1. Complete the following grid for a shoe manufacturer: COST: COMPONENT OF: Direct Materials, Direct Labor, Prime, Conversion, or Both or Factory Overhead Type of expense Leather used to make the pairs of shoes Wax used to polish the leather shoes Product Costs or Period Costs Found on the: COGM Statement, or Income Statement Type of expense Depreciation expense of factory assets Shoe laces Office staff salaries expense 2. Multiple Choice Which of the following is found on the Cost of Goods Manufactured statement? a) Direct Labor costs b) Factory Overhead costs c) Direct Materials Inventory, Beginning Balance d) ALL of these are found on the Cost of Goods Mfg. statement Which of the following is NOT found on the Cost of Goods Manufactured statement? a) Raw Materials Purchases b) Advertising Costs c) Work In Process, Beginning Balance d) Factory Machinery Depreciation Which of the following is NOT a user of internal Managerial Accounting information: a) Bank Creditors, only b) Factory Managers, only c) Both Bank Creditors &Factory Managers use this information d) Neither Bank Creditors nor Factory Managers use this information 4 Which of the following can be classified as both a Prime Cost and a Conversion Cost? a) Direct Materials b) Direct Labor c) Factory Overhead d) All can be classified as both Prime & Conversion Whose Balance Sheets have inventories for Finished Goods, Work in Process, and Materials? a) Service Companies b) Merchandising Companies c) Manufacturing Companies d) All companies have those inventories on the Balance Sheet. Given the following information, what were the total CONVERSION costs for March 2019? Amount Cost: Direct Wages Indirect Materials Direct Mageria Indirect Wages Factory Expenses & Depreciation 50,000 5,000 250,000 25,000 a) $100,000 b) $280,000 c) $300,000 d) $305,000 e) $350,000 f) None of the above is correct Total Factory Costs Direct Materials Inventory Determine the cost of Direct Materials used in production if 150,000 Direct Materials Purchased $30,000 Direct Materials Inventory, October 1 $50,000 Direct Materials Inventory, October 31 a) $130,000 b) $170,000 c) $230,000 d) Cannot be determined based on the information provided 8 Which of the following is NOT one of the three phases of the Managerial Process? b) Planning c) Orchestrating d) Directing 4. True / False Managerial accounting reports serve same purpose as Financial Accounting reports & go to the same users. Managerial accounting reports are ONLY prepared on a monthly basis. 3Managerial reports help users evaluate & plan for the production of the company's products. The company president's salary goes on the Income Statement under "Administrative Expenses. Cost of Goods Manufactured and Cost of Goods Sold statements contain the EXACT same information. Coca-Cola and Pepsi Bottling Co. business will have work In Process inventories on their Balance Sheets. Factory Property Taxes, Maintenance wages, and Shift Supervisor wages are booked as overhead costs. A retail business will have Work In Process inventories on its Balance Sheet. 6 7 Determine the Cost of Goods Manufactured if: Work In Process Inventory $165,000 DM used in production $145,000 Direct Labor $125,000 Work in Process Inventory, October 31 s 70,000 Work in Process Inventory, October 1 $ 65,000 Total Factory Overhead applied Determine the Cost of Goods Sold if: Finished Goods Inventory $165,000 Cost of Goods Manufactured $145,000 Finished Goods Inventory, October 1 $125,000 Finished Goods Inventory, October 31
