An approach to managing inventories and production operations such that units of materials and products are obtained and provided only as they are needed is called:

Multiple Choice

• Continuous improvement.
• Customer orientation.
• Just-in-time manufacturing.
• Theory of constraints.
• Total quality management.

A manufacturing firm's cost of goods manufactured is equivalent to a merchandising firm's:

Multiple Choice

• Cost of goods sold.
• Cost of goods purchased.
• Cost of goods available.
• Beginning merchandise inventory.
• Ending merchandise inventory.

Use the cost information below for Laurels Company to determine the cost of goods manufactured during the current year:

Direct materials used	$	5,000
Direct labor		7,000
Total factory overhead		5,100
Beginning work in process		3,000
Ending work in process		4,000

Multiple Choice

• $12,000.
• $16,100.
• $17,100.
• $18,100.
• $13,600.

Xia Co. manufactures a single product. All raw materials used are traceable to specific units of product. Current information for company follows:

Beginning raw materials inventory	$	8,000
Ending raw materials inventory		11,000
Raw material purchases		85,000
Beginning work in process inventory		20,000
Ending work in process inventory		30,000
Direct labor		110,000
Total factory overhead		85,000
Beginning finished goods inventory		60,000
Ending finished goods inventory		40,000

The company's cost of direct materials used, cost of goods manufactured and cost of goods sold is:

Multiple Choice

	Cost of Materials Used	Cost of Goods Manufactured	Cost of Goods Sold
A.	$85,000	$267,000	$247,000

B.

$88,000

$267,000

$287,000

C.

$82,000

$287,000

$247,000

D.

$82,000

$267,000

$287,000

E.

$88,000

$287,000

$267,000

Which of the following is an indirect cost of manufacturing scooters?

Multiple Choice

• Scooter assembly wages.
• Wheels.
• Supervisor salary.
• Brakes
• Assembly worker employee benefits.

Which of the following items appears only in a manufacturing company's financial statements?

Multiple Choice

• Cost of goods sold.
• Cost of goods manufactured.
• Goods available for sale.
• Gross profit.
• Net income.

Use the cost information below for Ruiz, Inc. to determine cost of goods manufactured for the year:

Work in Process, January 1	$	52,200
Work in Process, December 31		38,100
Total factory overhead		6,600
Direct materials used		13,600
Direct labor used		27,600

Multiple Choice

• $55,300.
• $47,800.
• $61,900.
• $14,100.
• $100,000.

Which of the following costs would not be classified as factory overhead?

Multiple Choice

• Property taxes on maintenance machinery.
• Insurance on factory building.
• Wages of the factory janitor.
• Rubber for the soles of shoes produced.
• Small tools used in production.

Mustang Corporation reports the following for the month of April:

Finished goods inventory, April 1	$	31,700
Finished goods inventory, April 30		25,900
Total cost of goods manufactured		120,600

The cost of goods sold for April is:

Multiple Choice

• $175,600.
• $114,800.
• $63,000.
• $126,400.
• $152,300.

A company's prime costs total $4,500,000 and its conversion costs total $5,500,000. If direct materials costs are $2,000,000, calculate the overhead costs:

Multiple Choice

• $2,500,000.
• $3,500,000.
• $2,000,000.
• $1,000,000.
• $3,000,000.

Which of the following statements is true regarding product and period costs?

Multiple Choice

• Office salaries expense and factory maintenance are both product costs.
• Office rent is a product cost and supervisors' salaries expense is a period cost.
• Factory rent is a product cost and advertising expense is a period cost.
• Delivery expense is a product cost and indirect materials is a period cost.
• Sales commissions and indirect labor are both period costs.

A company's prime costs total $3,000,000 and its conversion costs total $7,000,000. If direct materials are $1,000,000 and factory overhead is $5,000,000, then direct labor is:

Multiple Choice

• $4,000,000.
• $14,000,000.
• $2,000,000.
• $1,000,000.
• $3,000,000.

Which of the following is not a direct cost for a scooter manufacturer?

Multiple Choice

• Office rent.
• Wheels.
• Handle bars.
• Brakes.
• Grip tape.

Current information for the Healey Company follows:

Beginning raw materials inventory	$	15,200
Raw material purchases		60,000
Ending raw materials inventory		16,600
Beginning work in process inventory		22,400
Ending work in process inventory		28,000
Direct labor		42,800
Total factory overhead		30,000

All raw materials used were traceable to specific units of product. Healey Company's cost of goods manufactured for the year is:

Multiple Choice

• $125,800.
• $128,600.
• $131,400.
• $137,000.
• $139,000.

Flash Company produces lamps. All of the following are direct costs except:

Multiple Choice

• Wages for assembly.
• Electrical cord.
• Factory rent.
• Lamp shade.
• Switch.

Using the information below, compute the days' sales in raw materials inventory:

Raw materials used	$	97,500
Beginning raw materials inventory		9,200
Ending raw materials inventory		11,400

Multiple Choice

• 10.36.
• 38.60.
• 9.47.
• 10.56.
• 42.68.

Asteroid Industries accumulated the following cost information for the year:

Direct materials	$	16,000
Indirect materials		4,000
Indirect labor		8,500
Factory depreciation		12,800
Direct labor		37,000

Using the above information, total factory overhead costs equal:

Multiple Choice

• $78,300.
• $25,300.
• $12,800.
• $16,800.
• $53,000.

Use the following data to compute total factory overhead costs for the month:

Sales commissions	$	10,800
Direct labor		39,600
Indirect materials		15,200
Factory manager salaries		7,200
Factory supplies		9,000
Indirect labor		6,300
Depreciationoffice equipment		5,000
Direct materials		40,500
Corporate office salaries		42,500
Depreciationfactory equipment		7,500

Multiple Choice

• $141,100.
• $125,300.
• $45,200.
• $84,800.
• $58,300.

All of the following statements regarding manufacturing costs are true except:

Multiple Choice

• Direct material costs are traceable to products.
• The reporting of fixed and variable costs separately is not helpful to managers in analyzing cost behavior.
• When overhead costs vary with production, they are called variable overhead.
• When overhead costs don't vary with production, they are called fixed overhead.
• Overhead can be both variable and fixed.

A management concept that seeks to uncover and eliminate waste in business activities is called:

Multiple Choice

• Continuous operations.
• Customer orientation.
• Just-in-time.
• Theory of constraints.
• Lean business model.