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12) The following information is available about the August transactions of the Helpful Tool...

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12) The following information is available about the August transactions of the Helpful Tool Company:

Invoices for product costs paid during the month $493,000

Product costs charged to Work in Process $737,000

Cost of finished goods manufactured $718,000

Cost of goods sold $739.000

The product costs to be deducted from revenue in August amount to:

a.$493,000.

b.$737,000.

c.$718,000.

d.$739,000.

13) In comparison with a financial statement prepared in conformity with generally accepted accounting principles, a managerial accounting report is less likely to:

a.Focus upon the entire organization as the accounting entity.

b.Focus upon future accounting periods.

c.Make use of estimated amounts.

d.Be tailored to the specific needs of an individual decision maker.

14) Which of the following is not one of the three types of inventories of a manufacturing company?

a.Raw materials inventory.

b.Work in process inventory.

c.Product inventory.

d.Finished goods inventory.

15) Debits to the Manufacturing Overhead account record:

a.The actual amounts of overhead costs incurred during a period.

b.The amount of overhead applied to production during a period.

c.The amount of overhead incurred on a specific job.

d.All conversion costs of a period.

16) The method used by managers when comparing unit costs with budgeted costs or other measures is broadly known as:

a.Sales management.

b.Cost control.

c.Employee evaluation.

d.Account reconciliation.

17)The type of cost accounting system best suited to a particular company depends on:

a.The nature of the company's manufacturing operations.

b.The requirements set forth by the FASB.

c.Government regulations.

d.The type of cost drivers available.

Cost Accounting

Cost accounting is a method by which the estimated costs in a company are compared with the actual costs. In this method, an effort is made to reduce the difference between them. The cost accounting method used in an organization depends upon the type of production process being carried out.

Answer and Explanation:

12) The following information is available about the August transactions of the Helpful Tool Company: Invoices for product costs paid during the month $493,000 Product costs charged to Work in Process $737,000 Cost of finished goods manufactured $718,000 Cost of goods sold $739.000 The product costs to be deducted from revenue in August amount to:

Option c.$718,000 is correct.

The reason is that cost of goods sold will be final cost that will be deducted from the revenue.

13) In comparison with a financial statement prepared in conformity with generally accepted accounting principles, a managerial accounting report is less likely to:

Option d. Be tailored to the specific needs of an individual decision maker is correct.

The reason is that in managerial accounting, the accounting reports of the company are communicated to the managers and there is less scope of altering them according to an individual?s decision.

14) Which of the following is not one of the three types of inventories of a manufacturing company?

Option c. Product inventory is correct.

The reason is that raw materials, work in progress and finished goods constitute the inventory in a manufacturing industry.

15) Debits to the Manufacturing Overhead account record:

Option b. The amount of overhead applied to production during a period is correct.

The reason is that the per unit production costs are debited from the manufacturing overhead account as they lead to a reduction in the cash balances of a company.

16) The method used by managers when comparing unit costs with budgeted costs or other measures is broadly known as:

Option b. Cost control is correct.

In the cost control method, the estimated costs are compared with the actual costs and an effort is made to reduce the difference between them.

17) The type of cost accounting system best suited to a particular company depends on:

Option a. The nature of the company's manufacturing operations is correct.

The reason is that the type of manufacturing process determines the cost accounting system that should be used.


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What is Idle Time in Cost Accounting?

from Financial Accounting: Tutoring Solution

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