Chapter 16 Test
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16.4-3 Given the following information, determine the cost of goods sold.
Direct Labor Incurred $62,000
Manufacturing Overhead Incurred 175,000
Direct Materials Used 150,000
Finished Goods Inventory, Jan. 1 198,000
Finished Goods Inventory, Dec. 31 98,500
Work-in-Process Inventory, Jan. 1 221,000
Work-in-Process Inventory, Dec. 31 108,000
16.2-1 Service companies sell their time, skills, and knowledge.
16.5-7 Samson, Inc. reported the following information for the year:
Service Revenue $60,000
Operating Expenses 21,000
Net Income 39,000
Number of Services Provided for the Year 10,500
How much was the unit cost per service? (Round your answer to the nearest cent.)
16.2-33 Robbinsdale, Inc. is a merchandiser of stone ornaments. The company sold 8,000 units during the year. The company has provided the following information:
Sales Revenue $559,000
Purchases (excluding freight in) 303,000
Selling and Administrative Expenses 67,000
Freight In 14,000
Beginning Merchandise Inventory 46,000
Ending Merchandise Inventory 43,000
What is the cost of goods available for sale for the year?
16.1-8 Which of the following statements is true of managerial accounting?
A. The external stakeholders of a company are the primary users of managerial accounting.
B. An external audit by an independent CPA is required for managerial accounting information.
C. Managerial accounting information must comply with Generally Accepted Accounting Principles.
D. Managerial accounting information is used to help managers plan and control their operations.
16.5-16 Kentucky, Inc. purchases and sells widgets. The following information summarizes the company's operating activities for the year:
Selling and Administrative Expenses $5,300
Purchases 157,000
Sales Revenue 785,000
Merchandise Inventory, January 1 2,350
Merchandise Inventory, December 31 38,350
If the company sold 7,900 units of widgets during the year, how much is the cost for one widget? (Round your answer to the nearest cent.)
16.1-21 Management of a company is accountable to ________ for obeying laws and paying taxes.
A. the government
B. its asset vendors
C. the securities exchange
D. the natural environment
16.4-20 Given the following information, determine the cost of goods manufactured.
Direct Labor Incurred $62,000
Manufacturing Overhead Incurred 177,000
Direct Materials Used 151,000
Finished Goods Inventory, Jan. 1 197,000
Finished Goods Inventory, Dec. 31 99,000
Work-in-Process Inventory, Jan. 1 221,000
Work-in-Process Inventory, Dec. 31 108,000
A. $390,000
B. $503,000
C. $282,000
D. $188,000
16.3-3 The wages of manufacturing plant janitors are considered to be non-manufacturing overhead costs as these costs are not directly related to the manufacturing process.
True
False
16.5-1 Managerial accounting is used in manufacturing and merchandising companies, but not in service companies.
True
False
16.3-40 Which of the following is an example of direct labor cost in a factory?
A. salary of vice president of production
B. wages of factory security guard
C. salary of production manager
D. wages of assembly line personnel
16.2-10 For external reporting purposes, GAAP requires companies to treat period costs as assets.
True
False
16.4-41 Evanston Manufacturing, Inc. reported the following information for the year:
Number of Units Produced 152,000
Number of Units Sold 62,000
Cost of Goods Manufactured $268,000
Cost of Goods Sold 52,900
Sales Revenue 130,000
Gross Profit 72,940
Operating Expense 727,000
What was the unit product cost? (Round your answer to the nearest cent.)
A. $1.76
B. $0.86
C. $0.85
D. $4.32
16.3-71 Which of the following will be classified as a conversion cost?
A. depreciation on factory equipment
B. salary of sales personnel
C. cost of direct materials used
D. depreciation on office furniture
16.1-37 You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company's bonds. Which of the IMA standards appears to have been violated here?
A. competence
B. integrity
C. confidentiality
D. objectivity
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