Provide management accounting information
Assessment (Process financial transactions and interim report)
Part 1 - Multiple Choice ( Circle the one best answer)
1. Which one of the following would be considered a user of management accounting information?
A. Stockholders B. Controller C. Creditors D. Suppliers
2. Which of the following would NOT be a characteristic of managerial accounting?
A. It is designed to influence the behaviour of managers.
B. It is future oriented.
C. It must follow GAAP just like financial accounting.
D. It varies from hourly reports to reports that may span 20 years.
3. The term used to describe the assignment of direct costs to the particular cost object is
A. cost allocation. B. cost tracing. C. cost accumulation. D. cost assignment.
4. The term used to describe the assignment of indirect costs to a particular cost object would be
A. cost allocation B. cost tracing C. cost accumulation D. cost assignment.
5. As the quantity produced increases, fixed costs per unit are expected to
A. increase per unit.
B. decrease per unit.
C. stay the same per unit.
D. None of the above.
6. The cost of materials that have been started into production, but are not completely processed, would be found in which inventory account on the balance sheet?
A. Direct materials inventory.
B. Work-in-process inventory.
C. Supplies inventory.
D. Finished goods inventory.
7. Costs at a service sector company are normally considered
A. inventoriable costs.
B. period costs.
C. prime costs.
D. None of the above.
8. Which of the following is NOT a feature of cost accounting and cost management?
A. Calculating the cost of cost objects.
B. Obtaining information for planning, control and performance evaluation.
C. Analyzing relevant information for making decisions.
D. Allocating period costs to specific products.
9. As activity changes, a cost that is variable will
A. vary per unit.
B. remain the same per unit.
C. vary inversely with activity per unit.
D. remain the same in total amount.
10. Ford Automotive Company is considered an example of a
A. merchandiser.
B. service company.
C. manufacturer.
D. wholesaler.
Part 2 Answer all questions below
Question: 1.
Zebra Productions presents you with the following data for the month of March 2014.
$
Purchases 42 300
Direct labor cost 10 000
Cost of goods sold 61 000
Manufacturing overheads 15 000
Inventory accounts showed the following opening and closing balances:
|
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1stMarch $
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31st March
$
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Direct materials
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7,000
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7,400
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Work-in-procss
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9,600
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13,000
|
|
Finished goods
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15,000
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17,500
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Other expenses for the month were:
Selling expenses $4,100
General and administrative expenses $2,900
Sales for the month were $82,000
Required:
a) Prepare Manufacturing Statement for the month ending 31st March
b) Trading Account for the month.
c) Profit & Loss Statement for the same month.
a) Manufacturing statement:
Zebra Production's Manufacturing Statement for month ended 31st March 2014
Raw materials inventory
Purchases
Total materials available
Less: Raw Materials Inventory
Cost of raw materials consumed
Cost of direct labour
Cost of manufacturing overhead
Total Cost charged into production
Add: Work-in-Process Inventory
Less: Work-in-Process Inventory
Cost of goods manufactured
b) Trading statement:
Zebra Productions Trading Statement for month ended 31st March 2014 $ $
Sales
Less: Cost of goods sold:
Gross profit from sales
c) Profit and loss statement:
Zebra Productions Profit and Loss Statement for month ended 31st March 2014 $ $
Sales
Less: Cost of goods sold
Gross profit from sales
Less: Operating expenses
Selling expenses
General and administrative expenses
Net operating profit
Question 2
Zaynab Appliance uses a perpetual inventory system. For its flat-screen television sets, the 1 January inventory was three sets at $500 each. On 10 January, purchased six units at $560 each. The company sold two units on 8 January and five units on 15 January.
Required:
Calculate the ending inventory under FIFO
Question 3
Materials transactions for Shiela Manufacturers Ltd. for the first week of Februaryare presented below.
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2013
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Transaction
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Document
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Mar 10
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Purchased direct materials from Tiffini Ltd. for $350
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Invoice. No. 390
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12
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Issued materials to production - $250
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Materials
Requisition No. 31
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18
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Returned faulty material to Tiffini Ltd. - $50
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Credit Note No. 42
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25
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Materials returned to store from production - $25
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Returned Materials
Report No. 12
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Required:
Record the above transections in General Journal of Shiela Manufacturer Ltd.
Question 4
Why is inventory control so important? What are the differences between The periodic inventory method and The perpetual inventory method