Management Accounting

Budgeting is the process of establishing company-wide objectives that serve as a deter rent to waste and inefficiency.

The effectiveness of the budget program is directly related to its acceptance by all levels of management.

Budgeting always has the effect on human behavior of inspiring managers to higher levels of performance.

One disadvantage of budgeting is that it does not facilitate the coordination of activities within a business.

The sales budget is the first budget prepared and each of the other budgets depends on it.

The quantities of direct materials in the direct materials budget are derived from the formula: Desired Ending Direct Materials Units + Direct Materials Units Required for Production – Beginning Direct Materials Units = Required Direct Materials Units to be Purchased.

The manufacturing overhead budget shows only the expected indirect labor costs for the year.

The budgeted income statement indicates the expected profitability of operations for the next year and provides the basis for evaluating company performance.

Long-range planning differs from budgeting in the time period involved, emphasis, and the amount of detail presented.

Budgeting is not used in not-for-profit organizations because it is not necessary for these organizations to engage in profit planning.

A formal written statement of management’s plans for a specified future time period, expressed in financial terms is a(n)

Which of the following is not a benefit of budgeting?

All of the following are financial budgets except the

The master budget includes all of the following except

If required production units are 75,000, budgeted sales units are 65,000, required direct materials purchases units are 3,000, and beginning finished goods units are 5,000, then desired ending finished goods units would be

Determining the unit cost of manufacturing a product is an output of financial accounting

Controlling is the process of determining whether planned goals are being met. 

Decision-making is an integral part of the planning, directing and controlling functions. 

Manufacturing costs that cannot be calssified as direct materials or direct labor are classified as manufacturing overhead. 

Both direct labor cost and indirect labor cost are product costs.

Raw materials are equal to direct materials minus indirect materials.

In calculating gross profit for a manufacturing company, the cost of goods manufactured is deducted from net sales.

When the physical association of raw materials with the finished product is too small to trace in terms of cost, they are usually classified as indirect materials.

Many companies have significantly lowered inventory levels and costs using just-in-time inventory methods.

The inventory accounts that show the cost of completed goods on hand and the costs applicable to production that is only partially completed are, respectively

Many companies now focus on reducing defects in finished products with the goal of zero defects. This is called

Given the following data for Harder Company, compute cost of goods manufactured: Direct materials used $120,000
Direct labor 200,000
Manufacturing overhead 180,000 Operating expenses 175000
Beginning work in process $20,000
Ending work in process 10000 
Beginning finished goods 25000
Ending finished goods 15000

Wood Company has beginning work in process inventory of $138,000 and total manufacturing costs of $477,000. If cost of goods manufactured is $480,000, what is the cost of the ending work in process inventory?

Worth Company reported the following year-end information: beginning work in process inventory, $180,000; cost of goods manufactured, $866,000; beginning finished goods inventory, $252,000; ending work in process inventory, $220,000; and ending finished goods inventory, $264,000. Worth Company's cost of goods sold for the year is