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Exam 1: Managerial Accounting Concepts and Principles

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Question 51

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Using the information below, calculate net income for the period: $\begin{array} { l r } \text { Sales reverues for the period } & \$ 1,304,000 \\\text { Operating expenses for the period } & 239,000 \\\text { Finished Goods Irventory, Jaruary 1 } & \mathbf { 3 6 , 0 0 0 } \\\text { Finished Goods Irventory, Decernber } 31 & 41,000 \\\text { Cost of goods marufactured for the period } & 540,000\end{array}$

A) $774,000.
B) $769,000.
C) $530,000.
D) $535,000.
E) $448,000.

F) C) and D)
G) All of the above

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Question 52

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To be certified under ISO 9000 standards, companies must use a quality control system and document that it achieves the desired quality level.

A) True
B) False

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Question 53

Multiple Choice

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A fixed cost:

Using the information below, compute the raw materials inventory turnover:

Current information for the Healey Company follows: $\begin{array} { | l | r | } \hline \text { Beginning raw materials inventory } & \$ 15,200 \\\hline\text { Raw material purchases } & 60,000 \\\hline \text { Ending raw materials inventory } & 16,600 \\\hline \text { Beginning work in process inventory } & 22,400 \\\hline \text { Ending work in process inventory } & 28,000 \\\hline \text { Direct labor } & 42,800 \\\hline \text { Total factory overhead } & 30,000 \\\hline\end{array}$ All raw materials used were traceable to specific units of product. Healey Company's total manufacturing costs for the year are:

Walter Products and Sandburg Industries report the following information at December 31: Required: (a) Which company is a manufacturer? Explain. (b) Prepare the Current Asset Section of the Balance Sheet for the manufacturer.

The process of identifying costs as direct or indirect is referred to as classifying costs by ________.

A lean business model aims to eliminate waste while satisfying the customer and providing a positive return to the company.

________ is the deliberate misuse of the employer's assets for the employee's personal gain.

Using the information below, compute the Days' sales in raw materials inventory:

The Tacky Company manufactures staples. Costs for October were direct labor, $84,000; indirect labor, $36,700; direct materials, $55,900; factory maintenance, $4,800; factory utilities, $3,200; and insurance on plant and equipment, $700. What is Tacky Company's factory overhead for October?

A company's prime costs total $3,000,000 and its conversion costs total $7,000,000. If direct materials are $1,000,000 and factory overhead is $5,000,000, then direct labor is:

Adopting a lean business model should have no effect on cost in a modern manufacturing environment.

If beginning and ending work 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?

Four factors come together in production activity: beginning work in process inventory, raw materials, direct labor, and factory overhead.

Last year, Wesson Company sold 10,000 units of its only product. If sales increase by 12% in the current year, how will unit variable cost and unit fixed cost be affected?

Which one of the following items is normally not a manufacturing cost?

An employee is dissatisfied with the resolution of an ethical conflict with his supervisor at his place of employment. According to the Institute of Management Accountants, the employee's next step should be to:

Using the information below, compute the Days' sales in raw materials inventory:

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