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Accounting 526 Midterm
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Accounting 526 Midterm
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ACCT 526 MidtermPeriod Costs - ANS-Costs that are matched with the revenue of a specific time period
and charged to expense as incurred.
Indirect Labor - ANS-Work of factory employees that has no physical association with
the finished product, or it is impractical to trace the costs to the good produced.
Product Costs - ANS-costs that are a necessary and integral part of producing the
finished product
Manufacturing Overhead - ANS-Manufacturing costs that are indirectly associated with
the manufacture of the finished product.
Managerial Accounting - ANS-A field of accounting that provides economic and financial
information for internal users.
Direct Labor - ANS-The work of factory employees that can be physically and directly
associated with converting raw materials into finished goods.
Manufacturing Overhead - ANS-Identify: Factory supervisor's salary
Period Costs - ANS-Identify: Supplies for the general office
Direct Materials - ANS-Identify: Rubber latex purchased for the use in the manufacture
of automobile tires
Period Costs - ANS-Identify: Advertising
Manufacturing Overhead - ANS-Identify: Rent on factory equipment
Period Costs - ANS-Identify: Utility cost for the store
Period Costs - ANS-Identify: Salary paid to the company's chief executive officer
Manufacturing Overhead - ANS-Identify: Salary paid to mechanics who maintain and
repair factory equipment
,Direct Labor - ANS-Identify: Wages paid to assembly-line workers who install interiors in
automobiles
a. deal with the economic events of an enterprise - ANS-Financial and managerial
accounting are similar in that both:
a. deal with the economic events of an enterprise.
b. produce general-purpose reports.
c. have the same primary users.
d. have reports that are prepared quarterly and annually.
c. the product is sold - ANS-Product costs are expenses on the income statement when:
a. the product completes the manufacturing process.
b. the order is received for the product.
c. the product is sold.
d. raw materials for the product are purchased.
a. $22,500
15,500 + 44,500 - 37,500 = - ANS-Super Tread Inc. is a large manufacturer of auto
tires. Super Tread has provided the following information:
Sales Revenue $55,000
Beginning Finished Goods Inventory $15,500
Cost of Goods sold $37,500
Cost of Goods Manufactured $44,500
Calculate the amount of ending Finished Goods Inventory reported on Super Tread's
balance sheet.
c. $1,135,000
Direct Materials (81,000+360,000-59,000) + Direct Labor (471,000) + Factory Overhead
(19,000+24,000+268,000) + Work-in-Process (26,000-55,000) - ANS-Payton
Corporation provided the following information for the year:
Beginning Balance - Work-in-Process Inventory $26,000
Ending Balance - Work-in-Process Inventory $55,000
Beginning Balance - Direct Materials 81,000
Ending Balance - Direct Materials 59,000
Purchases - Direct Materials 360,000
Direct Labor 471,000
Indirect Labor 19,000
, Depreciation on Factory Plant and Equipment 24,000
Plant Utilities and Insurance 268,000
What was the amount of the cost of goods manufactured for the year?
a. $1,363,000
b. $1,193,000
c. $1,135,000
d. $1,164,000
c. $86,620
Product Costs = Direct Materials (27,500) + Direct Labor (36,000) + factory repair and
maintenance (920) + Manufacturing equipment depreciation (1,200) + Indirect materials
(8,000) + Indirect labor (13,000) - ANS-The following relates to Harrison, Inc:
Advertising Costs $10,600
Sales Salary 10,000
Sales Revenue 500,000
President's Salary 230,000
Office Rent 60,500
Manufacturing Equipment Depreciation 1,200
Indirect Materials Used 8,000
Indirect Labor 13,000
Factory Repair and Maintenance 920
Direct Materials Used 27,500
Direct Labor 36,000
Delivery Vehicle Depreciation 1,550
Administrative Salaries 22,000
How much were Harrison's product costs?
d. $260
312,000/1200 - ANS-The following information is available from Avery Company, a
manufacturer of security cameras:
Cost of Goods Manufactured $312,000
Total Units Produced 1,200
Number of Units Sold 850
Cost of Goods Sold $275,000
The unit product cost for a security camera is:
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