Accounting Records

Accounting Records


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1.  Ogleby Inc.’s accounting records reflect the following inventories:


Dec.31, 2012                   Dec.31, 2013

Raw materials inventory           $120,000       $ 96,000

Work in process inventory        156,000        174,000

Finished goods inventory          150,000       138,000


During 2013, Ogleby purchased $840,000 of raw materials, incurred direct labor costs of $150,000, and incurred manufacturing overhead totaling $192,000.


How much is total manufacturing costs incurred during 2013 for Ogleby?







2.  Using $2,500,000 as the total manufacturing costs, compute the cost of goods manufactured using the following information.


Raw materials inventory, January 1             $ 20,000

Raw materials inventory, December 31    40,000

Work in process, January 1                 18,000

Work in process, December 31         12,000

Finished goods, January 1                40,000

Finished goods, December 31         32,000

Raw materials purchases             1,400,000

Direct labor                             560,000

Factory utilities                            150,000

Indirect labor                             50,000

Factory depreciation                 400,000

Operating expenses                 420,000







3.  Dolan Company’s accounting records reflect the following inventories:


Dec.31, 2013               Dec.31, 2012

Raw materials inventory             $310,000                     $260,000

Work in process inventory           300,000                       160,000

Finished goods inventory            190,000                       150,000


During 2013, $600,000 of raw materials were purchased, direct labor costs amounted to $500,000, and manufacturing overhead incurred was $480,000.  Dolan Company’s total manufacturing costs incurred in 2013 amounted to







4.  Cost of goods manufactured in a manufacturing company is analogous to


cost of goods purchased in a merchandising company.

ending inventory in a merchandising company.

beginning inventory in a merchandising company.

cost of goods available for sale in a merchandising company.


5.  Edmiston Company reported the following year-end information: beginning work in process inventory, $80,000; cost of goods manufactured, $780,000; beginning finished goods inventory, $50,000; ending work in process inventory, $70,000; and ending finished goods inventory, $40,000. How much is Edmiston’s cost of goods sold for the year?







6. Gammil Company has beginning and ending raw materials inventories of $96,000 and $120,000, respectively. If direct materials used were $440,000, what was the cost of raw materials purchased?







7. Which of the following statements about internal reports is not true?


The content of internal reports may extend beyond the double-entry accounting system.

Most internal reports are summarized rather than detailed.

Internal reports may show all amounts at market values.

Internal reports may discuss prospective events.


8. Which of the following is not a management function?







9. The subtotal, “Cost of goods manufactured” appears on


a merchandising company’s income statement.

a manufacturing company’s income statement.

both a manufacturing and a merchandising company’s income statement.

neither a merchandising nor a manufacturing company’s income statement.


10. Samson Company reported total manufacturing costs of $300,000, manufacturing overhead totaling $52,000, and direct materials totaling $64,000. How much is direct labor cost?





Cannot be determined from the information provided


11. What is work in process inventory generally described as?


Beginning stage production costs associated with labor costs dealing with bringing in raw materials from the shipping docks

Costs applicable to units that have been started in production but are only partially completed

Costs associated with the end stage of manufacturing that are almost always complete and ready for customers

Costs strictly associated with direct labor