fashion?
a Theory of constraints
b Just-in-time inventory
c Activity-based costing
d Total-quality management
138 What is one primary benefit of an enterprise resource planning (ERP) system?
a It reduces inventory levels
b It permits companies to be more streamlined in production
c It replaces research and development in a company
d It requires an increased emphasis on product quality
139 What is “balanced” in the balanced scorecard approach?
a The number of products produced
b The emphasis on financial and non-financial performance measurements
c The amount of costs allocated to products
d The number of defects found on each product
140 For what purpose is the theory of constraints used?
a To reduce product defects
b To balance performance measurement
c To identify and manage constraints that bottle-neck operations
d To reduce inventory levels
141 Which one of the following characteristics would likely be associated with a just-in-time
inventory method?
a Ending inventory of work in process that would allow several production runs
b A backlog of inventory orders not yet shipped
c Minimal finished goods inventory on hand
d An understanding with customers that they may come to the showroom and selectfrom inventory on hand
Trang 22142 Which one of the following is a cost that would not likely be associated with
computer-integrated manufacturing?
a Manufacturing overhead associated with allocation of equipment depreciation
b Direct labor costs of a welder on the production floor
c Manufacturing overhead associated with allocation of the plant lease to the latestproduction run
d Direct materials cost with several fuse plates for a new automobile
143 Which one of the following is an activity not associated with TQM?
a Tightening the bolts on a chassis so that the frame will not drop out
b Redesigning the gas tank after fuel efficiency standards are not being met
c Verifying the 10 check points associated with producing the highest quality loaf ofbread
d Ensuring that the mattress just manufactured meets the standard of comfort of arandom factory line worker
144 What is ERP’s primary benefit?
a It can eliminate stand alone systems that do not share information easily for ment’s use
manage-b It allows management to rely on the simplest way to utilize information systems in amanufacturing environment
c It permits line workers to perform accounting and marketing tasks
d It calculates year end bonuses to a precision not available in traditional informationsystems management
145 Some companies implement systems to reduce defects in finished products with the goal
of achieving zero defects What are these systems called?
a Activity-based costing systems
b Enterprise resource planning systems
c Value chain systems
d Total quality management systems
146 Many companies now manufacture products that are untouched by human hands What
do they use to achieve this?
a Activity-based costing
b Computer-integrated manufacturing
c Enterprise resource planning systems
d Total quality management systems
a147 When a company prepares a worksheet for a manufacturing company, to which column is
the Indirect Labor account extended?
a To the adjustment columns
b To the income statement columns
c To the cost of goods manufactured columns
d To the balance sheet columns
a148 When a worksheet is prepared for a manufacturing company, an offsetting entry must be
made to balance the cost of goods manufactured columns Where does the offsettingentry appear?
a In the balance sheet debit column
b In the income statement debit column
c In the balance sheet credit column
d In the income statement credit column
Trang 23a149 Which one of the following accounts would not appear in the cost of goods manufactured
columns of a worksheet?
a Ending Work in Process Inventory
b Ending Finished Goods Inventory
c Raw Materials Inventory
d Direct Labor
a150 When making closing entries for a manufacturing company, to which account do all
accounts that appear on the cost of goods manufactured schedule get closed?
a Income Summary
b Materials, Labor, and Overhead
c Manufacturing Summary
d Finished Goods Inventory
Additional Multiple Choice Questions
151 Financial and managerial accounting are similar in that both
a have the same primary users
b produce general-purpose reports
c have reports that are prepared quarterly and annually
d deal with the economic events of an enterprise
152 The function that pertains to keeping the activities of the enterprise on track is
a planning
b directing
c controlling
d accounting
153 Property taxes on a manufacturing plant are an element of a
Product Cost Period Cost
154 For a manufacturing company, which of the following is an example of a period cost rather
than a product cost?
a Depreciation on factory equipment
b Wages of salespersons
c Wages of machine operators
d Insurance on factory equipment
155 For a manufacturing firm, cost of goods available for sale is computed by adding the
beginning finished goods inventory to
a cost of goods purchased
b cost of goods manufactured
c net purchases
d total manufacturing costs
Trang 24156 If the cost of goods manufactured is less than the cost of goods sold, which of the
following is correct?
a Finished Goods Inventory has increased
b Work in Process Inventory has increased
c Finished Goods Inventory has decreased
d Work in Process Inventory has decreased
157 The principal difference between a merchandising and a manufacturing income statement
is the
a cost of goods sold section
b extraordinary item section
c operating expense section
d revenue section
158 If the total manufacturing costs are greater than the cost of goods manufactured, which of
the following is correct?
a Work in Process Inventory has increased
b Finished Goods Inventory has increased
c Work in Process Inventory has decreased
d Finished Goods Inventory has decreased
159 The sum of the direct materials costs, direct labor costs, and manufacturing overhead
incurred is the
a cost of goods manufactured
b total manufacturing overhead
c total manufacturing costs
d total cost of work in process
160 The inventory accounts that show the cost of completed goods on hand and the costs
applicable to production that is only partially completed are, respectively
a Work in Process Inventory and Raw Materials Inventory
b Finished Goods Inventory and Raw Materials Inventory
c Finished Goods Inventory and Work in Process Inventory
d Raw Materials Inventory and Work in Process Inventory
Trang 25Answers to Multiple Choice Questions
Item Ans Item Ans Item Ans Item Ans Item Ans Item Ans Item Ans.
(c) Depreciation on manufacturing equip 210,000
(d) Wages for assembly line workers 340,000
Instructions
Enter each cost item in the following table, placing an “X” under the appropriate headings
Product CostsDirect Materials Direct Labor Factory Overhead(a)