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Exam 1: Managerial Accounting Concepts and Principles

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Question 91

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A manufacturing company has a beginning finished goods inventory of $14,600, raw material purchases of $18,000, cost of goods manufactured of $32,500, and an ending finished goods inventory of $17,800. The cost of goods sold for this company is:

A) $21,200.
B) $29,300.
C) $32,500.
D) $47,100.
E) $27,600.

F) B) and D)
G) C) and D)

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Question 92

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The series of activities that add value to a company's products or services is called a value chain.

A) True
B) False

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Question 93

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Managerial accounting provides financial and nonfinancial information to an organization's managers and other internal decision makers.

Last year, Flash Company sold 15,000 units of its only product. If sales increased by 20% in the current year, how will total variable cost and total fixed cost be affected?

Direct materials are not easily traced to a product.

________ inventory consists of goods a company acquires to use in making products.

For a manufacturer, the cost of goods sold can be computed by adding the beginning finished goods inventory to ________ and then subtracting the ending finished goods inventory.

Costs are important to managers because they impact both the financial position and profitability of a business.

________ are beliefs that distinguish right from wrong.

The model whose goal is to eliminate waste while satisfying the customer and providing a positive return to the company is the ________.

Which of the following represents the correct formula for calculating days' sales in raw materials inventory for a manufacturer?

Total quality management (TQM) is a system that acquires inventory and produces only when needed.

The Institute of Management Accountants (IMA) Statement of Ethical Professional Practice requires that management accountants be competent and act with integrity.

Both financial and managerial accounting report monetary information; managerial accounting also reports considerable nonmonetary information.

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?

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

Enterprise risk management (ERM) includes the systems and process companies use to maximize the effect of risk.

Crane, Inc. reported the following data regarding costs and inventories for the current year: beginning goods-in-process inventory, $4,000; beginning finished goods inventory, $2,000; cost of goods manufactured, $11,500; operating expenses, $3,000; ending finished goods inventory, $1,000; ending goods-in-process inventory, $1,500. Cost of goods sold for Crane, Inc. equals ________.

For each item shown below, classify it as a product cost or a period cost, by placing an X in the appropriate column. For each item that is a product cost, also indicate whether it is a direct cost or an indirect cost with respect to a unit of finished product.

Last year, Gordon Company sold 20,000 units of its only product. If sales increase by 20% in the current year, how will unit variable cost and total fixed cost be affected?