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The cost of inventory reported on the balance sheet may include the cost of all the

following EXCEPT: (Points :2) advertising wages of the plant supervisor depreciation of
the factory equipment parts used in the manufacturing process
7. For a manufacturing company, what type of position (line or staff) is each of the
following?

A)
B)
C)
D)

Manager of a Data
Processing Department
Staff
Staff
Line
Line

Manager of a Production
Department
Staff
Line
Staff
Line

8. ____________ is an example of a line position. (Points :2) Controller for a


merchandising company Chief financial officer of a merchandising company Store
manager for Best Buy Human resources manager for a community college
9. Which of the following is NOT one of the three major customer value propositions
discussed in the text? (Points :2) customer intimacy discount pricing operational
excellence product leadership
10. Which of the folloiwng is NOT one of the five steps in the lean thinking model
discussed in the text? (Points :2) Continuously pursue perfection in the business process.
Identify value in specific products/services. Implement an enterprise system. Create a
pull system that responds to customer orders.
11. One consequence of a change from a push to a properly implemented pull production
system can be: (Points :2) an increase in work in process inventories. an extremely
difficult cultural change due to enforced idleness when demand falls below
production capacity. an increased mismatch between what is produced and what is
demanded by customers. an increase in raw materials inventories.
12. All of the following are characteristics of a pull production system EXCEPT:
(Points :2) Inventories are reduced to a minimum by purchasing raw materials and
producing units only as needed to meet consumer demand. Raw materials are released
to a production far in advance of being needed to ensure no interruptions in work
flows due to shortages of raw materials. Products are completed just in time to be
shipped to customers. Manufactured parts are completed just in time to be assembled into
products.
13. The five step framework used to guide Six Sigma improvement efforts includes all of
the following EXCEPT: (Points :2) Analyze. Control. Digitize. Measure.

14. The Sarbanes-Oxley Act of 2002 contains all of the following provisions EXCEPT:
(Points :2) The audit committee of the board of directors of a company must hire,
compensate, and terminate the public accounting firm that audits the company's financial
reports. Financial statements must be audited once every three years by the
Government Accounting Office. Both the CEO and CFO must certify in writing that
their company's financial statements and accompanying disclosures fairly represent the
results of operations. A company's annual report must contain an internal control report.
15. The one cost that would be classified as part of both prime cost and conversion cost
would be: (Points :2) indirect material direct labor direct material indirect labor
16. Which of the following is NOT a period cost? (Points :2) Monthly depreciation of
the equipment in a fitness room used by factory workers. Salary of a billing clerk.
Insurance on a company showroom, where current and potential customers can view new
products. Cost of a seminar concerning tax law updates that was attended by the
company's controller.
17. Shown below are a number of costs incurred last year at Mecca Publishing Co., a
manufacturer of elementary school textbooks: Solvents and cleaners used by the
custodians to clean the textbook printing presses $500 Depreciation on the automobiles
used by sales representatives $4,200 Fire insurance on factory building $2,000 Shipping
costs on textbooks sold $3,700 What is the total of the manufacturing overhead costs
above? (Points :2) $500 $2,500 $6,200 $6,700
Solvents and cleaners used by the custodians to clean
the textbook printing presses..................................
Fire insurance on factory building................................
Total..............................................................................
18. The information below relates to Derby Manufacturing Company's operations for a
recent month. (Assume that all raw materials are direct materials.): Purchases of raw
materials $91,000 Direct labor cost $122,000 Selling costs (total) $42,000 Administrative
costs (total) $56,000 Manufacturing overhead costs (total) $340,000 Raw materials
inventory, beginning $22,000 Work in process inventory, beginning $27,000 Finished
goods inventory, beginning $42,000 Raw materials inventory, ending $7,000 Work in
process inventory, ending $35,000 Finished goods inventory, ending $15,000 What was
Derby's cost of goods manufactured for the month? (Points :2) $545,000 $560,000
$568,000 $587,000
Derby Manufacturing Company
Schedule of Cost of Goods Manufactured
Direct materials:
Beginning raw materials inventory.................
$ 22,000
Add: Purchases of raw materials....................
91,000

Raw materials available for use......................


Deduct: Ending raw materials inventory........
Raw materials used in production...................
Direct labor.........................................................
Manufacturing overhead.....................................
Total manufacturing costs...................................
Add: Beginning work in process inventory........

113,000
7,000

Deduct: Ending work in process inventory........


Cost of goods manufactured...............................

$106,000
122,000
340,000
568,000
27,000
595,000
35,000
$560,000

19. Consider the following costs incurred in a recent period: Direct materials $33,000
Depreciation on factory equipment $12,000 Factory janitor's salary $23,000 Direct labor
$28,000 Utilities for factory $9,000 Selling expense $16,000 Production supervisor's
salary $34,000 Administrative expenses $21,000 What was the total amount of the period
costs listed above for the period? (Points :2) $78,000 $71,000 $46,000 $37,000
Selling expenses......................................... $16,000
Administrative expenses............................ 21,000
Total........................................................... $37,000
20. The following data are for a recent period's operations: Beginning finished goods
inventory $150,475 Ending finished goods inventory $145,750 Sales $400,000 Gross
margin $120,000 The cost of goods manufactured was: (Points :2) $115,275 $284,725
$275,275 $124,725
Sales Cost of goods sold = Gross margin
$400,000 Cost of goods sold = $120,000
Cost of goods sold = $280,000
Beginning finished
Cost of goods
Ending finished
+

=
goods inventory
manufactured
goods inventory
Cost of goods
$150,475
+

$145,750
=
manufactured
Cost of goods manufactured = $275,275

Cost of goods
sold
$280,000