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Exam 1: Managerial Accounting Concepts and Principles

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Question 111

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The following information relates to the manufacturing operations of the JNR Printing Company for the year: 11edcbcd $\begin{array}{lrr} & \text { Beginning } & \text { Ending } \\\text { Raw materials inventory } & \$ 57,000 & \$ 60,000 \\\text { Finished goods } & 68,000 & 60,000\end{array}$ The raw materials used in manufacturing during the year totaled $118,000. Raw materials purchased during the year amount to:

A) $107,000.
B) $115,000.
C) $118,000.
D) $121,000.
E) $126,000.

F) A) and D)
G) D) and E)

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Question 112

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Product costs:

A) Are expenditures necessary and integral to finished products.
B) Are expenditures identified more with a time period rather than with units of product.
C) Include selling and administrative expenses.
D) Are expensed on the income statement when incurred.
E) Are moved to the income statement for any unsold inventory at the end of the year.

F) C) and D)
G) B) and E)

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Question 113

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Explain what is meant by the "lean business model" and why many businesses have adopted it.

Product costs are expenditures necessary to manufacture finished products.

The model whose goal is to eliminate waste while satisfying the customer and providing a positive return to the company is the ________.

Total quality management (TQM) is a system that acquires inventory and produces only when needed.

________ inventory consists of completed products ready for sale by a manufacturer.

Richards Company manufactures a single product. All raw materials used are traceable to specific units of product. Current information for the company follows: $\begin{array}{lr}\text { Beginning raw materials inventory } & \$ 10,000 \\\text { Ending raw materials inventory } & 12,000 \\\text { Raw material purchases } & 90,000 \\\text { Beginning work in process inventory } & 40,000 \\\text { Ending work in process inventory } & 25,000 \\\text { Direct labor } & 130,000 \\\text { Total factory overhead } & 60,000 \\\text { Beginning finished goods inventory } & 55,000 \\\text { Ending finished goods inventory } & 45,000\end{array}$ The company's cost of direct materials used, cost of goods manufactured and cost of goods sold is:

An employee is dissatisfied with the resolution of an ethical conflict with his supervisor at his place of employment. According to the Institute of Management Accountants, the employee's next step should be to:

What is the main difference between the income statement of a manufacturer and that of a merchandiser?

Use the cost information below for Sundar Company to determine the total manufacturing costs added during the current year: $\begin{array}{lr}\text { Direct materials used } & \$ 19,000 \\\text { Direct labor used } & 24,500 \\\text { Factory overhead } & 55,100 \\\text { Beginning work in process inventory } & 10,700 \\\text { Ending work in process inventory } & 11,300\end{array}$

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

Period costs can refer to expenditures necessary to manufacture products during the time period.

Using the information below, calculate net income for the period: $\begin{array}{lr}\text { Sales revenues for the period }&\$1,304,000\\\text {Operating expenses for the period }&239,000\\\text {Finished Goods Inventory, January 1 }&36,000\\\text {Finished Goods Inventory, December 31 }&41,000\\\text {Cost of goods manufactured for the period }&540,000\\\end{array}$

The Work in Process Inventory account is found only in the ledgers of merchandising companies.

Indirect materials are accounted for as factory overhead because they are not clearly identified with specific product units.

An employee overstates his reimbursable expenses in one period in order to receive needed additional cash. Since he intends to reduce his expenses the next period by the current overstatement, this act is not considered fraudulent.

An attitude of constantly seeking ways to improve company operations, including customer service, product quality, product features, the production process, and employee interactions, is called:

Expenditures directly associated with the manufacture of finished goods that include direct materials and direct labor, are ________ costs.

When the attitude of continuous improvement exists throughout an organization, every manager and employee is challenged to continuously experiment with new and improved business practices.