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Exam 26: Accounting for Manufacturing Activities

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Question 41

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The balance sheet of a manufacturing business shows:

A) the finished goods inventory and the cost of goods manufactured.
B) the cost of goods manufactured rather than inventory figures.
C) a single inventory figure-the amount of the finished goods inventory.
D) the raw materials inventory, the work in process inventory, and the finished goods inventory.

E) None of the above
F) A) and B)

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Question 42

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Match the following definitions with the terms

Premises

Responses

Costs attributable to personnel who support production but are not directly involved in the manufacture of a product; for example, supervisory, repair and maintenance, and janitorial staff

Direct Labor

The cost of completed products ready for sale; corresponds to the Merchandise Inventor account of a merchandising business

Direct Materials

The materials placed into production

Finished Goods Inventory

Partially completed units in the production process

Indirect Labor

The costs attributable to personnel who work directly on the product being manufacture

Indirect Materials and Supplies

All items that go into a product and become a part of it

Manufacturing Overhead

Materials used in manufacturing a product that do not become a part of the product

Manufacturing Summary Account

All manufacturing costs that are not classified as direct materials or direct labor

Raw Materials

A financial report showing details of the cost of goods completed for a manufacturing business

Statement of Cost of Goods Manufactured

The account to which all items on the statement of cost of goods manufactured are close

Work in Process

Premises

Costs attributable to personnel who support production but are not directly involved in the manufacture of a product; for example, supervisory, repair and maintenance, and janitorial staff

The cost of completed products ready for sale; corresponds to the Merchandise Inventor account of a merchandising business

The materials placed into production

Partially completed units in the production process

The costs attributable to personnel who work directly on the product being manufacture

All items that go into a product and become a part of it

Materials used in manufacturing a product that do not become a part of the product

All manufacturing costs that are not classified as direct materials or direct labor

A financial report showing details of the cost of goods completed for a manufacturing business

The account to which all items on the statement of cost of goods manufactured are close

Responses

Direct Labor

Direct Materials

Finished Goods Inventory

Indirect Labor

Indirect Materials and Supplies

Manufacturing Overhead

Manufacturing Summary Account

Raw Materials

Statement of Cost of Goods Manufactured

Work in Process

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Correct Answer

Premises

Responses

Costs attributable to personnel who support production but are not directly involved in the manufacture of a product; for example, supervisory, repair and maintenance, and janitorial staff

The cost of completed products ready for sale; corresponds to the Merchandise Inventor account of a merchandising business

The materials placed into production

Partially completed units in the production process

The costs attributable to personnel who work directly on the product being manufacture

All items that go into a product and become a part of it

Materials used in manufacturing a product that do not become a part of the product

All manufacturing costs that are not classified as direct materials or direct labor

A financial report showing details of the cost of goods completed for a manufacturing business

The account to which all items on the statement of cost of goods manufactured are close

Premises

Costs attributable to personnel who support production but are not directly involved in the manufacture of a product; for example, supervisory, repair and maintenance, and janitorial staff

The cost of completed products ready for sale; corresponds to the Merchandise Inventor account of a merchandising business

The materials placed into production

Partially completed units in the production process

The costs attributable to personnel who work directly on the product being manufacture

All items that go into a product and become a part of it

Materials used in manufacturing a product that do not become a part of the product

All manufacturing costs that are not classified as direct materials or direct labor

A financial report showing details of the cost of goods completed for a manufacturing business

The account to which all items on the statement of cost of goods manufactured are close

Responses

Question 43

Short Answer

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As part of the adjusting entries, the beginning inventory of work in process is closed into the-----------account.

Use the following information for the problems. -Calculate the Cost of Goods Manufactured.

Immediately before it is closed, the balance of the Manufacturing Summary account represents the cost of goods manufactured.

Once the financial statements have been prepared, the steps in the accounting cycle are complete. Which of the following is NOT one of the steps in the accounting cycle?

The following information appears on the income statement of the Richer Company at the end of th year: $\begin{array}{lr}\text { Beginning finished goods inventory } & \$ 152,000 \\\text { Ending finished goods inventory } & 137,000 \\\text { Sales } & 475,000 \\\text { Gross Profit on Sales } & 142,000\end{array}$

Describe the process for adjusting entries for inventory in a manufacturing firm. How many adjustments are made for inventory? To what account are the adjustments to inventory made?

If the ending finished goods inventory is greater than the beginning finished goods inventory, the cost of goods sold will be higher than the cost of goods manufactured.

Match the definitions provided with the following terms.

Cleaning materials and lubricants used in factory operations and maintenance are considered manufacturing overhead.

Labor costs in manufacturing can be:

Under the perpetual inventory method, additions and deletions of inventory items are recorded as they occur to which of the following?

The manufacturing summary account is a temporary account used to close out manufacturing costs before transferring the balance to Finished Goods.

Gross profit for a manufacturing business is calculated by:

Use the following information for the questions. The Balance Sheet headings and the accounts and their balances for Exemplar Manufacturing are listed in alphabetical order. Exemplar Manufacturing has a fiscal year end of June 30, 2019. -Using the information given, prepare the Current Assets section of the Balance Sheet for Exemplar Manufacturing. Include correct indentations, underlines, dates, and capitalization where needed.

Use the following information for Hardy Co. Raw Materials Used $ 5,000 Hardy, Co.'s cost of goods manufactured for the current year is:

The salary paid to a factory supervisor is classified as ----------.

Fill in the missing line items on the Statement of Cost of Goods Manufactured given. Include corre indentations, underlines, dates, and capitalization when needed. Natant Products Statement of Cost of Goods Manufactured Year Ended December 31, 2019

Information about depreciation, insurance, and property taxes for the factory building of a manufacturing business would be shown in the Operating Expenses section of the income statement.