ACC 115 Chapter 18 Quiz Managerial Accounting

1. Which of the following statements is correct?

A. GAAP must be strictly applied for management accounting decisions as well as for financial reporting.
B. Both financial accounting and management accounting report information on future expectations of the
business for use by outsiders.
C. The main purpose of management accounting is to help managers make long-run business decisions.
D. For external reporting, GAAP requires companies to treat inventoriable product costs as an asset until
the product is sold.
(Use for 2 & 3)The following data are taken from the August financial statements of Best Toys
Manufacturing Company, Inc:
Beginning work in process inventory
$ 4,550
Ending work in process inventory
3,220
Beginning finished goods inventory
7,840
Ending finished goods inventory
8,110
Direct materials used
14,060
Direct labor
12,400
Indirect labor
1,550
Indirect materials
2,180
Factory insurance
1,800
Factory depreciation
4,300
Administrative expenses
3,760
2. What amount of cost of goods manufactured was reported on Best Toys August income statement?
A. $40,050
B. $36,290
C. $36,020
D. $37,620
3. Assume that Best Toys cost of goods manufactured equals $36,500. Based on the relevant
information in #3 above, What amount of cost of goods sold would be reported by Best Toys on the
August income statement?
A. $35,170
B. $36,770
C. $36,230
D. $37,830
4. Which of the following is NOT a component of manufacturing overhead?
A. Equipment depreciation
B. Direct labor
C. Supervisory salaries
D. Indirect materials
5. Work in process inventory involves:
A. goods that are in the manufacturing process but are not complete.
B. raw materials used in making a product.
C. completed goods not yet sold.
D. indirect manufacturing overhead.

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6. The ____________ summarizes the activities and costs that take place in the manufacturing plant over
the period.
A. manufacturing overhead
B. cost of goods manufactured
C. period costs
D. depreciation expense
7. Which of the following is a period cost?
A. Direct materials
B. Supervisory salaries
C. Depreciation on factory equipment
D. Advertising
8. Which of the following is NOT one of the Standards of Ethical Conduct for Management
Accountants?
A. Preserve confidentiality of information
B. Communicate information only to their immediate superiors
C. Maintain their professional competence
D. Act with integrity and objectivity
9. Which of the following accounts is used to accumulate the cost of manufacturing goods?
A. Raw materials inventory
B. Finished goods inventory
C. Research and development inventory
D. Work in process inventory
10. Which of the following is an inventory account of a manufacturing company?
A. Direct materials
B. Work in process
C. Finished goods
D. All of the above
11. Which of the following is an indirect cost of a manufacturer?
A. Direct materials
B. Direct labor
C. Manufacturing overhead
D. All of the above
12. In a furniture manufacturing company, the costs of wood used for furniture is identified as
A. Direct Materials
B. Direct Labor
C. Manufacturing Overhead
D. Period Costs
13. In a furniture manufacturing company, the wages of factory maintenance workers is identified as
A. Direct Materials
B. Direct Labor
C. Manufacturing Overhead
D. Period Costs

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14. In a furniture manufacturing company, the property taxes of office building is identified as
A. Direct Materials
B. Direct Labor
C. Manufacturing Overhead
D. Period Costs
15. In a furniture manufacturing company, the depreciation on the factory is identified as
A. Direct Materials
B. Direct Labor
C. Manufacturing Overhead
D. Period Costs
16. In a furniture manufacturing company, the wages of carpenters is identified as
A. Direct Materials
B. Direct Labor
C. Manufacturing Overhead
D. Period Costs

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