Question 1

Rocha & Noel Inc.had cost of goods sold of $123,200 for the current year ended December 31.The finished goods inventory on January 1 was $30,800, and the finished goods inventory on December 31 was $18,700.What was the amount of cost of goods manufactured for the year?

Accepted Answer

SUPPORTING CALCULATIONS:
 
 11ea8a4c_491c_4b14_a0e6_79cb2b8202b4_TB5550_00

Question 2

Wright & Boyle Inc.had the following income statement for the month of May:
- What was the selling expense percent? (Note: Round answer to two decimal places.)

Accepted Answer

SUPPORTING CALCULATIONS:
Selling expenses percent = Selling expenses / Sales revenue
$86,199.20 / $470,800 = 18.31%

Question 3

Hendrix & Franks Company had the following beginning and ending inventory balances for the current year ended December 31:  
 In addition, direct labor costs of $33,000 were incurred, manufacturing overhead equaled $46,200, materials purchased were $29,700, and selling and administrative costs were $24,200.Hendrix & Franks Co.sold 27,500 units of product during the year at a sales price of $5.25 per unit.
-What was the amount of cost of goods manufactured for the year?

Accepted Answer

SUPPORTING CALCULATIONS:
 11ea8a4c_491a_eb77_a0e6_c18fb3cb4c4f_TB5550_00

Question 4

Wright & Boyle Inc.had the following income statement for the month of May:
-  What was the administrative expense percent? (Note: Round answer to two decimal places.)

Accepted Answer

SUPPORTING CALCULATIONS:
Administrative expense percent = Administrative expenses percent / Sales revenue
$74,942.80 / $470,800 = 15.92%

Question 5

Which of the following would not be found on an income statement of a service organization?

Accepted Answer

Cost of goods sold refers to the cost of producing or purchasing products that are sold. Service organizations, which do not produce or sell goods, do not have a cost of goods sold on their income statement. The other options (selling expenses, operating income, and sales revenue) would typically be found on an income statement for a service organization.

Question 6

Which of the following can be found on the income statements of both a manufacturing and service organization?

Accepted Answer

All of these items—revenues, operating income, and administrative expenses—are common to the income statements of both manufacturing and service organizations. Revenues represent the income earned from the sale of goods or services, operating income reflects the profit from operations after deducting operating expenses, and administrative expenses are the overhead costs not directly tied to a specific function like manufacturing or sales but necessary for the overall administration of the business.

Question 7

Thomas & Cooke Inc.had a gross margin for the month of February totaling $46,200.They sold 5,500 units during the month at a sales price of $22 per unit.What was the amount of cost of goods sold for the month?

Accepted Answer

SUPPORTING CALCULATIONS:
 11ea8a4c_491c_7225_a0e6_036cea6557bc_TB5550_00

Question 8

Hendrix & Franks Company had the following beginning and ending inventory balances for the current year ended December 31:  
 In addition, direct labor costs of $33,000 were incurred, manufacturing overhead equaled $46,200, materials purchased were $29,700, and selling and administrative costs were $24,200.Hendrix & Franks Co.sold 27,500 units of product during the year at a sales price of $5.25 per unit.
- What was the operating income (loss) for the year?

Accepted Answer

SUPPORTING CALCULATIONS:
 
 11ea8a4c_491b_aecf_a0e6_83849983b420_TB5550_00  
 11ea8a4c_491b_d5e0_a0e6_b91798e5c6b8_TB5550_00 11ea8a4c_491b_d5e1_a0e6_1f4417b6fa1f_TB5550_00

Question 9

Wright & Boyle Inc.had the following income statement for the month of May:
- What was the gross margin percent? (Note: Round answer to two decimal places.)

Accepted Answer

SUPPORTING CALCULATIONS: $222,560 / $428,000 =
Gross margin percent = Gross margin / Sales revenue
$253,033.60 / $470,800 = 53.75%

Question 10

Gross margin percent equals

Accepted Answer

Gross margin percent is a financial ratio that shows the percentage of revenue that exceeds the cost of goods sold. It is calculated by dividing the gross margin (revenue minus cost of goods sold) by the sales revenue. Therefore, the correct formula is (gross margin/sales revenue) * 100%, which corresponds to choice C.

Question 11

Hendrix & Franks Company had the following beginning and ending inventory balances for the current year ended December 31:  
 In addition, direct labor costs of $33,000 were incurred, manufacturing overhead equaled $46,200, materials purchased were $29,700, and selling and administrative costs were $24,200.Hendrix & Franks Co.sold 27,500 units of product during the year at a sales price of $5.25 per unit.
- What was the amount of cost of goods sold for the year?

Accepted Answer

SUPPORTING CALCULATIONS:
 
 11ea8a4c_491b_1289_a0e6_b74d003ca254_TB5550_00 11ea8a4c_491b_399a_a0e6_fd4bcf06c9fa_TB5550_00

Question 12

Wright & Boyle Inc.had the following income statement for the month of May:
-
 What was the sales revenue percent?

Accepted Answer

SUPPORTING CALCULATIONS:
Sales revenue percent = ($470,800 / $470,800) = 100% (sales revenue is always 100% of itself)

Question 13

An income statement of a manufacturer

Accepted Answer

An income statement covers a certain period of time, typically a month, quarter, or year. A) is incorrect because the ending balance of work in process would appear on a balance sheet, not an income statement. B) is incorrect because an income statement includes all expenses, not just manufacturing costs. C) is incorrect for the same reason as A) - the ending balance of materials inventory would appear on a balance sheet.

Question 14

Wright & Boyle Inc.had the following income statement for the month of May:
- What was the cost of goods sold percent? (Note: Round answer to two decimal places.)

Accepted Answer

SUPPORTING CALCULATIONS: Cost of goods sold percent = Cost of goods sold / Sales revenue = ($217,766.40 / $470,800) = 46.25%

Question 15

A manufacturer normally has

Accepted Answer

A manufacturer usually has three inventory accounts: raw materials, work in process, and finished goods.

Question 16

Operating income equals

Accepted Answer

Operating income is the income generated from a company's regular business operations. It is calculated by subtracting the cost of goods sold and selling and administrative expenses from the sales revenue. Therefore, the correct formula for operating income is A) sales revenue – cost of goods sold – selling and administrative expense.

Question 17

During the month of June, Carney & Whitley Inc.had cost of goods manufactured of $123,200, direct materials cost of $57,200, direct labor cost of $40,700, and manufacturing overhead cost of $28,600.The work in process balance on June 30 was equal to $11,000.What was the work in process balance on June 1?

Accepted Answer

SUPPORTING CALCULATIONS:
 11ea8a4c_491b_fcf2_a0e6_d125628fe2ee_TB5550_00

Question 18

Hendrix & Franks Company had the following beginning and ending inventory balances for the current year ended December 31:  
 In addition, direct labor costs of $33,000 were incurred, manufacturing overhead equaled $46,200, materials purchased were $29,700, and selling and administrative costs were $24,200.Hendrix & Franks Co.sold 27,500 units of product during the year at a sales price of $5.25 per unit.
- What were the total manufacturing costs for the year?

Accepted Answer

SUPPORTING CALCULATIONS:
 
 11ea8a4c_491b_60ac_a0e6_f502959e93d8_TB5550_00 11ea8a4c_491b_87bd_a0e6_d1d6e846c7f6_TB5550_00

Question 19

Emarson & Slater Inc.had materials inventory of $13,200 on July 1.The materials inventory on July 31 was $16,500 and the cost of direct materials used in production was $22,000.What was the cost of materials purchased during the month?

Accepted Answer

SUPPORTING CALCULATIONS:
 11ea8a4c_491c_2403_a0e6_d9e77526b467_TB5550_00

Question 20

On a manufacturer's income statement expenses are separated into the following three categories:

Accepted Answer

The three categories of expenses on a manufacturer's income statement are typically production expenses (related to the production of goods), selling expenses (related to the promotion and sale of goods), and administrative expenses (related to the general management and operation of the company). These categories are commonly referred to as production, selling, and administrative expenses. Option A is incorrect because indirect expenses are typically included in either selling or administrative expenses. Option B is incorrect because materials, work in process, and finished goods are not categories of expenses, but rather categories of inventory. Option D is incorrect because variable, fixed, and direct expenses are types of expenses, but not necessarily the categories of expenses found on a manufacturer's income statement.

Quiz 2: Basic Managerial Accounting Concepts

Rocha & Noel Inc.had cost of goods sold of $123,200 for the current year ended December 31.The finished goods inventory on January 1 was $30,800, and the finished goods inventory on December 31 was $18,700.What was the amount of cost of goods manufactured for the year?

Wright & Boyle Inc.had the following income statement for the month of May: - What was the selling expense percent? (Note: Round answer to two decimal places.)

Wright & Boyle Inc.had the following income statement for the month of May: - What was the administrative expense percent? (Note: Round answer to two decimal places.)