Deck 14: Overview of Managerial Accounting, Managerial Accounting Concepts and Cost Flows

Question 1

When goods are sold, the costs associated with those goods are transferred from Work in Process to Cost of Goods Sold.

Answer 1

False

Question 2

Which of the following entries correctly reflects the entry for the requisition of materials (direct and indirect) for use in production?

A) Materials Inventory
$\quad$ $\quad$ $\quad$ Direct Materials
$\quad$ $\quad$ $\quad$ Indirect Materials
B) Materials Inventory
$\quad$ $\quad$ $\quad$ $\quad$ Accounts Payable
C) Materials Inventory
$\quad$ $\quad$ $\quad$ Work in Process Inventory
$\quad$ $\quad$ $\quad$ Manufacturing Overhead
D) Work in Process Inventory
$\quad$ $\quad$ $\quad$ $\quad$ Manufacturing Overhead
$\quad$ $\quad$ $\quad$ $\quad$ Materials Inventory

Answer 2

Work in Process Inventory
$\quad$ $\quad$ $\quad$ $\quad$ Manufacturing Overhead
$\quad$ $\quad$ $\quad$ $\quad$ Materials Inventory

Question 3

Which of the following entries correctly reflects the entry for recording the wages of all factory workers?

A) Wage Expense
$\quad$ $\quad$ $\quad$ $\quad$ Work in Process Inventory
B) Work in Process Inventory
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Wages Expense
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Cash
C) Work in Process Inventory
Manufacturing Overhead
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Wages Payable
D) Direct Labor Expense
Indirect Labor Expense
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Wages Payable

Answer 3

Work in Process Inventory
Manufacturing Overhead
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Wages Payable

Question 4

Quincy Manufacturing, Inc. makes kitchen appliance replacement parts. In May, Quincy produced 2000 units. Costs incurred were as follows:
:
Given this data, the total Prime Cost for the units produced in the month of May was

A) $29,600
B) $120,000
C) $149,600
D) $140,000
E) None of the above

Question 5

Countertops Unlimited, a manufacturer of kitchen and bath countertops, had the following information for production last period:
Assuming that all manufacturing overhead was applied to Work in Process inventory, Total Manufacturing Costs for the period was:

A) $217,000
B) $125,000
C) $342,000
D) $367,000
E) None of the above

Question 6

Managerial accounting is primarily concerned with providing information to external users, while financial accounting is used for internal decision making.

Question 7

What is a merchandising firm?

Question 8

What is the purpose of a "safety stock" of inventory?