ScienceEconomicsChapter 16 example #32226
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Chapter 16 example #32226

Aria Brown avatar Aria Brown
14 June 2023
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question
what is true about managerial accounting?
answer
it may rely on estimates and forecasts
question
what is the principle reason for preparing managerial accounting reports
answer
usefulness to management
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conversion equation
answer
direct labor + factory overhead
question
Compute conversion costs given the following data: Direct Materials, $301,700; Direct Labor, $86,000; Factory Overhead, $252,300; and Selling Expenses, $45,290.
answer
$338,300
question
what is false in regards to direct materials for an automobile manufacturer?
answer
small plastic clips to hold on door panels, that become part of the auto, must be accounting for as direct materials.
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materials must have which two qualities in order to be classified as direct materials?
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they must be an integral part of the finished product and be significant portion of the total product cost.
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what term is used to refer to the cost of changing direct materials in a finished manufactured product?
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conversion cost
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which one of the following will not be found on the balance sheet of a manufacturing company?
answer
cost of goods sold
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equation for costs of goods sold?
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Beginning Work In Progress +Materials +Labor +Overhead -Ending Work In Progress
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A company sells goods for $420,000 that cost $140,000 to manufacture. Which statement(s) are true?
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the company will decrease finished goods by $140,000
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raw materials used
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beginning raw materials + materials purchased - ending raw materials
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direct costs are
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identified with and can be traced to a cost object.
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Indirect costs
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cannot be identified with or traced to a cost object.
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wood used to make guitars is a
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direct cost
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production supervisors salary is an
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indirect cost
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manufacturing costs consists of
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direct materials, direct labor and factory over head
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another name for manufacturing costs
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production costs
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direct materials
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dm
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to be classified as a dm, dl what must the cost be
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an integral part of the finished product, and a significant portion of the total cost of the product
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The cost of employee wages that is an integral part of the finished product is classified as
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direct labor
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costs other than dm and dl that are incurred in the manufacturing process are combined and classified as
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factory overhead
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examples of factory overhead costs
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heating, lighting, repairs and maintaining factory equipment, property taxes, insurance, depreciation of factory plant and equipment
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Prime costs
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direct materials + direct labor
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what is a conversion cost
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the costs of converting the materials into a finished product
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product costs
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direct materials + direct labor + overhead
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period costs are classified as
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selling or administrative expenses
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product costs have a balance sheet and income statement
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true
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period costs only have a n income statement
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true
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direct costs =
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prime costs
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indirect costs =
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over head + period costs
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raw materials inventory
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materials that have not yet entered the manufacturing process
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work in process inventory
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consists of direct materials costs, direct labor costs, and factory overhead costs for products that have been entered in the manufacturing process but not yet complete.
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finished goods
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inventory that is complete but not sold yet
question
At the beginning of 2015, the Primo Company's work in process inventory account had a balance of $30,000. During 2015, $68,000 of direct materials were used in production, and $66,000 of direct labor costs were incurred. Factory overhead in 2015 amounted to $90,000. Cost of goods manufactured is $220,000 in 2015. The balance in work in process inventory on December 31, 2015, is:
answer
34,000
question
which of the following are the two main types of cost accounting systems for manufacturing operations
answer
job order cost and process cost systems