Name: Chapter 1 Homework Due 012510 Date: As inventoriable costs expire, they become A) selling expenses. B) gross profit. C) cost of goods sold. D) sales revenue. Which one of the following would nor be classified as manufacturing overhead? A) Indirect labor B) Direct materials C) Insurance on factory building D) Indirect materials Manufacturing costs that cannot be classified as either direct materials or direct labor are known as ‘A)_ period costs. B) nonmanufacturing costs. C) selling and administrative expenses D)_ manufacturing overhead, . The product cost that is most difficult to associate with a product is A) direct materials. B) direct labor. ©) manufacturing overhead. D) advertising. . Because of automation, which component of product cost is declining? A). Direct labor B) Direct materials ©) Manufacturing overhead D) Advertising Both direct materials and indirect materials are A) raw materials. B) manufacturing overhead. C)_ merchandise inventory. D) sold directly to customers by a manufacturing company. Page 110. i. 12. Chapter 1 Homework Due 012510 If the cost of goods manufactured is less than the cost of goods sold, which of the following is correct? A) Finished Goods Inventory has increased. B) Work in Process Inventory has increased. C) Finished Goods Inventory has decreased. D) Work in Process Inventory has decreased. Sales commissions are classified as A) overhead costs B) period costs. ©) product costs. D)_ indirect labor. Managerial accounting information is generally prepared for A) stockholders. B) creditors. CC) managers. D) regulatory agencies. Product costs consist of A) direct materials and direct labor only. B) direct materials, direct labor, and manufacturing overhead. C) selling and administrative expenses. D)_ period costs. Managerial accounting is applicable to A) service entities. B) manufacturing entities C) not-for-profit entities. D) allof these, ‘Which one of the following is a cost that would not likely be associated with computer- integrated manufacturing? A) Manufacturing overhead associated with allocation of equipment depreciation B) Direct labor costs of a welder on the production floor ©) Manufacturing overhead associated with allocation of the plant lease to the latest production run D) Direct materials cost with several fuse plates for a new automobile Page 2Chapter 1 Homework Due 012510 13, Manufacturing costs include A) direct materials and direct labor only. B) direct materials and manufacturing overhead only. ©) direct labor and manufacturing overhead only. D) direct materials, direct labor, and manufacturing overhead. 14, Direct materials and direct labor of a company total $6,000,000. If manufacturing overhead is $3,000,000, what is direct labor cost? A) 3,000,000 B) 6,000,000 ©) $0 D) Cannot be determined from the information provided 15, Raw materials inventory, January 1 $30,000 Raw materials inventory, December 31 60,000 Work in process, January 1 27,000 ‘Work in process, December 31 18,000 Finished goods, January 1 60,000 Finished goods, December 31 48,000 Raw materials purchases 1,500,000 Direct labor 690,000 Factory utilities 225,000 Indirect labor 75,000 Factory depreciation 600,000 Selling and administrative expenses 630,000 Cost of goods manufactured for the year is $3,060,000. The cost of goods sold is A) $3,069,000. B) $3,012,000. C) $3,048,000. D) $3,072,000. 16. A distinguishing feature of managerial accounting is A). extemal users. B) general-purpose reports. C) very detailed reports. 1D) quarterly and annual reports. Page 3Chapter 1 Homework Due 012510 17. Managerial accounting does not encompass A) calculating product cost. B) calculating earnings per share. ©) determining cost behavior. D) profit planning. 18. On the costs of goods manufactured schedule, the item raw materials inventory (ending) appears as a(n) ‘A) addition to raw materials purchases. B) addition to raw materials available for use. ©) subtraction from raw materials available for use. D) subtraction from raw materials purchases. 19. Raw materials inventory, January 1 $30,000 Raw materials inventory, December 31 60,000 Work in process, January 1 27,000 ‘Work in process, December 31 18,000 Finished goods, January 1 60,000 Finished goods, December 31 48,000 Raw materials purchases 1,500,000 Direct labor 690,000 Factory utilities 225,000 Indirect labor 75,000 Factory depreciation 600,000 Selling and administrative expenses 630,000 Total manufacturing costs is $3,000,000. Cost of goods manufactured equals A) $2,988,000. B) $2,991,000. C) $3,009,000. D) $3,012,000. 20. The wages of a timekeeper in the factory would be classified as, A) a period cost. B) direct labor. C)_ indirect labor. D) compliance costs. Page 4Chapter 1 Homework Due 012510 21. Which of the following is nor a separate management function? A) Planning B) Directing ©) Decision-making D) Controlling 22, Hardigan Manufacturing Company reported the following year-end information: beginning work in process inventory, $80,000; cost of goods manufactured, $980,000; beginning finished goods inventory, $50,000; ending work in process inventory, $70,000; and ending finished goods inventory, $40,000. How much is Hardigan's cost of goods sold for the year? A) $980,000 B) $990,000 C) $970,000 D)_ $1,000,000 23, The principal difference between a merchandising and a manufacturing income statement is the A) cost of goods sold section. B) extraordinary item section. C)_ operating expense section. D) revenue section. 24. When a worksheet is prepared for a manufacturing company, an offsetting entry must be made fo balance the cost of goods manufactured columns. Where does the offsetting entry appear? A) Inthe balance shect debit column B) Inthe income statement debit column C) Inthe balance sheet credit column D)_ Inthe income statement credit column Page 5‘Chapter 1 Homework Due 012510 25. Modine Manufacturing Inc.'s accounting records reflect the following inventories: Deo.31.2007 Dee. 31.2008 Raw materials inventory $120,000 $ 96,000 Work in process inventory 156,000 174,000 Finished goods inventory 150,000 138,000 During 2008, Modine purchased $1,140,000 of raw materials, incurred direct labor costs ‘of $150,000, and incurred manufacturing overhead totaling $192,000. How much is total manufacturing costs incurred during 2008 for Modine? A) $1,488,000 B) $1,506,000 C) $1,482,000 D) $1,500,000 26. Which of the following is not a management function? A) Constraining B) Planning ©) Controlling D) Directing 27. Hollem Combines, Inc. has $10,000 of ending finished goods inventory as of December 31, 2008. If beginning finished goods inventory was $5,000 and cost of goods sold was $20,000, how much would Holler report for cost of goods manufactured? A) $22,500 B) $5,00 ©) $25,000 D) $15,000 28. Which of the following is not a manufacturing cost category? A) Cost of goods sold B) Direct materials C) Direct labor D) Manufacturing overhead 29. The equivalent of finished goods inventory for a merchandising firm is referred to as A) purchases. B) cost of goods purchased. C) merchandise inventory. D)_ raw materials inventory. Page 630. 31 32. 33. 34, 35. ‘Chapter 1 Homework Due 012510 ‘What is one primary benefit of an enterprise resource planning (ERP) system? A)_Itreduces inventory levels. B) It permits companies to be more streamlined in production. C) _Itreplaces research and development in a company. D) It requires an increased emphasis on product quality. ‘The management function that requires managers to look ahead and establish objectives is A) controlling. B) directing. ©) planning, D) constraining What term describes all activities associated with providing a product or service? A) The manufacturing chain B) The product chain C) The supply chain D) The value chain For the work of factory employees to be considered as direct labor, the work must be conveniently and A) materially associated with raw materials conversion. B) periodically associated with raw materials conversion. C) physically associated with raw materials conversion. D) promptly associated with raw materials conversion. Produet costs are also called A) direct costs. B) overhead costs. C)_inventoriable costs. D) capitalizable costs. Samson Company reported total manufacturing costs of $130,000, manufacturing overhead totaling $26,000, and direct materials totaling $32,000. How much is direct labor cost? A) Cannot be determined from the information provided. B) $188,000 ©) $58,000 D) $72,000 Page 736. 37, 38. 39. Chapter I Homework Due 012510 Cost of goods manufactured in a manufacturing company is analogous to A) Ending inventory in a merchandising company. B) Beginning inventory in a merchandising company. ©) Cost of goods available for sale in a merchandising company. D) Cost of goods purchased in a merchandising company. Managerial accounting is also called A) management accounting. B) controlling. ©) analytical accounting. D)_ inside reporting. Cost of goods sold ‘A) only appears on merchandising companies' income statements. B) only appears on manufacturing companies’ income statements C) appears on both manufacturing and merchandising companies’ income statements D) iscalculated exactly the same for merchandising and manufacturing companies. The subtotal, "Cost of goods manufactured" appears on A) amerchandising company's income statement. B) manufacturing company's income statement. C)_ both a manufacturing and a merchandising company's income statement, D)_ neither a merchandising nor a manufacturing company's income statement. Page &Chapter 1 Homework Due 012510 40. Raw materials inventory, January 1 $ 20,000 Raw materials inventory, December 31 40,000 Work in process, January 1 18,000 Work in process, December 31 12,000 Finished goods, January 1 40,000 Finished goods, December 31 32,000 Raw materials purchases 1,000,000 Direct labor 460,000 Factory utilities 150,000 Indirect labor 50,000 Factory depreciation 400,000 Selling and administrative expenses 420,000 IF total manufacturing costs for the year is $2,000,000, cost of goods manufactured equals A) $1,992,000, B) $1,994,000. C) $2,006,000. D) $2,008,000, 41. Hopkins Manufacturing Inc.'s accounting records reflect the following inventories: Dec. 31,2007 Dec, 31. 2008 ‘Raw materials inventory $ 80,000 $ 64,000 Work in process inventory 104,000 116,000 Finished goods inventory 100,000 92,000 During 2008, Hopkins purchased $760,000 of raw materials, incurred direct labor costs of $100,000, and incurred manufacturing overhead totaling $128,000. Assume Hopkins Manufacturing's cost of goods manufactured for 2008 amounted to $960,000. How much would it report as cost of goods sold for the year? A) $968,000 B) $1,000,000 ©) $1,060,000 D) $952,000 42. Financial statements for extemal users can be described as, A) user-specific. B) general-purpose. ©) special-purpose. D) managerial reports. Page 9Chapter 1 Homework Due 012510 43, What is “balanced” in the balanced scorecard approach? A) The number of products produced B) The emphasis on financial and non-financial performance measurements C) The amount of costs allocated to products D) The number of defeets found on each product 44, Raw materials inventory, January 1 $ 20,000 Raw materials inventory, December 31 40,000 Work in process, January 1 18,000 Work in process, December 31 12,000 Finished goods, January 1 40,000 Finished goods, December 31 32,000 Raw materials purchases 1,000,000 Direct labor 460,000 Factory utilities 150,000 Indirect labor 50,000 Factory depreciation 400,000 Selling and administrative expenses 420,000 If direct material costs for the year is $1,000,000. Total manufacturing costs equal A) $2,060,000. B) $2,054,000. C) $1,860,000. D) $2,480,000. 45. Which one of the following is not a direct material? A) A tire used for a lawn mower B) Plastic used in the covered case for a home PC C) Steel used in the manufacturing of steel-radial tires D) Lubricant for a ball-bearing joint for a large crane Page 10(Chapter 1 Homework Due 012510 46. Modine Manufacturing Inc.'s accounting records reflect the following inventories: Dec. 31,2007 Dec. 31, 2008 Raw materials inventory $120,000 $ 96,000 Work in process inventory 156,000 174,000 Finished goods inventory 150,000 138,000 During 2008, Modine purchased $1,140,000 of raw materials, incurred direct labor costs of $150,000, and incurred manufacturing overhead totaling $192,000. How much would Modine Manufacturing report as cost of goods manufactured for 20087 A) $1,464,000 B) $1,524,000 ©) $1,518,000 D) $1,488,000 47. In.an analogous sense, external user is to internal user as generally accepted accounting principles are to A) timely. B) special-purpose, C) relevance to decision. D) SEC. 48. Sauder Manufacturing Company reported the following year-end information: Beginning work in process inventory $ 35,000 Beginning raw materials inventory 18,000 Ending work in process inventory 38,000 Ending raw materials inventory 15,000 Raw materials purchased 510,000 Direct labor 180,000 Manufacturing overhead 75,000 How much is Sauder Manufacturing’s total cost of work in process for the year? A) $513,000 B) $768,000 ©) $765,000 D) $803,000 Page I49. 50, Chapter 1 Homework Due 012510 Which of the following is not classified as direct labor? A) Bottlers of beer in a brewery B) Copy machine operators at a copy shop C) Wages of supervisors D) Bakers in a bakery Which one of the following accounts would not appear in the cost of goods ‘manufactured columns of a worksheet? A) Ending Work in Process Inventory B) Ending Finished Goods Inventory ©) Raw Materials Inventory D) Direct Labor Page 12