MGAB03H3 Lecture 4: Week 4 - 5 chapter notes

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lavenderdonkey6

9 Jan 2011

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N manufacturing companies purchase raw materials and components and process them and make them into finished goods. N therefore, manufacturing companies may have leftover inventories in the raw materials account, the work-in-process (partially finished products) account, and the finished goods account at the end of an accounting period. N managers in merchandising companies need to prepare the schedule of cogs as a part of preparing the income statement. N managers in manufacturing companies need to prepare not only schedule of cogs but also schedule of cog manufactured. N managers necessarily measure past costs when producing financial statements and other reports of an organization"s profits. N outsiders, such as shareholders, use profitability to assess management performance and to make investment and other decisions. N managers also use past cost information to monitor operations, develop estimated costs for bids, and sometimes make long-term decisions such as whether to introduce a new product for all these decisions it is important to distinguish costs.

Related Questions

20.Cost of goods manufactured in a manufacturing company isanalogous to
a.Ending inventory in a merchandising company.
b.Beginning inventory in a merchandising company.
c.Cost of goods available for sale in a merchandisingcompany.
d.Cost of goods purchased in a merchandising company.

23.
Which of the following is not a manufacturing cost category?
a.Cost of goods sold
b. direct materials
c. direct labor
d.Manufacturing overhead

25.
The predetermined overhead rate is based on the relationshipbetween
a.estimated annual costs and actual activity.
b.estimated annual costs and expected annual activity.
c.actual monthly costs and actual annual activity.
d.estimated monthly costs and actual monthly activity.

27.
How have many companies significantly lowered inventory levels andcosts?
a.They use activity-based costing.
b.They utilize an enterprise resource planning system.
c.They have a just-in-time method.
d.They focus on a total quality management system.

28.
The sum of the direct materials costs, direct labor costs, andmanufacturing overhead incurred is the
a.cost of goods manufactured.
b.total manufacturing overhead.
c.total manufacturing costs.
d.total cost of work in process.

29.
Cost of goods manufactured equals $44,000 for 2008. Finished goodsinventory is $2,000 at the beginning of the year and $5,500 at theend of the year. Beginning and ending work in process for 2008 are$4,000 and $5,000, respectively. How much is cost of goods sold forthe year?
a.46500
b.42000
c.40500
d.47500

1.) When products held in inventory are sold:

A.)Cost of Goods Sold is credited.

B.)Work in Process Inventory is credited.

C.)Finished Goods Inventory is credited.

D.)Finished Goods Inventory is debited.

2.)Since manufacturing costs (direct materials, direct labor,and overhead) are incurred in the process of manufacturing units ofproduct, these costs are credited t

A.)	The Direct Materials Inventory, Direct Labor, and ManufacturingOverhead accounts respectively.
B.)	Liability accounts.
C.)	The Work in Process Inventory account.
D.)	The Cost of Goods Sold account.

3.)Management accounting systems are designed to assistorganizations in the performance of all of the following functionsexcept:

A.)	The assignment of decision-making authority over companyassets.
B.)	Planning and decision-making.
C.)	Monitoring, evaluating, and rewarding performance.
D.)	The preparation of income tax returns.

4.)In a schedule of cost of finished goods manufactured, thefigure for total manufacturing costs:

	A.) May be less than the cost of direct materials used.
	B.) May be less than the direct labor costs assigned toproduction.
	C.) May be less than the manufacturing overhead applied toproduction.
	D.) May be less than the cost of finished goodsmanufactured.

5.) When a manufacturing company purchases raw materials orcomponent parts to be used in manufacturing finished goods, thesecosts are initially debited to:

	A.) Expense accounts.
	B.) Raw Materials Inventory.
	C.) Finished Goods Inventory.
	D.) Manufacturing Overhead.

6.) The wages paid to employees working directly on a company'sproducts would be shown as a:

	A.) Credit to Direct Labor.
	B.) Debit to Direct Labor.
	C.) Credit to Work in Process.
	D.) Debit to Manufacturing Overhead.

7.) Amounts credited to the Work in Process inventory accountmay best be described as:

	A.) The cost of finished goods manufactured.
	B.) Total manufacturing costs charged to production.
	C.) The cost of goods sold.
	D.) Direct materials purchased, direct labor costs paid, andpayments for items classified as manufacturing overhead.

chocolatetiger413

Which type of company converts raw materials into finished products?

A. Not-for-profit

B. Service

C. Merchandising

D. Manufacturing

bronzecrow360

MGAB03H3 Lecture 4: Week 4 - 5 chapter notes

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