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Exam 18: Managerial Accounting Concepts and Principles

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Question 71

True/False

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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 72

Multiple Choice

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A direct cost is a cost that is:

A) Identifiable as controllable.
B) Variable with respect to the volume of activity.
C) Fixed with respect to the volume of activity.
D) Traceable to a cost object.
E) Sunk with respect to a cost object.

F) A) and D)
G) B) and D)

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Question 73

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If beginning and ending goods in process inventories are $5,000 and $15,000, respectively, and cost of goods manufactured is $170,000, what is the total manufacturing cost for the period?

Prime costs consist of direct labor and factory overhead.

If the cost of the beginning goods in process inventory is $10,000, costs of goods manufactured is $890,000, direct materials cost is $330,000, direct labor cost is $210,000, and overhead cost is $315,000, calculate the ending goods in process inventory:

Juliet Corporation has accumulated the following accounting data for the year: The cost of goods manufactured for the year is:

Period costs for a manufacturing company would flow directly to:

Explain what is meant by the "lean business model" and why many businesses have adopted it.

Total manufacturing costs incurred during the year do not include:

Although direct labor and raw materials costs are treated as manufacturing costs and therefore make up part of the finished goods inventory cost, factory overhead is charged to expense as it is incurred because it is a period cost.

Products that have been completed and are ready to be sold by the manufacturer are called:

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.

A sunk cost has already been incurred and cannot be avoided or changed, so it is irrelevant to decision making.

The three major cost components of a manufactured product are:

Choosing to outsource a component of a product or manufacture it internally is an example of a(n) :

Goods a company acquires to use in making products are called:

The main goal of the lean business model is the elimination of waste while satisfying the customer and providing a positive return to the company.

The total cost of goods completed during the accounting period for a manufacturer is called:

The cost of partially completed products is included in the balance of the Goods in Process Inventory account.

Raw materials that become part of a product and are identified with specific units or batches of a product are called direct materials.