Question 1

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

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Question 2

Information for Eastman Industries is presented below. Compute the cost of goods manufactured.
 $$\begin{array} { l | l } 
\text { Beginning work in process inventory } & 21,200 \
\hline \text { Ending work in process inventory } & 20,000 \
\hline \text { Raw materials used in production } & \$ 46,800 \
\hline \text { Direct labor } & 81,000 \
\hline \text { Total factory overhead } & 106,000
\end{array}$$

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Question 3

________ is the process of monitoring planning decisions and evaluating an organization's activities and employees.

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Question 4

The following items for Neptune Company are used to compute the cost of goods manufactured and the cost of goods sold. Indicate how each item should be used in the calculations by filling in the blanks with "+" if the item is to be added, "-" if the item is to be subtracted, or "0" if the item is not used in the calculation. The first item is completed as an example.
 $\begin{array} { l | l | l } 
\hline & \text { Cost of Goods } & \text { Cost of Goods } \
\hline \text { Beginning finished goods inventory } & \text { Manufactured } & \text { Sold } \
\hline \text { Ending finished goods inventory } & 0& +\
\hline \text { Direct labor } & & \
\hline \text { Indirect labor } & & \
\hline \text { Beginning work in process inventory } & & \
\hline \text { Ending work in process inventory } & & \
\hline \text { General and administrative expenses } & & \
\hline \text { Indirect materials } & & \
\hline \text { Beginning raw materials inventory } & & \
\hline \text { Ending raw materials inventory } & & \
\hline \text { Raw material purchases } & & \
\hline \text { Depreciation of factory building } & & \
\hline \text { Cost of goods manufactured } & & \
\hline
\end{array}$

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The answer of The following items for Neptune Company are...

Question 5

Compute the ending work in process inventory for a manufacturer with the following information.
 $$\begin{array} { l | l } 
\text { Raw materials purchased } & 131,700 \
\hline \text { Raw materials used in production } & 65,400 \
\hline \text { Direct labor used } & 44,000 \
\hline \text { Total factory overhead used } & 101,600 \
\hline \text { Work in process inventory, beginning of year } & 32,500 \
\hline \text { Cost of goods manufactured } & 212,900
\end{array}$$

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The answer of Compute the ending work in process inventory...

Question 6

A manufacturing company's beginning finished goods inventory was $29,000; cost of goods manufactured was $316,000; and the ending finished goods inventory was $31,000. What is the cost of goods sold for that year?

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Question 7

Duncan Crafts manufactures specialty key chains for tourist attractions. On January 1, the firm had 300 souvenir attraction disks used in the production of the chains that cost $3 each; and 600 completed key chains that cost $6 each. During the year Duncan Crafts purchased 1,500 souvenir disks costing $3 each and produced 1,100 key chains. Compute the total cost of raw materials inventory at December 31.

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Question 8

The following costs are incurred by Gonzalez Manufacturing Co. Classify each cost item as either a period cost or a product cost. If the cost is a product cost, identify it as a prime and/or conversion cost.
 $\begin{array}{|l|l|l|l}
\hline&\text { Period Cost } & \text { Product Cost } \
\hline& & \text { Prime Cost } & \begin{array}{l}
\text { Conversion } \
\text { Cost }
\end{array} \
\hline \text { Factory property taxes......... } & & & \
\hline \text { Payroll taxes for assembly labor......... } & & & \
\hline \text { Depreciation of factory equipment......... } & & & \
\hline \text { Insurance on delivery vehicles........ } & & & \
\hline \text { Indirect materials used........ } & & & \
\hline \text { Wages of production workers........ } & & & \
\hline \text { Production supervisor's salary........ } & & & \
\hline \text { Advertising......... } & & & \
\hline \text { Direct materials used............... } & & & \
\hline \text { Sales salaries } & & & \
\hline
\end{array}$

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The answer of The following costs are incurred by Gonzalez...

Question 9

A manufacturing company's finished goods inventory on January 1 was $68,000; cost of goods manufactured was $147,000; and the December 31 finished goods inventory was $77,000. What is the cost of goods sold for that year?

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Question 10

Walter Products and Sandburg Industries report the following information at December 31:
WALTER SANDBURG
 $$\begin{array} { l | l | l } 
\hline \text { Accounts Receivable } & \$ 41,000 & \$ 68,000 \
\hline \text { Cash } & 6,000 & 7,000 \
\hline \text { Finished Goods Inventory } & & 25,000 \
\hline \text { Work in Process Inventory } & & 40,000 \
\hline \text { Merchandise Inventory } & 48,000 & \
\hline \text { Prepaid Expenses } & 1,000 & 2,000 \
\hline \text { Raw Materials Inventory } & & 21,000
\end{array}$$ Required:
(a) Which company is a manufacturer? Explain.
(b) Prepare the Current Asset Section of the Balance Sheet for the manufacturer.

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The answer of Walter Products and Sandburg Industries report the...

Question 11

Information for Maxim Manufacturing is presented below. Compute both the cost of goods manufactured and the cost of goods sold for Maxim Manufacturing.
 $$\begin{array} { l | l } 
\text { Beginning raw materials inventory } & \$ 36,800 \
\hline \text { Beginning work in process inventory } & 21,200 \
\hline \text { Direct labor } & 81,000 \
\hline \text { Beginning finished goods inventory } & 64,000 \
\hline \text { Total factory overhead } & 126,000 \
\hline \text { Raw materials purchased } & 21,500 \
\hline \text { Ending raw materials inventory } & 40,000 \
\hline \text { Ending work in process inventory } & 20,000 \
\hline \text { Ending finished goods inventory } & 46,000
\end{array}$$

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The answer of Information for Maxim Manufacturing is presented below....

Question 12

Use the following information to prepare the schedule of cost of goods manufactured for Graffstone Company for the month ended June 30.
 $$\begin{array} { l | l } 
\text { Work in Process inventory. May 31 } & \$ 12,600 \
\hline \text { Work in Procest inventory. June 30 } & 16,500 \
\hline \text { Direct materials used during June } & 21,000 \
\hline \text { Direct labor used during June } & 31,000 \
\hline \text { Factory overhead: } & \
\hline \text { Indirect material } & 6,400 \
\hline \text { Indirect labor } & 9,200 \
\hline \text { Factory rent } & 12,000 \
\hline \text { Factory depreciation } & 15,000 \
\hline \text { Factory utilities } & 18,400
\end{array}$$

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The answer of Use the following information to prepare the...

Question 13

Information for the Deuce Manufacturing Company follows. Compute the cost of goods manufactured for this company.
 $$\begin{array} { l | l } 
\text { Begining raw materials inventory } & \$ 53,200 \
\hline \text { Beginging work in process, inventory } & 78,400 \
\hline \text { Ending raw materials inventory } & 58,100 \
\hline \text { Ending work in process, inventory } & 98,000 \
\hline \text { Direct labor } & 149,800 \
\hline \text { Total factory overhead } & 105,000 \
\hline \text { Raw material purchases } & 210,000
\end{array}$$

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The answer of Information for the Deuce Manufacturing Company follows....

Question 14

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

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Question 15

The purpose of managerial accounting information is to help ________ users make decisions while the purpose of financial accounting is to help ________ users make decisions.

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Question 16

Information for Underwood Industries is presented below. Compute the cost of goods manufactured.
 $$\begin{array} { l | l | l } 
& \text { Beginning } & \text { Ending } \
\hline \text { Raw materials inventory } & \$ 26,800 & 30,100 \
\hline \text { Work in procests inventory } & 41,200 & 39,000 \
\hline \text { Firished goods inventory } & 54,000 & 53,500 \
\hline & & \
\hline \text { Raw materials purchased } & 93,500 & \
\hline \text { Direct labor } & 61,000 & \
\hline \text { Total factory overhead } & 117,300 &
\end{array}$$

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The answer of Information for Underwood Industries is presented below....

Question 17

Information for Stanton, Inc., as of December 31 follows. Prepare a schedule of cost of goods manufactured for the year ended December 31.
 $\begin{array} { l | l } 
\text { Administrative salaries } & \$ 35,000 \
\hline \text { Depreciation of factory equipment } & 25,000 \
\hline \text { Depreciation of delivery vehicles } & 6,000 \
\hline \text { Direct labor } & 68,000 \
\hline \text { Factory supplies used } & 9,000 \
\hline \text { Finished goods inventory, January 1 } & 57,000 \
\hline \text { Finished goods inventory, December 31 } & ? \
\hline \text { Factory insurance } & 15,500 \
\hline \text { Interest expense } & 12,000 \
\hline \text { Factory utilities } & 14,000 \
\hline \text { Factory maintenance } & 7,500 \
\hline \text { Raw materials inventory, January 1 } & 5,000 \
\hline \text { Raw materials inventory, December 31 } & 4,000 \
\hline
\end{array}$
$$\begin{array} { l | l } 
\hline \text { Raw material purchases } & 125,000 \
\hline \text { Rent on factory building } & 25,000 \
\hline \text { Repairs of factory equipment } & 11,500 \
\hline \text { Sales comrnissions } & 37,500 \
\hline \text { Work in Process inventory. January 1 } & 3,500 \
\hline \text { Work in Process inventory. December 31 } & 2,700
\end{array}$$

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Question 18

Brotherton Company is a manufacturer of Blu-ray discs. Place each of the following costs in the appropriate column.

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Question 19

Martinez Company makes leather cowboy hats. Each hat requires ½ yard of leather to produce. On December 31, 2014, the company had (a) 75 hats in Finished Goods Inventory and (b) 60 yards of leather at a cost of $12 per yard in Raw Materials Inventory. During 2015, the company purchased 850 more yards of leather at $12 per yard and manufactured 1,600 hats. Determine the unit and dollar amounts of Raw Materials Inventory in leather at December 31, 2015.

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The answer of Martinez Company makes leather cowboy hats. Each...

Question 20

Calculate Cost of Goods Sold for the following two companies:
 $$\begin{array} { l | l | l } 
& \text { LEWIS, INC. } & \text { MERCER CO } \
\hline \text { Beginning Inventory. } & & \
\hline \text { Merchandise } & \$ 250,000 & \
\hline \text { Finithed Goods } & &  \$ 550,000\
\hline \text { Cost of Goods Purchased } & 460,000 & \
\hline \text { Cost of Goods Manufactured } & & 688,000\
\hline \text { Ending Inventory. } & &  \
\hline \text { Merchandise } & 128,000 & \ 
\hline \text { Finithed Goods } & &350,000\
\hline
\end{array}$$

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The answer of Calculate Cost of Goods Sold for the...

Quiz 18: Managerial Accounting Concepts and Principles