Student Study Guide for Managerial Accounting, 1-8 16. beginning work in process is the total manufacturing costs for the year. (L.0.6) The sum of the direct materials costs, direct labor costs, and 17. (L.O.6) Beginning work in process inventory plus total current manufacturing costs incurred less ending work in process inventory (L.O.6) The costs assigned to beginning work in process inventory are based on the manufacturing costs incurred in the prior period. (L.0.7) Raw Materials Inventory shows the cost of completed goods on equals the cost of goods manufactured. 18. 19. hand. 20. (L.O. 7) in a manufacturing company balance sheet, manufacturing inventories are reported in the current asset section in the order of their expected use in production. MULTIPLE CHOICE Circle the letter that best answers each of the following statements. 1. (L.O. 1) Which of the following would not describe managerial accounting reports? a. They are internal reports. b. They provide general purpose information for all users. c. They are issued as frequently as the need arises. d The reporting standard is relevance to the decision to be made. 2. (L.O. 1) 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. a. 3. (L.O. 2) The function of coordinating the diverse activities and human resources of a company to produce a smooth running operation is: planning. b. directing controlling d. accounting C. 4. (L.O. 2) The function that pertains to keeping the activities of the enterprise on track is: a. planning b. directing. C. controlling d. accounting Managerial Accounting 1-9 5. (402) The function that involves looking ahead and establishing objectives by manage-ment is: planning directing controlling accounting b. c d 6. (L.O. 4) Direct materials are a: Product Period Cost Cost a. No Yes b. Yes Yes c. No No d. Yes No 7. (L.O.4) Direct labor is a(n): a. nonmanufacturing cost. b. indirect cost. C. product cost. d. period cost. 8. (L.O.4) 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. 9. (L.O. 4) Property taxes on a manufacturing plant are an element of: Product Cost Period Cost a. Yes No b. Yes Yes o c. No Yes d. Non No 10. (L.O. 4) The salary of a plant manager would be considered a: Product Period Cost Cost . Yes Yes b. Yes No No Yes d. No No 11. (L.O. 5) For the year, Mahatma.company has cost of goods manufactured $325,000, beginning finished goods inventory $150,000, and ending finished goods inventory $175,000. The cost of goods sold is. $275,000 $300,000. $325,000. d. $350,000 a. b. C. 1-10 Student Study Guide for Managerial Accounting, 6th Edition (L.O. 5) If the cost of goods manufactured is less than the cost of goods sch 12. which of the following is correct? Finished Goods Inventory has increased. b Work in Process Inventory has increased. Finished Goods Inventory has decreased. d. Work in Process Inventory has decreased. 18 c 13. been started in the manufacturing process, but that are not complete at the end (L.O. 6) The account that shows the cost of production for those units that have 19 of the accounting period is: a. Raw Materials Inventory. b. Work in Process Inventory C. Finished Goods Inventory. d Cost of Goods Sold. 14. $32,000 and $40,000, respectively. If direct materials used were $130,000, what (L.O. 6) Nehru Company has beginning and ending raw materials inventories of was the cost of raw materials purchased? a. $130,000 b. $140,000. c. $122,000. d $138,000. 15. (L.O. 6) Ghindia Company has beginning and ending work in process inventories of $52,000 and $58,000 respectively. If total current manufacturing costs are $248,000, what is the total cost of work in process? $300,000 b. $306,000. C. $242,000. d. $254,000. a. 16. (L.O. 6) Mura Company has beginning work in process inventory of $72,000 and total current manufacturing costs of $318,000. If cost of goods manufactured is $320,000, what is the cost of the ending work in process inventory? a. $60,000. $74,000 $80,000. d. $70,000. b C. 17. (L.O. 6) If the total manufacturing costs are greater than the cost of goods manufactured, which of the following is correct? a. b. C. Work in Process Inventory has increased. Finished Goods Inventory has increased. Work in Process Inventory has decreased. d. Finished Goods Inventory has decreased. 1-12 Student MATCHING Match each term with its definition by writing the appropriate letter in the space provided Definitions Terms a. 1. Direct labor charged to expense as incurred. 2 Period costs. b. 3. Indirect labor. making the product. c. 4 Managerial accounting. 5. Direct materials d. that uses 6. Product costs. 7. Indirect materials. 8. e. Manufacturing overhead. 9. Value chain. Costs that are matched with the revenue of a specific time period and A method of allocating overhead based on each product's use of activities in A field of accounting that provides economic and financial information for managers and other internal users. A performance-measurement approach both financial and nonfinancial measures, tied to company objectives, to evaluate a company's operations in an integrated fashion Work of factory employees that has no physical association with the finished product, or it is impractical to trace the costs to the goods produced. f. Systems implemented to reduce defects in finished products with the goal of achieving zero defects. g. Manufacturing costs that are indirectly associated with the manufacture of the finished product h. All activities associated with providing a product or service. i. The work of factory employees that can be physically and conveniently associated with converting raw . Raw materials that do not physically become part of the finished product or cannot be traced because their physical association with the finished product is 10. Just-in-time inventory. 11 Activity-based costing. 12. Total quality management. 13 Balanced Scorecard. materials into finished goods. for use. too small. k. Inventory system in which goods are manufactured or purchased just-in-time I. Costs that are a necessary and integral part of producing the finished product. m. Raw materials that can be physically and conveniently associated with manufacturing the finished product. Managerial Accounting 1-11 18. a. C. d. 19. (L.O. 7) 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 Work in Process Inventory and Raw Materials Inventory. b. Finished Goods Inventory and Raw Materials Inventory. Finished Goods Inventory and Work in Process Inventory. Raw Materials Inventory and Work in Process Inventory. (L.O. 7) In the current asset section of a balance sheet, manufacturing inventories are listed in the following sequence: Raw Work in Finished Materials Process Goods Inventory Inventory Inventory a. 3 b. 2 1 3 2 d. 3 1 1 NWN C