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Exam 18: Managerial Accounting Concepts and Principles

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Question 71

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The focus of managerial accounting information is on the organization as a whole.

A) True
B) False

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Question 72

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Last year, Flash Company sold 15,000 units of its only product. If sales decreased by 17% in the current year, how will total variable cost and total fixed cost be affected? $\begin{array} { l l } \text { Total Variable Cost } & { \text { Total Fixed Cost } } \\\text { A)Remains constant } & \text { Remains constant } \\\text { B)Increases } & \text { Decreases } \\\text { C)Decreases } & \text { Remains constant } \\\text { D)Remains constant } & \text { Decreases } \\\text { E)Remains constant } & \text { Increases }\end{array}$

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Question 73

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The purpose of managerial accounting information is to help ________ users make decisions while the purpose of financial accounting is to help ________ users make decisions.

The process of identifying costs as direct or indirect is referred to as classifying costs by________________ .

Use the following data to determine the cost of goods manufactured: $\begin{array} { l | c } \text { Beginning finished goods inventory } & \$ 10,800 \\\hline \text { Direct labor } & 30,600 \\\hline \text { Beginning work in process inventory } & 7,200 \\\hline \text { General and administrative expenses } & 13,500 \\\hline \text { Direct materials used } & 40,500 \\\hline \text { Ending work in process inventory } & 9,000 \\\hline \text { Indirect labor } & 6,300 \\\hline \text { Ending finithed goods inventory } & 9,500 \\\hline \text { Indirect materials } & 13,500 \\\hline \text { Depreciation -factory equipment } & 7,500\end{array}$

An internal control system consists of the policies and procedures managers use to do all of the following except:

A_______________ system means that a company acquires or produces inventory only when needed.

Walter Products and Sandburg Industries report the following information at December 31: WALTER SANDBURG $\begin{array} { l | l | l } \hline \text { Accounts Receivable } & \$ 41,000 & \$ 68,000 \\\hline \text { Cash } & 6,000 & 7,000 \\\hline \text { Finished Goods Inventory } & & 25,000 \\\hline \text { Work in Process Inventory } & & 40,000 \\\hline \text { Merchandise Inventory } & 48,000 & \\\hline \text { Prepaid Expenses } & 1,000 & 2,000 \\\hline \text { Raw Materials Inventory } & & 21,000\end{array}$ Required: (a) Which company is a manufacturer? Explain. (b) Prepare the Current Asset Section of the Balance Sheet for the manufacturer.

Which of the following items does not represent a difference between financial and managerial accounting?

A manufacturer's inventory that is not completely finished is called _________ .

Managerial accounting reports and information are used by external users and financial accounting by internal users.

For each of the characteristics below, identify whether it is a focus of financial accounting or managerial accounting. Use the letter F to identify financial accounting and M to identify managerial accounting. 1. Users are generally investors, creditors, analysts, and regulators. ________ 2. Used to assist managers in making planning and control decisions. ________ 3. Information is structured and controlled by GAAP. ________ 4. Information is available quickly without the need to wait for an audit. ________ 5. Information is mainly historical with some predictions. ________ 6. Emphasis of the information is a company's projects, processes, and divisions. ________ 7. Information is mostly monetary, but includes nonmonetary information.

Factory overhead costs may include all of the following except:

The balanced scorecard aids in continuous improvement by augmenting financial measures with information on the drivers or indicators of future financial performance.

A ________ cost does not change in total in proportion to changes in the volume of activity within the relevant range.

Identify and describe the three categories of manufacturing costs.

A company's prime costs total $4,500,000 and its conversion costs total $5,500,000. If direct materials are $2,000,000, calculate the overhead costs:

The following information pertains to the Frameworks Corporation for May. Calculate the cost of goods sold for the period: $\begin{array} { l c } \text { Beginning Finished Goods Inventory } & \$ 19,500 \\\text { Ending Finished Goods Inventory } & 18,000 \\\text { Cost of Goods Manufactured } & 126,80\end{array}$

The management concept of customer orientation encourages a company to set up its production system to produce large quantities of the same product for all customers.

Which of the following accounts would appear on a schedule of cost of goods manufactured?