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.