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Exam 1: Managerial Accounting Concepts and Principles

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Question 41

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The management concept of customer orientation encourages a company to set up its production system to produce large quantities of the same product for all customers.

A) True
B) False

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Question 42

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Total quality management (TQM) focuses on quality improvement and applies this standard to all aspects of business activities.

A) True
B) False

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Question 43

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Total variable costs change in proportion to changes in the volume of activity.

The schedule of cost of goods manufactured is divided into four parts consisting of all of the following except:

Costs that are capitalized as inventory when they are incurred are called:

Although direct labor and raw materials costs are treated as manufacturing costs and therefore make up part of the finished goods inventory cost, factory overhead is charged to expense as it is incurred because it is a period cost.

Current information for the Stellar Corporation follows: $\begin{array} { | l | r | } \hline \text { Beginning work in process inventory } & \$ 17,900 \\\hline \text { Ending work in process inventory } & 19,300 \\\hline \text { Direct materials } & 147,000 \\\hline \text { Direct labor } & 85,000 \\\hline \text { Total factory overhead } & 63,100\\\hline \end{array}$ Stellar Corporation's Cost of Goods Manufactured for the year is:

Indirect costs cannot be easily and cost-beneficially traced to a single cost object.

Both financial and managerial accounting affect user's decisions and actions.

A ________ system means that a company acquires or produces inventory only when needed.

An employee devises a payroll scheme that costs the employer $150. The employer discovers the fraud but decides not to confront the employee since the amount of the fraud is small. Discuss why this course of action is not advisable.

Products that are in the process of being manufactured but are not yet complete are called:

Current information for the Healey Company follows: $\begin{array} { | l | r | } \hline \text { Beginning raw materials inventory } & \$ 15,200 \\\hline\text { Raw material purchases } & 60,000 \\\hline \text { Ending raw materials inventory } & 16,600 \\\hline m\text { Beginning work in process inventory } & 22,400 \\\hline \text { Ending work in process inventory } & 28,000 \\\hline \text { Direct labor } & 42,800 \\\hline \text { Total factory overhead } & 30,000 \\\hline\end{array}$ All raw materials used were traceable to specific units of product. Healey Company's Cost of Goods Manufactured for the year is:

________ is an activity that provides financial and nonfinancial information to an organization's managers and other internal decision makers.

Raw materials inventory should not include indirect materials.

Product costs are capitalized as inventory on the balance sheet and period costs are expensed on the income statement.

Manufacturing costs other than direct materials and direct labor, and are not readily traceable to specific units or batches of production are called:

Mustang Corporation has accumulated the following accounting data for the month of April: Finished goods inventory, January 1 ………. $3,200 Finished goods inventory, December 31 …... 4,000 Total cost of goods sold ……………………. 14,200 The cost of goods sold for the year is:

The following information relates to the manufacturing operations of the Abbra Publishing Company for the year: Beginning Ending Raw materials inventory $ 547,000 $ 610.l000 The raw materials used in manufacturing during the year totaled $1,018,000. Raw materials purchased during the year amount to:

The raw materials inventory turnover is raw materials purchased divided by the average raw materials inventory.