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Exam 1: Managerial Accounting Concepts and Principles

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Question 61

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Adopting a lean business model should have no effect on cost in a modern manufacturing environment.

A) True
B) False

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Question 62

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Newly completed units are combined with beginning finished goods inventory to make up total ending work in process inventory.

A) True
B) False

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Question 63

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Jenny, an employee of Toucan Company, used company assets for her own personal gain. This is an example of:

________ reveals how much raw materials inventory is available in terms of the number of days' sales.

Place each of the following costs of a Blu-ray disc manufacturer in the appropriate column. $\begin{array}{|l|l|l|}\hline & & \text { Product cost } \\\hline\end{array}$

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

Which of the following items appears only in a manufacturing company's financial statements?

The following cost items relate to the Henning Company. Classify each cost as a variable cost or a fixed cost by placing an X in the appropriate column. Each cost should be evaluated by how it changes in total with changes in the volume of activity. Also indicate with an X for each item if it is a product cost or a period cost.

Factory overhead costs may include all of the following except:

Use the cost information below for Laurels Company to determine the manufacturing costs added during the current year: $\begin{array}{lr}\text { Direct materials used } & 5,000 \\\text { Direct labor used } & 7,000 \\\text { Total factory overhead } & 5,100 \\\text { Beginning work in process inventory } & 3,000 \\\text { Ending work in process inventory } & 4,000\end{array}$

________ is the deliberate misuse of the employer's assets for the employee's personal gain.

Planning is the process of setting goals and making plans to achieve them.

Products that have been completed and are ready to be sold by the manufacturer are called:

Match each of the following terms with the appropriate definition.

A company's prime costs total $3,000,000 and its conversion costs total $7,000,000. If direct materials are $1,000,000 and factory overhead is $5,000,000, then direct labor is:

Define fraud and give at least two examples of employee fraud.

Use the following information to compute the cost of goods manufactured. Assume that all raw materials used were traceable to specific units of product: $\begin{array} { l r } \text { Beginning raw materials } & 5,500 \\\text { Ending raw materials } & 4,000 \\\text { Direct labor } & 12,250 \\\text { Raw material purchases } & 7,400 \\\text { Depreciation on factory equipment } & 6,500 \\\text { Factory repairs and maintenance } & 3,300 \\\text { Beginning finished goods inventory } & 10,200 \\\text { Ending finished goods inventory } & 8,900 \\\text { Beginning work in process inventory } & 5,700 \\\text { Ending work in process inventory } & 6,300\end{array}$

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.

An approach to managing inventories and production operations such that units of materials and products are obtained and provided only as they are needed is called:

Use the following data to calculate the cost of goods sold for the period: $\begin{array}{lr}\text { Beginning Raw Materials Inventory } & \$ 30,000 \\\text { Ending Raw Materials Inventory } & 70,000 \\\text { Beginning Work in Process Inventory } & 40,000 \\\text { Ending Work in Process Inventory } & 46,000 \\\text { Beginning Finished Goods Inventory } & 72,000 \\\text { Ending Finished Goods Inventory } & 68,000 \\\text { Cost of Goods Manufactured for the period } & 246,000\end{array}$