Chapter 14 Managerial Accounting Concepts and Principles True/False Questions 1. Direct costs are incurred for the benefit of more than one cost object. True False 2. A manufacturer's cost of goods manufactured is the sum of direct materials, direct labor, and factory overhead costs incurred in producing products. True False Multiple Choice Questions 3. Managerial accounting is different from financial accounting in that A. Managerial accounting is more focused on the organization as a whole and financial accounting is more focused on subdivisions of the organization. B. Managerial accounting never includes nonmonetary information C. Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions. D. Managerial accounting is used extensively by investors, whereas financial accounting is used only by creditors. E. Managerial accounting is mainly used to set stock prices. 4. Costs that flow directly to the current income statement are called: A. Period costs. B. Product costs C. General costs. D. Balance sheet costs. E. Capitalized costs 5. Factory overhead of the 5. Factory overhead costs normally include all of the following except: A. Indirect labor costs. B. Indirect material costs. C. Selling costs. D. Machinery oil. E. Factory rent. 6. Which of the following costs is not included in factory overhead? A. Payroll taxes on the wages of supervisory factory workers. B. Indirect labor. C. Depreciation of manufacturing equipment. D. Manufacturing supplies used. E. Direct materials. 7. A company's prime costs total $3,000,000 and its conversion costs total $7,000,000. If direct materials are S1,000,000 and factory overhead is $5,000,000, then direct labor is: A. $4,000,000 B. $14,000,000 C. $2,000,000 D. $1,000,000 E. $3,000,000 8. Use the following data to determine the cost of goods manufactured Beginning finished goods inventory. Dirut labor Beginning rood in v estory Gencral administrative Direct materials used.... Ending ads in poco inventory Indirect labor Ending finished goods inventory 9.500 Indirect materials Depoistic t ory equipe 700 A $102,000. B. $110,100. C. 396.600. D.S113,700. E. S100,200. 9. An internal control system consists of the policies and procedures managers use to do all of the following except: A. Urge adherence to company policies. B. Promote efficient operations. C. Ensure reliable accounting D. Determine pricing for products. E. Protect assets. $1,000,000 and factory overhead is $5,000,000, then direct laboris: A. $4,000,000 B. $14,000,000 C. $2,000,000 D. $1,000,000 E. $3,000,000 8. Use the following data to determine the cost of goods manufactured Beginning finished podemory S 10.800 Direct labor..................... . 30,600 Being poods in pros tory Gencral administrative exp . 13.00 Direct materials used 40.00 Finding goods in process inventory Indirect labor Finding finished goods inventory 500 Indirect materials... 13.500 Deprecate-factory equipment 7.500 A. $102,000. B. S110,100. C. $96,600. D. $113,700. E. S100,200. 9. An internal control system consists of the policies and procedures managers use to do all of the following except: A. Urge adherence to company policies. B. Promote efficient operations. C. Ensure reliable accounting D. Determine pricing for products. E. Protect assets 10. Calculate the cost of goods sold using the following information: Faryodos A. S680,500 B. S701,900. C. $687,100. D. S674,600 E. $772,600
