BUS105 Exam Dumps - Managerial Accounting (SAYA-0009) Exam

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To compute the total current period manufacturing costs, we use the formula:

Total Manufacturing Costs =

Direct Materials Used + Direct Labor + Manufacturing Overhead Applied

Let’s break it down step-by-step.

Step 1: Compute Direct Materials Used

Direct Materials Used =

Beginning Raw Materials Inventory + Raw Materials Purchases − Ending Raw Materials Inventory

= $9,000 + $150,000 − $5,000 = $154,000

Step 2: Add Direct Labor and Manufacturing Overhead

Direct Labor = $50,000

Manufacturing Overhead Applied = $400,000

Step 3: Compute Total Manufacturing Costs

Total Manufacturing Costs =

Direct Materials Used + Direct Labor + Manufacturing Overhead

= $154,000 + $50,000 + $400,000 = $604,000

Note:

Selling and General & Administrative expenses are period costs and are excluded from the Schedule of Cost of Goods Manufactured.

Beginning and ending work-in-process inventories are used to compute the total cost of goods manufactured, not the total current period manufacturing costs.

Therefore:

Answer: B. $604,000

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Bethel Bakery uses multiple departments (blending, cutting, baking, decorating, packaging) to produce a standardized product—frosted sugar cookies—in a continuous, repetitive flow. This is a textbook example of a business that uses process costing.

According to Saylor Academy BUS105:

“Process costing is used when the production process is continuous, and the units of output are indistinguishable from each other. Separate work-in-process (WIP) accounts are typically maintained for each department.”

Let’s evaluate the options:

A. Job costing is used for customized or unique products (e.g., custom furniture).

B. Process costing is used for mass-produced items through multiple production departments.✅

C. Departmental costing refers to applying overhead by department, not necessarily tied to production cost method.

D. Activity-based costing focuses on cost allocation based on activities but does not define how WIP is tracked across departments.

Answer: B

Comprehensive and Detailed Explanation:

Let’s examine the correct formula to calculate standard cost for each component:

Standard Cost for Direct Materials = Standard Quantity × Standard Price

Standard Cost for Direct Labor = Standard Hours × Standard Rate

Standard Cost for Overhead = Standard Hours × Standard Rate

Reviewing the table:

Row 3 uses:Direct Materials → Standard Quantity × Standard PriceDirect Labor → Standard Hours × Standard RateOverhead → Standard Hours × Standard Rate

This matches the standard costing formulas.

Answer: C

The Payback Period method calculates how long it will take to recover the original investment but does not consider the time value of money (i.e., it treats all cash inflows as equally valuable regardless of when they are received).

According to Saylor Academy BUS105:

“The payback method ignores the time value of money and therefore is not as reliable as methods such as NPV or IRR.”

Comprehensive and Detailed Explanation:

Managerial accounting focuses on internal decision-making tools, such as budgeting, forecasting, and performance evaluation. A capital budget is a tool for planning long-term investments and is a key example of managerial accounting.

The other options (balance sheet, cash flow, liabilities) are financial accounting tools used for external reporting.

Answer: A

Cash collections and payments for purchases are cash inflows and outflows that must be captured in the Cash Budget. The Cash Budget is a critical component of the master budget and is used to estimate the cash position of the company at various points during the budgeting period. This includes timing of cash collections from sales (accounts receivable) and cash disbursements for purchases, wages, overhead, and other expenses.

As per Saylor Academy BUS105: Managerial Accounting, Unit 9 – How Do Managers Use Budgets?, Section 9.3: Preparing a Cash Budget:

“The cash budget shows the company's expected cash inflows and outflows over a period of time. This includes all cash collected from sales and all payments made for expenses, purchases of direct materials, and other disbursements.”

Therefore:

Option A (Cash budget) is correct.

Option B (Budgeted income statement) records revenues and expenses, not timing of actual cash flows.

Option C (Manufacturing overhead budget) focuses on estimating overhead costs but not cash flow.

Option D (Direct materials purchases budget) estimates how much material to buy but does not directly reflect actual payments.

Responsibility centers are classified as:

Cost Center (evaluated on cost control)

Revenue Center (evaluated on revenue generation)

Profit Center (evaluated on revenues and costs)

Investment Center (evaluated on profits and asset usage/ROI)

As a restaurant manager, you are typically managing both revenues and costs, making your unit a Profit Center.

From Saylor Academy BUS105 – Unit 11.1: Measuring and Evaluating Performance:

“Profit centers are responsible for revenues and costs. Managers are evaluated on their ability to generate profit by increasing revenues and/or reducing costs.”

Therefore:

Answer: C

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