Managerial Accounting True-False Statements II

Managerial Accounting

Managerial Accounting True-False Statements II

  1. Manufacturing costs that cannot be classified as direct material or direct labor are classified as manufacturing overhead.
  2. Raw materials are equal to direct materials minus indirect materials.
  3. Raw materials that can be conveniently and directly associated with a finished product are called material overhead.
  4. The total cost of a finished product does not generally contain equal amounts of material, labor, and overhead costs.
  5. Direct material costs and indirect material costs are prime costs.
  6. Conversion costs consist of direct labor and manufacturing overhead.
  7. Indirect materials and indirect labor are both inventoriable costs.
  8. Direct labor costs subtracted from prime costs equals manufacturing overhead costs.
  9. Total period costs are deducted from total cost of work in process to calculate cost of goods manufactured.
  10. Period costs are not inventoriable costs.

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Managerial Accounting True-False Statements

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Managerial Accounting True-False Statements in $3.50 only

1. Reports prepared in financial accounting are general-purpose reports, whereas reports

prepared in managerial accounting are usually special-purpose reports.

2. Managerial accounting information generally pertains to an entity as a whole and is highly aggregated.

3. Managerial accounting applies to all forms of business organizations.

4. Determining the unit cost of manufacturing a product is an output of financial accounting.

5. Managerial accounting internal reports are prepared more frequently than are classified financial statements.

6. The management function of directing and motivating is mainly concerned with setting goals and objectives for the entity.

7. An organization chart in a manufacturing company replaces the chart of accounts.

8. Controlling is the process of determining whether planned goals are being met.

9. Decision-making is an integral part of the planning, directing and motivating, and controlling functions.

10. Both direct labor cost and indirect labor cost are product costs.

Top Switch Inc.:Calculate cost in the Raw Materials, Work in Process, and Finished Goods Inventory

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Top Switch Inc.:Calculate cost in the Raw Materials, Work in Process, and Finished Goods Inventory in US$ 8 only                         (Instant Download)

Top Switch Inc. designs and manufactures switches used in telecommunications. Serious flooding throughout the state of Tennessee affected Top Switch’s facilities. Inventory was completely ruined, and the company’s computer system, including all accounting records, was destroyed.

Before the unfortunate incident, recovery specialists cleaned the buildings. The company controller is very nervous and anxious to recover whatever records he can to support the insurance claim for the destroyed inventory. After consulting with the cost accountant, they decide to retrieve the previous year’s annual report for the beginning inventory numbers. In addition, they also agreed that they need first quarter cost data.

The cost accountant was working on the first quarter results before the storm hit, and to his surprise, the report was still in his desk drawer. After reviewing the data , the information shows the following information: Material purchases were $ 325,000; Direct Labor was $ 220,000. Further discussions between the controller and the cost accountant revealed that sales were $ 1,350,000 and the gross margin was 30% of sales. The cost accountant also discovered, while sifting through the information, that cost of goods available for sale was $ 1,020,000 at cost. While assessing the damage, the controller determined that the prime costs were $ 545,000 up to the time of the damage and that manufacturing overhead is 65% of conversion cost. The cost accountant is not sure about all of this, but he decides to see what he can do with the information.

Managerial Accounting True-False Statements III

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Managerial Accounting True-False Statements III

  1. Ending finished goods inventory appears on both the balance sheet and the income statement of a manufacturing company.
  2. The beginning work in process inventory appears on both the balance sheet and the cost of goods manufactured schedule of a manufacturing company.
  3. In calculating gross profit for a manufacturing company, the cost of goods manufactured is deducted from net sales.
  4. Finished goods inventory does not appear on a cost of goods manufactured schedule.
  5. If the ending work in process inventory is greater than the beginning work in process inventory, then the cost of goods manufactured will be less than total manufacturing costs for the period.
  6. Finished goods inventory for a manufacturing company is equivalent to merchandise inventory for a merchandising company.
  7. Raw materials inventory is not an asset until it is used to make a product.
  8. Raw materials inventory shows the cost of completed goods available for sale to customers.
  9. In preparing closing entries for a manufacturing company, all revenue and expense account balances are closed to a Manufacturing Summary account.
  10. To balance the Cost of Goods Manufactured columns of a work sheet for a manufacturing company, an entry must be made in the income statement debit column.

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