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Exam 16: Introduction to Management Accounting

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Question 31

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Which of the following statements about financial accounting is CORRECT?

A) Financial accounting is oriented towards helping investors make decisions.
B) Financial accounting is forward-looking.
C) Financial accounting is focused on detailed reports on parts of the company.
D) Financial accounting is focused on planning and controlling operations.

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

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Question 32

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A service company's income statement does NOT include cost of goods sold.

A) True
B) False

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Question 33

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Which of the following is NOT one of the key standards of ethical practice published by the IMA?

Managerial accounting includes the planning function. Which of the following items would be part of the planning function of a business's managerial accounting?

Harrison Company reports the following cost information for August: $\begin{array}{|l|r|}\hline \text { Cost of goods manufactured } & \$ 135,800 \\\hline \text { Finished goods inventory, Aug. 1 } & 30,200 \\\hline \text { Finished goods inventory, Aug. 31 } & 35,300 \\\hline \text { Work in process inventory, Aug. 1 } & 22,500 \\\hline \text { Work in process inventory, Aug. 31 } & 18,500 \\\hline \text { Direct materials used } & 25,300 \\\hline\end{array}$ - What is the amount of direct labor incurred by Harrison Company in August?

The wages and benefits of the assembly line workers are product costs.

Merchandising businesses resell goods which they purchase from a producer.

For a manufacturing business, which of the following would be considered a direct labor cost?

For a manufacturing business, which of the following would be included in manufacturing overhead?

The costs of indirect materials cannot easily be traced to the manufactured product and is therefore a component of manufacturing overhead.

Budget preparation is a part of the planning process.

Accounting, legal and administrative costs are product costs.

For a manufacturing business, which of the following would be considered an inventoriable product cost?

Managerial accounting is focused on which of the following objectives?

The following information pertains to Bright Toy Company's operating activities for 2012. The company sells light box toys and sold 10,000 units in 2012. $\begin{array}{|l|r|}\hline \text { Purchases } & \$ 126,000 \\\hline \text { Selling and Administrative Expenses } & 90,000 \\\hline \text { Merchandise inventory, } 1 / 1 / 2012 & 14,000 \\\hline \text { Merchandise inventory, } 12 / 31 / 2012 & 10,000 \\\hline \text { Sales Revenue } & 250,000 \\\hline\end{array}$ - What is the profit margin percentage?

Which of the following is NOT an advantage of just-in-time inventory management?

Increased global competition has resulted in many companies moving their operations to other countries to be closer to new markets.

The sales manager for Baker Products told the shipping department to ship an order to a customer on the last day of December instead of the previously scheduled shipping date of January 2. This would allow the company to book the sales revenue in the year just ended and boost year-end profit. Although done deliberately to boost income, the action did not misrepresent any facts of the situation, and so it would not be considered unethical.

Arturo Manufacturing Company provided the following information for the year 2012: $\begin{array} { l r } \text { Beginning balance-work in process inventory } & \$ 12,000 \\\text { Ending balance-work in process inventory } & \$ 28,000 \\\text { Beginning balance-direct materials inventory } & \$ 42,000 \\\text { Ending balance-direct materials inventory } & \$ 30,000 \\\text { Purchases-direct materials } & \$ 180,000 \\\text { Direct labor } & \$ 235,000 \\\text { Indirect materials } & \$ 23,500 \\\text { Indirect labor } & \$ 9,500 \\\text { Depreciation on factory plant \& equipment } & \$ 12,000 \\\text { Plant utilities \& insurance } & \$ 135,000\end{array}$ - Please refer to the T-accounts below which show the beginning balances for the year. Use the T-accounts to record the transactions for the year. What is the ending balance in the finished goods inventory?

Management is accountable to various government bodies in which of the following ways?