ACCT Exam 3 LSU | Questions and Answers (Complete Solutions)

ACCT Exam 3 LSU | Questions and Answers (Complete Solutions) All of the following are distinguishing features of managerial accounting except a- to provide special-purpose information. b- internal users. c- independent ...

ACCT Exam 3 LSU | Questions and Answers (Complete Solutions) All of the following are distinguishing features of managerial accounting except a- to provide special-purpose information. b- internal users. c- independent audits. d- reports pertaining to subunits of the entity. The process of keeping the company's activities on track is a- controlling. b- planning. c- directing. d- evaluating. Which of the following statements is true about managerial accounting? a- It is primarily for internal users such as stockholders and managers. b- It pertains to a business as a whole. c- It must be prepared using generally accepting accounting principles. d- It provides more detailed information than financial accounting does. The management of an organization performs several broad functions. They are a- planning, manufacturing, and controlling. b- planning, directing, and controlling. c- planning, directing, and selling. d- directing, manufacturing, and controlling. Which of the following costs are classified as a period cost? a- Wages paid to a factory custodian. b- Wages paid to an assembly worker. c- Wages paid to a cost accountant department supervisor. d- Wages paid to a production department supervisor. On average, studies have shown that the smallest component of total manufacturing cost is a- direct materials. b- manufacturing overhead. c- factory overhead. d- direct labor. Pharmco incurred the following costs while manufacturing its product: Materials used in production, $120,000; factory depreciation, $60,000; property taxes on the administrative offices, $12,000; labor costs of assembly-line workers, $95,000; factory supplies used, $8,000; advertising expense, $13,000; property taxes on the factory, $20,000; delivery expense, $23,000; salaries of the sales staff, $53,000; and sales commissions, $17,000. The total product costs for Pharmco are a-$315,000. b- $303,000. c- $391,000. d- $421,000. Which of the following answer choices lists the three manufacturing costs? a- Raw materials, work in process, and finished goods b- Indirect materials, indirect labor, and factory-related costs c- Direct materials, direct labor, and manufacturing overhead d- Work in process, finished goods, and cost of goods sold Which of the following costs would a computer manufacturer include in manufacturing overhead? a- The cost of the memory chips. b- Depreciation on testing equipment. c- The wages earned by computer assemblers. d- The cost of the disk drives. Barry's BarBQue incurred the following costs: $1,400 for ribs, 45 hours of labor to cook the ribs at $10 per hour, $50 for seasoning and sauce, $300 for signs to advertise the ribs, $150 to clean the grill after cooking the ribs, and $100 of administrative costs. How much are total product costs? a- $1,850 b- $2,050 c- $2,150 d- $2,350 Manders Corporation has $20,000 of ending finished goods inventory at December 31. If beginning finished goods inventory was $15,000 and cost of goods sold was $40,000, how much would Manders Corporation report as cost of goods manufactured? $5,000. $55,000. $75,000. $45,000. (40,000+ 20,000- 15,000) (cost of goods sold+ending finished goods inventory-beginning finishes goods inventory) For the year, Redder Company has cost of goods manufactured of $600,000, beginning finished goods inventory of $200,000, and ending finished goods inventory of $250,000. The cost of goods sold is a- $600,000. b- $450,000. c- $500,000. d- $550,000. (beginning finished goods inventory (20,000) + cost of goods manufactured (600,000) - ending finished goods inventory (250,000) Checker Clackers, Inc. manufactures clackers. Checker's transactions and accounts included the following during June: Raw materials inventory, beginning $1,200 Raw materials inventory, ending 1,400 Work in process inventory, beginning 7,100 Work in process inventory, ending 6,800 Raw materials acquired 27,800 Cost of direct materials used in production 27,600 Sales commissions to sell clackers 2,100 Direct labor cost 20,000 Total manufacturing overhead 28,900 How much is cost of goods manufactured for June? a- $78,900 b- $76,500 c- $77,000 d- $76,800 Model Magic Manufacturing reported the following year-end balances: Beginning work in process inventory, $35,000; beginning raw materials inventory, $18,000; ending work in process inventory, $38,000; ending raw materials inventory, $15,000; raw materials purchased, $510,000; direct labor, $180,000; and manufacturing overhead, $75,000. What is the amount of total work in process for Model Magic for the current year? a- $768,000. b- $803,000. c- $765,000. d- $513,000. (18,000+510,000-15,000) =513,000 then (35,000+513,000+75,000)= 803,000 For Carla Vista Company, variable costs are 70% of sales, and fixed costs are $230,100. Management's net income goal is $88,500.Compute the required sales in dollars needed to achieve management's target net income of $88,500. (Use the contribution margin approach.) $1062000 (230,100+88,500)= 318600 1-70=30% 318600 x 100/30= 1062000 Coordinating the preparation of the budget is the responsibility assigned to the a- lower levels of management. b- budget committee. c- accounting department. d- management. Which of the following companies is likely to have the least formal budget process? a- Trending Fashions, a new business that is trying to get investment funding b- Betty's Bakery, a small-town bakery that has been open for three years c- Jet Ski Haven, a jet ski rental company with rental offices along the U.S. coasts d- Altman Industries, an international manufacturing company Cara's Wedding Designs makes and sells bridal dresses, bridesmaids' dresses, tuxedos, and suits. The company plans to produce 60 dresses during the next month and will require 390 yards of fabric for production. The total fabric required for the month is 429 yards. What are the direct materials per dress? 7.15 yards 6.5 yards 1.1 yards .65 yards Development of the operating budget begins with the a- sales budget. b- cash budget. c- materials budget. d- overhead budget. Toledo Manufacturing has the following variable overhead costs:Indirect materials: $2.18/hourIndirect labor: $3.26/hourUtilities: $0.90/hourMaintenance: $0.33/hourDirect labor hours: 14,500 hoursIf Toledo decides that they need to increase their indirect materials to $2.25 per hour, how much will this increase the company's total variable costs at this level of activity? $1,150 $730 $1,015 $980 The function that pertains to keeping the activities of the enterprise on track is: a. Planning b. Directing c. Controlling d. Accounting 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 salesperson c. Wages of machine operator d. Insurance on factory equipment 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: a. $275,000 b. $300,000 c. $325,000 d. $350,000 The salary of a plant manager would be considered a: Product Cost Period Cost a. Yes Yes b. Yes No c. No Yes d. No No Costs that vary in total directly and proportionately with changes in the activity level are: a. Variable costs b. Fixed costs c. Mixed costs d. Semi-variable costs The contribution margin ratio increases when: a. Fixed costs increase. b. Fixed costs decrease. c. Variable costs as a percentage of sales decrease. d. Variable costs as a percentage of sales increase. Dolce Company is planning to sell 400,000 hammers for $1.50 per unit. The contribution margin ratio is 20%. If Dolce will break even at this level of sales, what are the fixed costs? a. $120,000 b. $280,000 c. $400,000 d. $480,000 At the break-even point, fixed costs are: a. Less than the contribution margin. b. Equal to the contribution margin. c. More than the contribution margin. d. Indeterminate of the contribution margin. Livingston Co. has fixed costs of $60,000 and a contribution margin ratio of 30%. How much in dollar sales does Livingston Co. need to have to break-even? a. 0 b. $60,000 c. $180,000 d. $200,000 The Turlington Company has 12,000 units in beginning finished goods. If sales are expected to be 60,000 units for the year and Turlington desires ending finished goods of 15,000 units, how many units must Turlington produce? a. 57,000 b. 60,000 c. 63,000 d. 75,000 In the Campbell Company required production for June is 44,000 units. To make one unit of finished product, three pounds of direct material Z are required. Actual beginning and desired ending inventories of direct material Z are 100,000 and 110,000 pounds, respectively. How many pounds of direct material Z must be purchased? a. 126,000 b. 132,000 c. 136,000 d. 142,000 For better management acceptance, the flow of input date for budgeting should begin with the: a. Accounting department b. Top management c. Lower level of management d. Budget committee The starting point in preparing the master budget is the a. Cash budget b. Budgeted income statement c. Direct materials budget d. Sales budget At the beginning of the year, Opal Company has a cash balance of $23,000. During the year, the company expects cash disbursements of $160,000, and cash receipts of $140,000. If Opal Company requires an ending cash balance of $20,000, how much must the company borrow? a. $20,000 b. $0 c. $17,000 d. $40,000 Microtech plans to sell 2,000 computers in April; 1,900 in May; and 2,000 in June. The company keeps 15% of the next month's sales as ending inventory. How many units should Microtech produce in May? a. Amount cannot be determined due to insufficient information. b. $1,885 c. $1,915 d. $2,200 The ________ function pertains to keeping the activities of the enterprise on track. a. directing b. planning c. controlling d. accounting A merchandising company has _______ lines under the Inventory section of the balance sheet compared to a manufacturing company. a. more b. fewer c. no d. answer cannot be determined After focusing for so long on total quality management, Mobley Industries found that while their product defects decreased by 18%, their product costs increased by 42%. What can they do to bring down their costs? a. Focus on corporate social responsibility b. Use activity-based costing c. Implement a balanced scorecard approach d. Implement an enterprise resource planning system ________ would be reported on the income statement as expenses when they are incurred. a. Product costs b. Direct materials c. Period costs d. Indirect materials Jaime K. owns a small gear manufacturing plant. Jaime's gears are sold to large earth-moving equipment manufacturers. Jamie considers which of the following a product cost? advertising costs sales commissions depreciation of delivery trucks production manager's salary Decision-making _______________ a separate management function. is is not cannot be determined as None of these answers are correct Cupid Co. manufactures dog toys. For 2022, it had the following amounts related to its most popular toy, Bacon Ben: beginning finished goods inventory, $30,000, cost of goods manufactured $120,000, and cost of goods sold $100,000. What was the amount of ending finished goods inventory? $30,000 $10,000 $20,000 $50,000 cost of goods manufactures - cost of goods sold + beg finished inventory Determining the cost per unit to manufacture the company's most popular product is an activity performed by a marketing manager. financial accountant. managerial accountant. sales manager. Which is an example of an overhead cost? flour used in the manufacture of frozen cookie dough sugar used in the manufacture of breakfast cereal electricity used to run a manufacturing plant wages of an assembly line worker When inventory is recorded on the balance sheet at cost, which of the following is included in the computation of that cost? depreciation of corporate office computers depreciation of the manufacturing plant marketing costs electricity costs of the corporate office Which of the following costs would be not expensed in the period incurred? Salary of the company treasurer Sales commissions paid to company salespeople Depreciation on computers used in the corporate offices Jaime K. owns a small gear manufacturing plant. Jaime's gears are sold to large earth-moving equipment manufacturers. Jamie considers which of the following a period cost? advertising expense for products manufactured in the factory oil and grease used as a lubricant for factory machinery depreciation expense on factory equipment property taxes on the factory Patti Mazzeo runs Mama J's Pizza Shop. Each pizza is hand-made on the premises and customized to each customer's specific order. Which of the following positions is considered direct labor? worker who takes the customer's order worker who delivers the pizza worker who monitors the oven and rotates each pizza as needed for even baking worker who busses and cleans tables Anderson Manufacturing has direct material costs of $3.00 per unit, advertising costs of $.20 per unit, manufacturing overhead of $1.90 per unit, administrative expenses of $1.30 per unit, and direct labor of $2.40 per unit. What is Anderson's total product cost per unit? $8.80 $7.30 $5.40 $7.50 $3+ $1.90 +$2.40 The main difference between the balance sheet of a merchandising company and a manufacturing company is that a merchandising company has one type of inventory on its balance sheet, whereas a manufacturing does not report inventory on its balance sheet. more than one type of inventory, whereas a manufacturing company has one type of inventory. no inventory reported on its balance sheet, whereas a manufacturing company has one type of inventory on its balance sheet. one type of inventory, whereas a manufacturing company has more than one type of inventory. The costs of goods manufactured schedule reports only the cost elements used in calculating a. the cost of goods manufactured. b. cost of raw materials.