Mid-Term

Managerial Accounting

Feb2014
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Financial and Managerial Accounting, 3e (Horngren)

Chapter 16 Introduction to Management Accounting

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1) \Vhich of the following statements about managerial accounting is CORRECT?

A) Managerial accounting reports are audited annually by Certified Public Accountants.
Managerial accounting reports help investors make decisions.
anagerial accounting reports provide detailed information on parts of a company.
Managerial accounting reports must follow Generally Accepted Accounting principles (GAAP).

2) Management is accountable to its employees in which of the following ways?

.A Providing products that are safe and free of defects

(.fil)Providing a safe workplace

C) Providing a return on the owner's shareholders' investment
D) Ensuring the business is environmentally responsible for impacts on the community

,....---__

3) Management is accountable to communities in which of the following ways?

,A}_Mak:ing timely payments to creditors
/ nsuring the company's environmental impact is not harmful to its area of operations
C) Providing a return on the owner's shareholders' investment
D) Obeying laws and paying taxes
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4) Managerial accounting includes the planning function. Which of the following items would be part of the
planning function of a business's managerial accounting?
omparing actual performance to previously budgeted amounts
B) reating detailed budgets

Implementing operational plans

. D) Evaluating results of operations

5) Managerial accounting includes the controlling function. \Vhich of the following items would be part of the
controlling function of a business's managerial accounting?
(Artomparing actual performance to previously budgeted amounts
/
Creating detailed budgets
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)( C) Devising marketing and production plans
Setting product prices

6) \Vhich of the following most accurately describes the term cost/benefit analysis?
A) Considering whether employees should be entitled to certain fringe benefits
B) Calculating the cost of holding fundraising benefits for charity
C) Considering whether the cost of products exceeds the market selling price
f'otconsidering whether the cost of calculating certain types of information provides a commensurate economic
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7) \Vhich of the following BEST describes the value chain?

A) A management information system which tracks the costs of products through the manufacturing process
B) The minimizing of inventory levels to reduce storage, insurance and finance costs
C) All activities that contribute to the continuous improvement of business operations
ine whole sequence of activities that add value to the goods and services sold to end-users

Period costs do NOT include which of the following?

'I.
)
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; I ales commissions
actory janitorial costs
Insurance on delivery vehicles
D) Advertising costs

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Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall

Chapter 17 Job Order and Process Costing

12) Which of the following companies would NOT use job order costing?
A) A lawn maintenance company
B) A legal firm
auto repair shop
beverage manufacturer

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13) A process costing system is useful in which of the following circumstances?

A) Providing specialized services
B) Production of unique products
Production of multiple products in separate batches
Mass production of a single type of product

14) The journal entry to record the incurrence of$1,500 of direct labor and $200 of indirect labor includes which of
the following?
A) Debit to Manufacturing overhead for $1,700
B) Debit to Work in process inventory for $1,500 and debit to Finished goods for $200
Debit to Work in process inventory for $1,700
Debit to Work in process for $1,500, debit to Manufacturing overhead for $200

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15) Specialty Wood Products company bad the following manufacturing labor costs last month:
$100,00(
$20,00(
$10,00(

Woodworkers' wages
Indirect laborers' wages
Maintenance personnel wages
to record the incurrence of these wa es?
100,00
30,00

C) Wages payable
Finished goods inventory
Work in process inventory

130,00(

130,00

100,00(
30,00(

16) Haverhill Products just completed job number 440. In addition to direct labor and direct materials cost,
Haverhill allocated $450 of manufacturing overhead to the job. Which of the following describes the correct
journal entry to record the allocation of overhead to the job?
A) Debit Finished goods, credit Manufacturing overhead
B) Debit Work in process, credit Cash
Debit Manufacturing overhead, credit Work in process
@Debit Weck in process, credit Manufacturing ove.-head

Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall

17) Inglesias Company just completed job number 12. See details below.
Direct labor cost: $840
Direct materials cost: $1,100
Machine hours for milling machinery: 7
Direct labor hours: 22
Predetermined manufacturing overhead allocation rate: $90 per machine hour
What was the total job cost?
$2,570
'B') $1,940
C) $1,947
D) $3 .920
18) Gardner Machine Shop estimates manufacturing overhead costs for the coming year at $3 16,000. They will
allocate based on direct labor hours. Gardner estimates 5,000 direct labor hours for the coming year. In January,
Gardener completed job number A33 , which included 15 direct labor hours. How much overhead was allocated to
the job?
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C) $1,204
D) $990

19) Halcyon Company just completed job number 10-B. See details below.
Direct labor cost: $2,040
Direct materials cost: $90
Direct labor hours: 75
Predetermined manufacturing overhead allocation rate:
Number ofunits offinished product: 200 units

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What was cost per unit offinished product? (Please round to nearest cent.)
A) $26.40
B) $46.80
C) $25.50
@$23 .40
20) Barbicon Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage of
direct labor cost. At the beginning of2012, they formulated a rate of20% times the direct labor cost. In June, 2012,
Barbicon completed job number 13 C. Job stats are as follows:
Direct materials cost
$6,220
$900
Direct labor cost
Direct labor hours
3 2 hours
Units ofproduct produced:
250 kilos
How much was the total job cost?
A) $8,3 64
B) $180
C) $7,120
$7,300
21) Rankin Food Products produces cane sugar syrup in bulk quantities and uses process costing. There are three
processing departments-Mixing, Refining, and Packaging. Using process costing analysis, Rankin determined that
the cost ofthe units completed and transferred out ofthe Refining Department during the month was $20,000
Which ofthe following is the correct journal entry to record the cost ofthe units completed and transferred o to th
next department?
A) Debit $20,000 to Work in process - Refining, credit $20,000 to Work in process - Packaging
Debit $20,000 to Work in process -Refining, credit $20,000 to Work in process - Mixing
Debit $20,000 to Work in process -Packaging, credit $20,000 to Work in process - Refining
) Debit $20,000 to Work in process - Packaging, credit $20,000 to Finished goods

Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall

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