ACCT 526 Midterm Questions with 100% Correct Answers

Period Costs Correct Answer Costs that are matched with the revenue of a specific time period and charged to expense as incurred. Indirect Labor Correct Answer Work of factory employees that has no physical association with the finished product, or it is impractical to trace the costs to the good produced. Product Costs Correct Answer costs that are a necessary and integral part of producing the finished product Manufacturing Overhead Correct Answer Manufacturing costs that are indirectly associated with the manufacture of the finished product. Managerial Accounting Correct Answer A field of accounting that provides economic and financial information for internal users. Direct Labor Correct Answer The work of factory employees that can be physically and directly associated with converting raw materials into finished goods. Manufacturing Overhead Correct Answer Identify: Factory supervisor's salary Period Costs Correct Answer Identify: Supplies for the general office Direct Materials Correct Answer Identify: Rubber latex purchased for the use in the manufacture of automobile tires Period Costs Correct Answer Identify: Advertising Manufacturing Overhead Correct Answer Identify: Rent on factory equipment Period Costs Correct Answer Identify: Utility cost for the store Period Costs Correct Answer Identify: Salary paid to the company's chief executive officer Manufacturing Overhead Correct Answer Identify: Salary paid to mechanics who maintain and repair factory equipment Direct Labor Correct Answer Identify: Wages paid to assembly-line workers who install interiors in automobiles a. deal with the economic events of an enterprise Correct Answer Financial and managerial accounting are similar in that both: a. deal with the economic events of an enterprise. b. produce general-purpose reports. c. have the same primary users. d. have reports that are prepared quarterly and annually. c. the product is sold Correct Answer Product costs are expenses on the income statement when: a. the product completes the manufacturing process. b. the order is received for the product. c. the product is sold. d. raw materials for the product are purchased. a. $22,500 15,500 + 44,500 - 37,500 = Correct Answer Super Tread Inc. is a large manufacturer of auto tires. Super Tread has provided the following information: Sales Revenue $55,000 Beginning Finished Goods Inventory $15,500 Cost of Goods sold $37,500 Cost of Goods Manufactured $44,500 Calculate the amount of ending Finished Goods Inventory reported on Super Tread's balance sheet. c. $1,135,000 Direct Materials (81,000+360,000-59,000) + Direct Labor (471,000) + Factory Overhead (19,000+24,000+268,000) + Work-in-Process (26,000-55,000) Correct Answer Payton Corporation provided the following information for the year: Beginning Balance - Work-in-Process Inventory $26,000 Ending Balance - Work-in-Process Inventory $55,000 Beginning Balance - Direct Materials 81,000 Ending Balance - Direct Materials 59,000 Purchases - Direct Materials 360,000 Direct Labor 471,000 Indirect Labor 19,000 Depreciation on Factory Plant and Equipment 24,000 Plant Utilities and Insurance 268,000 What was the amount of the cost of goods manufactured for the year? a. $1,363,000 b. $1,193,000 c. $1,135,000 d. $1,164,000 c. $86,620 Product Costs = Direct Materials (27,500) + Direct Labor (36,000) + factory repair and maintenance (920) + Manufacturing equipment depreciation (1,200) + Indirect materials (8,000) + Indirect labor (13,000) Correct Answer The following relates to Harrison, Inc: Advertising Costs $10,600