Managerial Accounting Midterm Answers
Managerial Accounting Midterm Answers
- (TCO 1) Using managerial accounting reports to run operations is an example of which management responsibility?
- (TCO 1) Which of the following statements regarding financial accounting and managerial accounting is correct?
- (TCO 1) Which of the following professional standards applies to not engaging in any activity that would discredit the profession?
- (TCO 1) Which of the following is an inventoriable product cost?
- (TCO 1) Which of the following is a variable cost?
- (TCO 1) Which of the following is a conversion cost?
- (TCO 1) On December 31, 2015, XYZ Inc. has a balance in the Finished Goods Inventory account of $50,000. On January 1, 2015, the balance in the Finished Goods Inventory account was $75,000. On December 31, 2015, the balance in the Work-in-Process inventory account is $25,000. On January 1, 2015, the balance in the Work-in-Process inventory account is $10,000. Cost of goods manufactured is $160,000. How much is cost of goods sold?
- (TCO 2) Which of the companies below would be most likely to not use job-order costing?
- (TCO 2) James Company applies manufacturing overhead based on machine hours. Information concerning manufacturing overhead cost and hours for August follows.
- (TCO 2) During 2015, Thompson Company applied overhead using a job-order costing system at a rate of $15 per direct labor hour. Estimated direct labor hours for the year were 110,000, and estimated overhead for the year was $1,650,000. Actual direct labor hours for 2015 were 100,000, and actual overhead was $1,520,000. What is the amount of under- or over-applied overhead for the year?
- (TCO 2) ABC Company uses budgeted overhead rates to apply overhead to individual jobs. It uses a system based on direct labor hours. Last year, the company made the following estimates for this year.
(TCO 3) James Company uses process costing to track its costs in two sequential production departments: Forming and Finishing. The following information is provided regarding the Forming Department:
Month Ended June 30
Beginning work in process, June 1 --- 4,000
Started into production during June --- 22,000
Completed and transferred to Finished Department during June --- 20,000
Ending work in process, June 30 (20% complete as to direct materials and 50% complete as to conversion costs) --- 6,000
Beginning work in process as of June 1 (consists of $1,000 of direct materials costs and $4,500 of conversion costs) --- $5,500
Direct materials used in June --- $7,268
Conversion costs incurred in June --- $32,990
(a) Calculate the equivalent units for conversion costs. (Show your work)
(b) Calculate the cost per equivalent unit for conversion costs. (Show your work)
- (TCO 6) Classify each of the costs below within the ABC costing hierarchy as either unit-level, batch-level, product-level, or facility-level.
(a) Cost to inspect each product as it is finished
(b) Factory depreciation
(c) Machine setup
(d) Costs to hire human resource personnel
(e) Salary for a product-line manager
(f) Receiving raw materials from vendors
- (TCO 2) Drake Company incurred costs of $77,000 for direct materials (raw) purchased. Direct labor was $45,000 and factory overhead was $22,000 for March.
Inventories were as follows:
Raw materials beginning $10,000; raw materials ending $14,000
Work-in-process beginning $36,000; work-in-process ending $24,000
Finished goods beginning $5,000; finished goods ending $10,000
Required: Calculate the cost of goods manufactured for March for Drake Company. Show your work.
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(TCO 3) Managers are often required to make decisions about the future based