Filters
Question type
Study Flashcards

Select the term from the list provided that best matches each of the following descriptions.

Premises
Costs that are incurred after the manufacturing process is complete
The identification of the best practices used by world-class competitors
The linked sequence of activities that create value for the customer
Costs that cannot be easily traced to specific products
All costs related to obtaining or manufacturing a product intended for sale to customers
Work that contributes to a product’s ability to satisfy customer needs
The process of dividing a total cost into parts and assigning the parts to relevant cost objects
The field of accounting that is designed to meet the information needs of external users
General, selling, and administrative costs that are expensed in the period in which the economic sacrifice is made
Costs that can easily and conveniently be traced to products
Responses
Benchmarking
Cost allocation
Direct costs
Downstream costs
Financial accounting
Indirect costs
Period costs
Product costs
Value-added activity
Value chain

Correct Answer

Costs that are incurred after the manufacturing process is complete
The identification of the best practices used by world-class competitors
The linked sequence of activities that create value for the customer
Costs that cannot be easily traced to specific products
All costs related to obtaining or manufacturing a product intended for sale to customers
Work that contributes to a product’s ability to satisfy customer needs
The process of dividing a total cost into parts and assigning the parts to relevant cost objects
The field of accounting that is designed to meet the information needs of external users
General, selling, and administrative costs that are expensed in the period in which the economic sacrifice is made
Costs that can easily and conveniently be traced to products

The Carson Company was started at the beginning of the current year when it acquired $20,000 by issuing common stock to its owners.During the year,the company incurred the following cash costs:  Direct material costs $10,000 Direct labor costs 8,000 Overhead costs 4,000 Selling and administrative costs 2,000\begin{array}{lr}\text { Direct material costs } & \$ 10,000 \\\text { Direct labor costs } & 8,000 \\\text { Overhead costs } & 4,000 \\\text { Selling and administrative costs } & 2,000\end{array} The company produced 5,000 units of product and sold 4,500 units.The average selling price was $7.00 per unit.The accountant who prepared the firm's financial statements misclassified the selling and administrative costs as product costs. Required: Demonstrate the impact of the error on the company's financial statements by completing the following schedule. The Carson Company was started at the beginning of the current year when it acquired $20,000 by issuing common stock to its owners.During the year,the company incurred the following cash costs: \begin{array}{lr} \text { Direct material costs } & \$ 10,000 \\ \text { Direct labor costs } & 8,000 \\ \text { Overhead costs } & 4,000 \\ \text { Selling and administrative costs } & 2,000 \end{array} The company produced 5,000 units of product and sold 4,500 units.The average selling price was $7.00 per unit.The accountant who prepared the firm's financial statements misclassified the selling and administrative costs as product costs. Required: Demonstrate the impact of the error on the company's financial statements by completing the following schedule.

Correct Answer

verifed

verified

None...

View Answer

Which of the following items would be reported directly on the income statement as a period cost?


A) Selling and administrative salaries
B) Cost of lubricant for oiling machinery
C) Wages paid to machine operators
D) All of these

E) None of the above
F) All of the above

Correct Answer

verifed

verified

Product costs flow from the balance sheet to the income statement.

A) True
B) False

Correct Answer

verifed

verified

Is depreciation on manufacturing equipment expensed in the period incurred? Explain why or why not.

Correct Answer

verifed

verified

Depreciation on manufacturing ...

View Answer

Which of the following is not one of the four Standards of Ethical Conduct for Management Accountants?


A) Credibility
B) Confidentiality
C) Integrity
D) Independence

E) A) and D)
F) B) and C)

Correct Answer

verifed

verified

Unlike manufacturers,service companies do not have an inventory of products.

A) True
B) False

Correct Answer

verifed

verified

During its first year of operations,Silverman Company paid $14,000 for direct materials and $19,000 for production workers' wages.Lease payments and utilities on the production facilities amounted to $17,000 while general,selling,and administrative expenses totaled $8,000.The company produced 5,000 units and sold 3,000 units at a price of $15.00 a unit. What is the amount of finished goods inventory on the balance sheet at year-end?


A) $10,000
B) $20,000
C) $4,000
D) $15,000

E) A) and B)
F) C) and D)

Correct Answer

verifed

verified

Costs that are not classified as product costs are normally expensed in the period incurred.

A) True
B) False

Correct Answer

verifed

verified

According to the Sarbanes-Oxley Act,a company's audit committee is responsible for its system of internal controls.

A) True
B) False

Correct Answer

verifed

verified

Which of the following is not a reason management might be tempted to classify costs as product costs rather than expensing them during periods in which production exceeds sales?


A) The company's bank may be more likely to extend financing to the firm.
B) Income taxes will be lower.
C) Net income will be higher.
D) Management bonuses may be higher.

E) A) and C)
F) All of the above

Correct Answer

verifed

verified

Why do accountants normally calculate cost per unit as an average?


A) Determining the exact cost of a product is virtually impossible.
B) Some manufacturing-related costs cannot be accurately traced to specific units of product.
C) Even when producing multiple units of the same product, normal variations occur in the amount of materials and labor used.
D) All of these are justifications for computing average unit costs.

E) A) and D)
F) A) and B)

Correct Answer

verifed

verified

The Jacobson Manufacturing Company was started at the beginning of the current year when it acquired $200,000 from its owners.During the year,the company incurred the following costs,all for cash:  Direct material costs $80,000 Direct labor costs 100,000 Overhead costs 40,000 Selling and adrninistrative costs 60,000\begin{array} { l r } \text { Direct material costs } & \$ 80,000 \\\text { Direct labor costs } & 100,000 \\\text { Overhead costs } & 40,000 \\\text { Selling and adrninistrative costs } & 60,000\end{array} The company produced 10,000 units of product and sold 8,000 units.The average selling price was $34.00 per unit; all sales were for cash.The accountant who prepared the firm's financial statements misclassified the selling and administrative costs as product costs. Required: Demonstrate the impact of the error on the company's income statement and balance sheet by completing the following schedule: The Jacobson Manufacturing Company was started at the beginning of the current year when it acquired $200,000 from its owners.During the year,the company incurred the following costs,all for cash: \begin{array} { l r } \text { Direct material costs } & \$ 80,000 \\ \text { Direct labor costs } & 100,000 \\ \text { Overhead costs } & 40,000 \\ \text { Selling and adrninistrative costs } & 60,000 \end{array} The company produced 10,000 units of product and sold 8,000 units.The average selling price was $34.00 per unit; all sales were for cash.The accountant who prepared the firm's financial statements misclassified the selling and administrative costs as product costs. Required: Demonstrate the impact of the error on the company's income statement and balance sheet by completing the following schedule:

Correct Answer

verifed

verified

None...

View Answer

Steuben Company produces dog houses.During the current year,Steuben Company incurred the following costs:  Rent on manufacturing facility$250,000 Office manager’s salary 150,000 Wages of factory machine operator’s 110,000Depreciation on manufacturing equipment 50,000 Insurance and taxes on selling and administrative offices30,000Direct materials purchased and used 170,000\begin{array}{lrr} \text { Rent on manufacturing facility} &\$250,000\\ \text { Office manager's salary } &150,000\\ \text { Wages of factory machine operator's } &110,000\\ \text {Depreciation on manufacturing equipment } &50,000\\ \text { Insurance and taxes on selling and administrative offices} &30,000\\ \text {Direct materials purchased and used } &170,000\\\end{array} Wages paid to factory machine operators in producing the dog houses should be categorized as:


A) a product cost and recorded in the inventory account
B) a period cost and recorded on the income statement
C) a product cost and recorded on the income statement
D) a period cost and recorded in the inventory account

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

Which of the following statements is true with regard to product costs versus general,selling,and administrative costs?


A) Product costs associated with unsold units appear on the income statement as general expenses.
B) General, selling, and administrative costs appear on the balance sheet.
C) Product costs associated with units sold appear on the income statement as cost of goods sold.
D) None of these are true.

E) A) and B)
F) None of the above

Correct Answer

verifed

verified

The following information relates to the operations of Cruz Manufacturing during the current year:  Raw materials used $20,000 Direct labor wages 60,000Sales salaries and commissions 50,000 Depreciation on production equipment4,000 Rent on manufacturing facilities 30,000Packaging and shipping supplies 6,000 Sales revenue190,000 Units produced and sold10,000 Selling price per unit $20.00\begin{array}{lrr} \text { Raw materials used } &\$20,000\\ \text { Direct labor wages } &60,000\\ \text {Sales salaries and commissions } &50,000\\ \text { Depreciation on production equipment} &4,000\\ \text { Rent on manufacturing facilities } &30,000\\ \text {Packaging and shipping supplies } &6,000\\ \text { Sales revenue} &190,000\\ \text { Units produced and sold} &10,000\\ \text { Selling price per unit } &\$20.00\\\end{array} Based on this information,what is the company's cost of goods sold?


A) $86,000
B) $120,000
C) $114,000
D) $170,000

E) A) and C)
F) B) and D)

Correct Answer

verifed

verified

Which of the following costs should not be recorded as an expense?


A) Insurance on factory building
B) Sales commissions
C) Product shipping costs
D) Product advertising

E) A) and D)
F) A) and C)

Correct Answer

verifed

verified

Which of the following is a product cost for a construction company?


A) Cost of transporting raw materials to the job site
B) Wages paid to the company's payroll clerk
C) Rent of the company's main office
D) All of these.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Choose the answer that is not a distinguishing characteristic of financial accounting information.


A) It is global information that reflects the performance of the whole company.
B) It is focused primarily on the future.
C) It is more concerned with financial data than physical or economic data.
D) It is more highly regulated than managerial accounting information.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Period costs are initially recorded in asset accounts and are later expensed in the period when the related units are sold.

A) True
B) False

Correct Answer

verifed

verified

Showing 21 - 40 of 148

Related Exams

Exam 2

Cost Behavior, operating Leverage, and Profitability Analysis

153 Questions

Exam 3

Analysis of Cost, volume, and Pricing to Increase Profitability

149 Questions

Exam 4

Cost Accumulation,tracing,and Allocation

159 Questions

Exam 5

Cost Management in an Automated Business Environment: ABC, ABM, and TQM

154 Questions

Exam 6

Relevant Information for Special Decisions

153 Questions

Exam 7

Planning for Profit and Cost Control

152 Questions

Exam 8

Performance Evaluation

156 Questions

Exam 9

Responsibility Accounting

146 Questions

Exam 10

Planning for Capital Investments

156 Questions

Exam 11

Product Costing in Service and Manufacturing Entities

149 Questions

Exam 12

Job-Order, process, and Hybrid Costing Systems

148 Questions

Exam 13

Financial Statement Analysis

155 Questions

Exam 14

Statement of Cash Flows

149 Questions

Show Answer