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14 - 1 Managerial Accounting 81.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. 82.Which one of the following is an example of a period cost? a.A change in benefits for the union workers who work in the New York plant.
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15 - 1 71.A time ticket does not indicate the a.employee's name. b.account to be charged. c.number of personal exemptions claimed by the employee. d.job number. 72.Which one of the following is a source document that impacts the job cost sheet? a.Raw materials receiving slips. b.Materials purchase orders. c.Labor time tickets. d.Finished goods shipping documents. 73.Time tickets should be approved by a.the.
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15 - 1 111.Gulick Company developed the following data for the current year: Beginning work in process inventory$160,000 Direct materials used96,000 Actual overhead192,000 Overhead applied144,000 Cost of goods manufactured176,000 Total manufacturing costs480,000 Gulick Company's direct labor cost for the year is a.$48,000. b.$240,000. c.$144,000. d.$192,000. 112.Gulick Company developed the following data for the current year: Beginning work in process inventory$160,000 Direct materials used96,000 Actual overhead192,000 Overhead applied144,000 Cost.
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15 - 1 51.Cost of raw materials is debited to Raw Materials Inventory when the a.materials are ordered. b.materials are received. c.materials are put into production. d.bill for the materials is paid. 52.Which of the following is not included in factory labor costs? a.Gross earnings. b.Net earnings. c.Fringe benefits. d.Employer payroll taxes. 53.All of the following would be entries in assigning.
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14 - 1 Managerial Accounting Ex. 167 Kwik Delivery Service reports the following costs and expenses in June 2013. Indirect materials$  8,400Driver's salaries$14,000 Depreciation on deliveryAdvertising5,100 equipment11,200Delivery equipment Dispatcher's salary5,000repairs300 Property taxes on officeOffice supplies650 building870Office utilities1,490 CEO's salary12,000Repairs on office Gas and oil for delivery trucks3,200equipment180 Instructions Determine the total amount of (a) delivery service (product) costs and (b) period costs. Ex. 168 For.
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14 - 1 Managerial Accounting MULTIPLE CHOICE QUESTIONS 38.Managerial accounting applies to each of the following types of businesses except a.service firms. b.merchandising firms. c.manufacturing firms. d.Managerial accounting applies to all types of firms. 39.Managerial accounting information is generally prepared for a.stockholders. b.creditors. c.managers. d.regulatory agencies. 40.Managerial accounting information a.pertains to the entity as a whole and is highly aggregated. b.pertains to subunits of the.
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15 - 1 91.The predetermined overhead rate is based on the relationship between a.estimated annual costs and actual activity. b.estimated annual costs and expected annual activity. c.actual monthly costs and actual annual activity. d.estimated monthly costs and actual monthly activity. 92.The predetermined overhead rate is a.determined on a moving average basis throughout the year. b.not calculated until actual.
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14 - 1 Managerial Accounting S-A E  205 Kevin Scott is confused about the differences between a product cost and a period cost. Explain the differences to Kevin. S-A E  206 Assume you have just taken a position as controller for a new company that manufactures and sells wrought iron wall hangings. Although the founder.
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14 - 1 Managerial Accounting Ex. 175 The following information is available for Elliot Company. January 1, 20132013December 31, 2013 Raw materials inventory$ 26,000$30,000 Work in process inventory13,50022,200 Finished goods inventory30,00021,000 Materials purchased$170,000 Direct labor220,000 Manufacturing overhead180,000 Sales800,000 Instructions (a)Compute cost of goods manufactured. (b)Prepare an income statement through gross profit. Ex. 176 Manufacturing cost data for Morton Company are presented below. Case ACase BCase C Direct materials.
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14 - 1 Managerial Accounting 51.Which of the following statements about internal reports is not true? a.The content of internal reports may extend beyond the double-entry accounting system. b.Internal reports may show all amounts at market values. c.Internal reports may discuss prospective events. d.Most internal reports are summarized rather than detailed. 52.In an analogous sense, external user.
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14 - 1 Managerial Accounting 121.Assuming the cost of direct materials used is $1,500,000, compute the total manufacturing costs using the information below. Raw materials inventory, January 1$     30,000 Raw materials inventory, December 3160,000 Work in process, January 127,000 Work in process, December 3118,000 Finished goods, January 160,000 Finished goods, December 3148,000 Raw materials purchases1,500,000 Direct labor690,000 Factory utilities225,000 Indirect labor75,000 Factory depreciation500,000 Operating.
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14 - 1 Managerial Accounting 91.As inventoriable costs expire, they become a.selling expenses. b.gross profit. c.cost of goods sold. d.sales revenue. 92.A manufacturing company calculates cost of goods sold as follows: a.Beginning FG inventory + cost of goods purchased – ending FG inventory. b.Ending FG inventory – cost of goods manufactured + beginning FG inventory. c.Beginning FG inventory – cost.
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14 - 1 Managerial Accounting COMPLETION STATEMENTS               186.Financial accounting information is prepared mainly for ______________ users, while managerial accounting information is prepared primarily for ______________ users.               187.The types of reports prepared in managerial accounting are often ______________-purpose reports prepared for a specific decision.               188.Managerial accounting reports generally pertain to ______________ of a.
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14 - 1 Managerial Accounting 11.Manufacturing costs that cannot be classified as direct materials or direct labor are classified as manufacturing overhead. 12.Raw materials are equal to direct materials minus indirect materials. 13.Raw materials that can be conveniently and directly associated with a finished product are called materials overhead. 14.The total cost of a finished.
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14 - 1 Managerial Accounting Ex. 180 Manufacturing costs for Carson Company for selected months are as follows:    April     July October Beginning work in process$  80,000(f)$ 98,000 Direct materials used280,000$190,000155,000 Direct labor195,000170,000(j) Manufacturing overhead(a)150,00090,000 Total manufacturing costs890,000510,000450,000 Total cost of work in process(b)640,000(k) Ending work in process75,000(g)(l) Cost of goods manufactured(c)525,000385,000 Beginning finished goods(d)38,000(m) Cost of goods available for sale960,000(h)480,000 Ending finished goods(e)75,000(n) Cost of goods.
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14 - 1 Managerial Accounting Ex. 182 Data for the cost of direct materials for the month ended March 31, 2013, are as follows: Materials inventory, March 1, 2011$76,000 Materials inventory, March 31, 201170,000 During March, the company purchased $240,000 of raw materials on account from Reed Company and $92,000 of raw materials for cash from.
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14 - 1 Managerial Accounting 71.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. 72.Which one of the following is not considered as material costs? a.Partially completed motor engines for a motorcycle plant b.Bolts used in manufacturing the compressor of an engine c.Rivets for the wings of a.
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14 - 1 Managerial Accounting 111.Walker Company reported the following year-end information: Beginning work in process inventory $  46,000 Beginning raw materials inventory24,000 Ending work in process inventory50,000 Ending raw materials inventory20,000 Raw materials purchased830,000 Direct labor240,000 Manufacturing overhead100,000 How much is Walker’s cost of goods manufactured for the year? a.$834,000 b.$1,174,000 c.$1,170,000 d.$1,178,000 112.Ogleby Inc.'s accounting records reflect the following inventories: Dec. 31, 2012Dec. 31,.
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15 - 1 11.Manufacturing costs are generally incurred in one period and recorded in a subsequent period. 12.The Purchases account is credited for all raw materials purchase returns and allowances. 13.When raw materials are received, there is no effort at this point to associate the cost of materials with specific jobs. 14.When raw.
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14 - 1 Managerial Accounting Ex. 165 For each item, identify all applicable cost labels. Use the following code in your answer: 1 — Product Cost 2 — Period Cost a.Advertising________ b.Direct materials used________ c.Sales salaries________ d.Indirect factory labor________ e.Repairs to office equipment________ f.Factory manager's salary________ g.Direct labor________ h.Indirect materials________ Ex. 166 Kennedy Company reports the following costs and expenses in May. Factory utilities$  13,500Direct labor$79,100 Depreciation.
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14 - 1 Managerial Accounting 131.Costas Company has beginning and ending raw materials inventories of $64,000 and $80,000, respectively. If direct materials used were $290,000, what was the cost of raw materials purchased?  a.$290,000. b.$310,000. c.$274,000. d.$306,000. 132.Wood Company has beginning work in process inventory of $128,000 and total manufacturing costs of $477,000. If cost of.
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14 - 1 Managerial Accounting BE 158 Presented below are incomplete 2013 manufacturing cost data for Swartnez Corporation. Direct Materials Used Direct Labor Manufacturing Overhead Total Manufacturing Costs (a) $  17,000 $42,000 ? $  88,000 (b) $148,000 ? $112,000 $480,000 Instructions Determine the missing amounts. BE 159 Presented below are incomplete 2013 manufacturing cost data for Supreme Corporation.  Direct Materials Used Direct Labor Factory Overhead Total Manufacturing Costs (a) $48,000 $72,000 ? $184,000 (b) $95,000 ? $80,000 $305,000 (c) ? $80,000 $120,000 $290,000 Instructions Determine the missing amounts. BE 160 Raynor Company has.
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14 - 1 Managerial Accounting 141.Many companies now focus on reducing defects in finished products with the goal of zero defects. This is called a.Activity-based costing. b.Balanced scorecard. c.Value chain. d.Total quality management. 142.Financial and managerial accounting are similar in that both a.have the same primary users. b.produce general-purpose reports. c.have reports that are prepared quarterly and annually. d.deal with the.
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14 - 1 Managerial Accounting Exercises Ex. 162 Financial accounting information and managerial accounting information have a number of distinguishing characteristics. For each of the characteristics listed below, indicate which characteristics are more closely related to financial accounting by placing the letter "F" in the space to the left of the item and indicate.
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14 - 1 Managerial Accounting S-A E  207(Ethics) Million Dollar Mills is a textile manufacturing firm located in the southern United States. The company carefully prepares all financial statements in accordance with GAAP, and gives a copy of all financial statements to each department. In addition, the company keeps records on quality control,.
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14 - 1 Managerial Accounting Ex. 171 Among the items that Howard Print Shop accounts for are the following:               1.Direct labor               2.Office supplies used               3.Depreciation on printing machines                            4.Finished goods inventory, 12/31                            5.Raw materials inventory, 1/1               6.Cost of goods manufactured               7. Work in process, 1/1               8.Office supplies inventory, 12/31                            9.Indirect.
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13-1 Financial Analysis: The Big Picture SHORT-ANSWER ESSAY QUESTIONS S-A E 272 Explain sustainable income. What relationship does this concept have to the treatment of irregular items on the income statement? S-A E 273 What issues must be considered when determining whether or not a loss from earthquake destruction should be treated as an extraordinary item? S-A.
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15 - 1 81.A company expected its annual overhead costs to be $1,800,000 and direct labor costs to be $1,000,000. Actual overhead was $1,740,000, and actual labor costs totaled $1,100,000. How much is the company’s predetermined overhead rate to the nearest cent? a.$1.74 b.$1.57 c.$1.80 d.$1.64 82.Vektek, Inc. thinks machine hours is the best activity base.
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15 - 1 MULTIPLE CHOICE QUESTIONS 36.Which of the following is one of the components of cost accounting? a.It involves measuring product costs. b.It involves the determination of company profits. c.It requires GAAP to be applied. d.It requires cost minimizing principles. 37.A major purpose of cost accounting is to a.classify all costs as operating or nonoperating. b.measure, record, and.
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14 - 1 Managerial Accounting 31.Managerial accounting is primarily concerned with managers and external users. 32.Planning involves coordinating the diverse activities and human resources of a company to produce a smooth running operation. 33.When the physical association of raw materials with the finished product is too small to trace in terms of cost, they.
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14 - 1 Managerial Accounting SHORT-ANSWER ESSAY QUESTIONS S-A E  202 Financial and managerial accounting are both concerned with the economic events of an enterprise. Similarities between financial and managerial accounting do exist, but they do have a different focus. Briefly distinguish between financial and managerial accounting as they relate to (1) the primary.
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14 - 1 Managerial Accounting 101.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. c.subtraction from raw materials available for use. d.subtraction from raw materials purchases. 102.Dolan  Company's accounting records reflect the following inventories: Dec. 31, 2013Dec. 31, 2012 Raw.
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14 - 1 Managerial Accounting Ex. 179 The following costs and inventory data were taken from the accounts of Simon Company for 2012: January 1, 2013December 31, 2013 Inventories:Raw materials              $  8,000              $  7,000                            Work in process              15,000              13,000                            Finished goods              16,000              12,000 Costs incurred:Raw materials purchases              $93,000                            Direct labor              42,000                            Factory.
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15 - 1 CHAPTER 15 JOB ORDER COSTING TRUE-FALSE STATEMENTS 1.Cost accounting is primarily concerned with accumulating information about product costs. 2.A job order cost system is most appropriate when a large volume of uniform products are produced. 3.A process cost accounting system is appropriate for similar products that are continuously mass produced. 4.The perpetual inventory method.
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15 - 1 121.Barger Company had the following information at December 31: Finished goods inventory, January 1$  90,000 Finished goods inventory, December 31126,000 If the cost of goods manufactured during the year amounted to $1,995,000 and annual sales were $2,994,000, how much is the amount of gross profit for the year? a.$999,000 b.$909,000 c.$1,959,000 d.$1,035,000 122.Emley Company incurred direct.
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15 - 1 101.For Wilton Company, the predetermined overhead rate is 70% of direct labor cost. During the month, $360,000 of factory labor costs are incurred of which $100,000 is indirect labor. Actual overhead incurred was $180,000. The amount of overhead debited to Work in Process Inventory should be: a.$182,000 b.$180,000 c.$252,000 d.$260,000 102.At the beginning.
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14 - 1 Managerial Accounting Ex. 173 Peters Manufacturing Company has the following data at June 30, 2013: Raw materials inventory, June 1$  13,800 Work in process inventory, June 118,100 Finished goods inventory, June 143,500 Total manufacturing costs430,000 Sales590,000 Work in process inventory, June 3030,400 Finished goods inventory, June 3065,200 Raw materials inventory, June 3018,000 Instructions (a)Prepare an income statement through gross profit.
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14 - 1 Managerial Accounting BRIEF Exercises BE 152 Presented below are Truck Company’s monthly manufacturing cost data related to its personal computer products. (a)Taxes on factory building$820,000 (b)Raw materials 66,000 (c)Depreciation on manufacturing equip.210,000 (d)Wages for assembly line workers340,000 Instructions Enter each cost item in the following table, placing an “X” under the appropriate headings. Product Costs Direct Materials Direct Labor Manufacturing Overhead (a) (b) (c) (d) BE.
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13-1 Financial Analysis: The Big Picture S-A E 276 What does each type of ratio measure? (a)Liquidity ratios. (b)Solvency ratios. (c)Profitability ratios. S-A E 277 Identify and explain factors that affect quality of earnings. . S-A E 278(Communication) Zip Delivery specializes in the overnight transportation of medical equipment and laboratory specimens. The company has selected the following information from its most.
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14 - 1 Managerial Accounting Ex. 177 From the account balances listed below, prepare a schedule of cost of goods manufactured for Sampson Manufacturing Company for the month ended December 31, 2013. Account Balances Finished Goods Inventory, December 31$42,000 Factory Supervisory Salaries12,000 Income Tax Expense18,000 Raw Materials Inventory, December 112,000 Work In Process Inventory, December 3115,000 Sales Salaries Expense14,000 Factory Depreciation.
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14 - 1 Managerial Accounting Ex. 169 Yates Manufacturing Company incurs the following manufacturing costs and expenses during the month of May.               1.Assembly line wages               2.Raw materials used directly in product               3.Depreciation on office equipment               4.Property taxes on factory building               5.Rent on factory building               6.Sales commissions               7.Depreciation on factory equipment               8.Factory utilities               9.Wages.
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13-1 Financial Analysis: The Big Picture SET B 271.Match the ratios with their formulas by entering the appropriate letter in the space provided. A.Current ratioF.Times interest earned B.Current cash debt coverageG.   Inventory turnover C.Profit margin H.Average collection period D.Asset turnover I.Average days in inventory E.Price-earnings ratioJ.Payout ratio ____  1. Cost of goods sold Average inventory ____  2. Net income Net sales ____  3. Cash dividends declared.
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14 - 1 Managerial Accounting 21.Ending finished goods inventory appears on both the balance sheet and the income statement of a manufacturing company. 22.The beginning work in process inventory appears on both the balance sheet and the cost of goods manufactured schedule of a manufacturing company. 23.In calculating gross profit for a manufacturing company,.
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15 - 1 21.There should be a separate job cost sheet for each job. 22.Actual manufacturing overhead costs are assigned to each job by tracing each overhead cost to a specific job. 23.The formula for the predetermined overhead rate is estimated annual overhead costs divided by an expected annual operating activity. 24.Actual manufacturing overhead.
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14 - 1 Managerial Accounting MATCHING 201.Match the items in the two columns below by entering the appropriate code letter in the space provided. A.Managerial accounting F.Work in process inventory B.Financial accounting G.Direct materials C.Planning H.Manufacturing overhead D.DirectingI. Period costs E.Controlling J.Value chain _____              1.The cost of products that are partially complete. _____              2.The function of keeping activities in accordance.
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14 - 1 Managerial Accounting 61.In determining whether planned goals are being met, a manager is performing the function of a.planning. b.follow-up. c.directing. d.controlling. 62.Which of the following is not a separate management function? a.Planning b.Directing c.Decision-making d.Controlling 63.Directing includes a.providing a framework for management to have criteria to terminate employees when needed. b.running a department under quality control standards universally accepted. c.coordinating a company's.
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13-1 Financial Analysis: The Big Picture MATCHING SET A 270.For each of the ratios listed below, indicate by the appropriate code letter, whether it is a liquidity ratio, a profitability ratio, or a solvency ratio. Code: L =Liquidity ratio P =Profitability ratio S=Solvency ratio ____              1.Price-earnings ratio ____              2.Return on assets ____              3.Accounts receivable turnover ratio ____              4.Earnings per share ____              5.Payout.
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13-1 Financial Analysis: The Big Picture IFRS QUESTIONS 1. Under IFRS, there is no classification for      a. changes in accounting estimates.      b. changes in accounting principles.      c. discontinued operations.      d. extraordinary items. 2. The accounting for each of the following is the same under IFRS and GAAP except for     a. extraordinary items.     b. discontinued.
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14 - 1 Managerial Accounting CHAPTER 14 MANAGERIAL ACCOUNTING TRUE-FALSE STATEMENTS 1.Reports prepared in financial accounting are general-purpose reports, whereas reports prepared in managerial accounting are usually special-purpose reports. 2.Managerial accounting information generally pertains to an entity as a whole and is highly aggregated. 3.Managerial accounting applies to all forms of business organizations. 4.Determining the unit cost of.
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