MANAGERIAL ACCOUNTING EXAM 1 WILEYPLUS QUESTIONS WITH CORRECT ANSWERS GRADED TO PASS(A+)

1. Which one of the following does not appear on the balance sheet of a manufacturing company? a) Finished goods inventory b) Work in process inventory c) Raw materials inventory d) Cost of goods manufactured - Correct answer 2. The wages of a timekeeper in the factory would be classified as? a) period cost. b) direct labor. - Correct answer c) indirect labor. d) compliance costs. 3. Managerial accounting applies to each of the following types of businesses except? a) managerial accounting applies to all types of firms. - Correct answer b) service firms. c) merchandising firms. d) manufacturing firms. 4. Direct materials and direct labor are the only product costs. a) True b) False - Correct answer 5. Which one of the following is not a direct material? a) Plastic used in the covered case for a home PC b) Steel used in the manufacturing of steel-radial tires c) A tire used for a lawn mower d) Lubricant for a ball-bearing joint for a large crane - Correct answer 6. Because of automation, which component of product cost is declining? a) Advertising b) Direct materials c) Direct labor- Correct answer d) Manufacturing overhead 7. Management accountants would not a) assist in budget planning. b) prepare reports primarily for external users. - Correct answer c) determine cost behavior. d) be concerned with the impact of cost and volume on profits. 8. The raw materials inventory account is used to record which of the following? a) The cost of completed goods ready for sale b) The cost of raw materials purchased and available for use in production. - Correct answer c) The cost of products that have been sold d) The cost of goods manufactured 9. Based on the following data for Walker Company, calculate the cost of goods manufactured: • 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: $830,000 • Direct labor: $440,000 • Manufacturing overhead: $100,000 What is the correct figure for cost of goods manufactured? a) $1,374,000 b) $1,370,000 - Correct answer c) $1,378,000 d) $834,000 10. After reviewing the production data for Laflin Company, determine the correct amount for cost of goods manufactured for the year: • 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 • Direct labor: $900,000 • Manufacturing overhead: $720,000 What is the correct answer? a) $2,400,000 b) $2,580,000 - Correct answer c) $2,760,000 d) $2,220,000 11. Using the following information for Glennon Company, calculate (A) total manufacturing costs and (B) cost of goods manufactured: • Direct materials used: $270,000 • Direct labor: $200,000 • Manufacturing overhead: $250,000 • Beginning work in process inventory: $40,000 • Ending work in process inventory: $20,000 • Beginning finished goods: $50,000 • Ending finished goods: $30,000 • Operating expenses: $350,000 What is the correct combination of total manufacturing costs and cost of goods manufactured? a) $720,000 | $700,000 b) $740,000 | $760,000 c) $720,000 | $740,000 - Correct answer d) $700,000 | $740,000 ________________________________________ 12. Molina Company has a beginning work in process inventory of $130,000 and an ending work in process inventory of $145,000. If the total manufacturing costs incurred during the period were $680,000, calculate the cost of goods manufactured: a) $665,000 - Correct answer b) $825,000 c) $810,000 d) $695,000 12. When products are sold, which of the following is the correct journal entry? a) Debit Cost of Goods Sold and credit Work in Process Inventory b) Debit Work in Process Inventory and credit Finished Goods Inventory c) Debit Cost of Goods Sold and credit Finished Goods Inventory - Correct answer d) Debit Sales Revenue and credit Cost of Goods Sold 13. A materials requisition slip indicates the following: • Direct materials requested: $66,000 • Indirect materials requested: $9,000 Which of the following journal entries correctly records the transfer of these materials from the storeroom? a) Work In Process Inventory $66,000 Manufacturing Overhead $9,000 Raw Materials Inventory $75,000 - Correct answer b) Work In Process Inventory $66,000 Raw Materials Inventory $66,000 c) Direct Materials $66,000 Indirect Materials $9,000 Work in Process Inventory $75,000 d) Manufacturing Overhead $75,000 Raw Materials Inventory $75,000 14. Once a job is completed and costs have been accumulated on the job cost sheet, which journal entry should be made to transfer the costs out of Work in Process? a) Work In Process Inventory Direct Materials Direct Labor Manufacturing Overhead b) Raw Materials Inventory Work In Process Inventory c) Finished Goods Inventory Direct Materials Direct Labor Manufacturing Overhead d) Finished Goods Inventory Work In Process Inventory - Correct answer 15. Presented below are Truck Company's monthly manufacturing costs for personal computer production: • (a) Taxes on factory building — $820,000 • (b) Raw materials — $66,000 • (c) Depreciation on manufacturing equipment — $210,000 • (d) Wages for assembly line workers — $340,000 Classify each cost by marking "X" under the appropriate category: Cost Item Direct Materials Direct Labor Manufacturing Overhead (a) X (b) X (c) X (d) X - Correct answer: (a) Manufacturing Overhead, (b) Direct Materials, (c) Manufacturing Overhead, (d) Direct Labor ________________________________________ 16. Identify whether the following costs should be classified as Product Costs or Period Costs: 1. Direct labor 2. Direct materials 3. Factory utilities 4. Repairs to office equipment 5. Property taxes on factory building 6. Sales salaries Correct classification: 1. Product cost 2. Product cost 3. Product cost 4. Period cost 5. Product cost 6. Period cost 17. Raynor Company has the following production data: • Direct labor: $76,000 • Direct materials used: $84,000 • Manufacturing overhead: $65,000 • Beginning work in process: $45,000 • Ending work in process: $30,000 Calculate the Total Manufacturing Costs and the Cost of Goods Manufactured for the period. a) Total Manufacturing Costs: $225,000, Cost of Goods Manufactured: $240,000 - Correct answer b) Total Manufacturing Costs: $225,000, Cost of Goods Manufactured: $210,000 c) Total Manufacturing Costs: $240,000, Cost of Goods Manufactured: $225,000 d) Total Manufacturing Costs: $210,000, Cost of Goods Manufactured: $240,000 18. Glavine Corporation reported the following manufacturing and period costs: • Materials used in production: $125,000 • Depreciation on plant: $60,000 • Property taxes on store: $7,500 • Labor for assembly line: $110,000 • Factory supplies used: $23,000 • Advertising expense: $45,000 • Property taxes on plant: $19,000 • Delivery expense: $21,000 • Sales commissions: $35,000 • Salaries paid to sales clerks: $50,000 Work-in-process inventory: • Beginning: $27,000 • Ending: $15,500 Finished goods inventory: • Beginning: $65,000 • Ending: $50,600 Compute the Cost of Goods Manufactured and Cost of Goods Sold: a) Cost of Goods Manufactured: $348,500 | Cost of Goods Sold: $362,900 - Correct answer b) Cost of Goods Manufactured: $364,000 | Cost of Goods Sold: $380,000 c) Cost of Goods Manufactured: $348,500 | Cost of Goods Sold: $348,500 d) Cost of Goods Manufactured: $337,000 | Cost of Goods Sold: $362,900 18. Manufacturing overhead is assigned to jobs based on: a) Actual overhead amounts incurred throughout the year b) A predetermined overhead rate set at the start of the year c) Only those overhead costs that can be directly traced to specific jobs d) The total overhead spent at year-end - Correct answer: b) A predetermined overhead rate 19. Which of the following is not used when assigning manufacturing costs to Work in Process Inventory? a) Time tickets b) Predetermined overhead rate c) Materials requisitions d) Actual overhead costs incurred - Correct answer: d) Actual overhead costs incurred 20. In a job order costing system, a credit to Manufacturing Overhead would typically be accompanied by a debit to: a) Finished Goods Inventory b) Work in Process Inventory c) Raw Materials Inventory d) Cost of Goods Manufactured - Correct answer: b) Work in Process Inventory