A) include only the prime costs of manufacturing a product. B) include only the conversion costs of providing a service. C) exclude fixed manufacturing costs. D) are regarded as assets until the units are sold. A) include only the prime costs of manufacturing a product. B) include only the conversion costs of providing a service. C) exclude fixed manufacturing costs. D) are regarded as assets until the units are sold.

The estimated unit costs for a company to produce and sell a product at a level of 12,000 units per month are as follows: \[\begin{array} { l r } & \text { Estimated } \\ \text { Cost Item } & \text { Unit Cost } \\ \text { Direct material } & \$3 2 \\ \text { Direct labor } & 20 \\ \text { Variable manfacturing overhead } & 15 \\ \text { Fixed manfacturing overhead } & 6 \\ \text { Variable selling expenses } & 3 \\ \text { Fixed selling expenses } & 4 \end{array}\] - What are the estimated conversion costs per unit?

A) $35 B) $41 C) $44 D) $48 A) $35 B) $41 C) $44 D) $48

The following cost data for the month of May were taken from the records of the Terrence Manufacturing Company: (CIA adapted) \[\begin{array} { l r } \text { Depreciation on factory equipment } & 1,000 \\ \text { Depreciation on sales office } & 500 \\ \text { Advertising } & 7,000 \\ \text { Wages of production workers } & 28,000 \\ \text { Raw materials used } & 47,000 \\ \text { Sales salaries and cornrnissions } & 10,000 \\ \text { Factory rent } & 2,000 \\ \text { Factory insurance } & 500 \\ \text { Materials handling } & 1,500 \\ \text { Adrnirnistrative salaries } & 2,000 \end{array}\] Based upon this information, the manufacturing cost incurred during the month was:

A) $78,500. B) $80,000. C) $80,500. D) $83,000. A) $78,500. B) $80,000. C) $80,500. D) $83,000.

Information from the records of the Shawnee Production Company for the month of January is as follows: $\begin{array}{lr} \text {Purchases of direct materials}&\$18,000\\ \text {Indirect labor}&5,000\\ \text { Direct labor } & 10,400 \\ \text { Depreciation on factory machinery } & 3,000 \\ \text { Sales } & 55,300 \\ \text { Selling and administrative expenses } & 6,300 \\ \text { Rent on factory building } & 7,000 \end{array}$ $\begin{array}{lrr} \text { Inventories:}&\text { January 1}&\text { January 31}\\ \text { Direct materials } & \$ 8,000 & \$ 8,700 \\ \text { Work-in-process } & 2,100 & 3,200 \\ \text { Finished goods } & 5,000 & 5,700 \end{array}$ Required: (a) Prepare a statement of cost of goods manufactured and sold for the month of January. (b) Prepare a gross margin income statement for the month of January.

(a) @#IMG-DLM& (b) \[\begin{array} { l r r } & \

Vegas Company has the following unit costs: $\begin{array}{llr} \text { Variable manufacturing overhead } &\$25\\ \text { Direct materials } &20\\ \text { Direct labor} &19\\ \text { Fixed manufacturing overhead} &12\\ \text { Fixed marketing and administrative }&7 \end{array}$ - Vegas produced and sold 10,000 units. If the product sells for $100, what is the operating profit using a contribution margin income statement?

A) $170,000 B) $240,000 C) $290,000 D) $360,000 A) $170,000 B) $240,000 C) $290,000 D) $360,000

Exam 2: Cost Concepts and Behavior

The following data relates to the Sunshine Company: Direct Materials Inventory, Beginning \4 0 Direct Materials Inventory, Ending 50 Direct Materials Purchases 210 Direct Labor 350 Finished Goods Inventory, Beginning 100 Finished Goods Inventory, Ending 95 Factory overhead 153 Work-in-Process Inventory, Beginning 65 Work-in-Process Inventory, Ending 80 Required: (a) Compute the direct materials used during the year. (b) Compute the cost of goods manufactured during the year. (c) Compute the cost of goods sold during the year.

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Question 61

How would property taxes paid on a factory building be classified in a manufacturing company?

(Multiple Choice)

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Question 62

Fixed costs per unit change inversely with changes in the volume of activity.

(True/False)

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Question 63

The following information is available for the Tenor Music Store for the fiscal year ended December 31. Ending inventory \1 00,100 Transportation-in costs \8 ,900 Purchase discounts \1 5,000 Beginning inventory \7 9,000 Merchandise cost \4 50,000 Purchase returns and allowances \6 ,200 Sales revenue \8 00,000 Sales discounts \1 2,500 Required: (a) Prepare a cost of goods sold statement for Tenor Music Store. (b) Compute the gross margin for the fiscal year ended December 31.

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Question 64

Inventoriable costs:

(Multiple Choice)

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Question 65

The corporate controller's salary would be considered a(n):

(Multiple Choice)

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Question 66

Variable marketing and administrative costs are included in determining full absorption costs.

(True/False)

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Question 67

Only direct costs can be classified as product costs; indirect costs are classified as period costs.

(True/False)

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Question 68

The estimated unit costs for a company to produce and sell a product at a level of 12,000 units per month are as follows: Estimated Cost Item Unit Cost Direct material \3 2 Direct labor 20 Variable manfacturing overhead 15 Fixed manfacturing overhead 6 Variable selling expenses 3 Fixed selling expenses 4 - What are the estimated conversion costs per unit?

(Multiple Choice)

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Question 69

The difference between variable costs and fixed costs is (CMA adapted)

(Multiple Choice)

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Question 70

The following cost data for the month of May were taken from the records of the Terrence Manufacturing Company: (CIA adapted) Depreciation on factory equipment 1,000 Depreciation on sales office 500 Advertising 7,000 Wages of production workers 28,000 Raw materials used 47,000 Sales salaries and cornrnissions 10,000 Factory rent 2,000 Factory insurance 500 Materials handling 1,500 Adrnirnistrative salaries 2,000 Based upon this information, the manufacturing cost incurred during the month was:

(Multiple Choice)

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Question 71

Explain the difference between cost of goods manufactured and cost of goods sold.

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Question 72

Explain the difference between an outlay cost, an expense, and an opportunity cost.

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Question 73

Information from the records of the Shawnee Production Company for the month of January is as follows: Purchases of direct materials \1 8,000 Indirect labor 5,000 Direct labor 10,400 Depreciation on factory machinery 3,000 Sales 55,300 Selling and administrative expenses 6,300 Rent on factory building 7,000 Inventories: January 1 January 31 Direct materials \ 8,000 \ 8,700 Work-in-process 2,100 3,200 Finished goods 5,000 5,700 Required: (a) Prepare a statement of cost of goods manufactured and sold for the month of January. (b) Prepare a gross margin income statement for the month of January.

(Essay)

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Question 74

A manufacturing company has provided the following data for the month of March: Inventories: Begirning Ending Raw materials \ 36,000 \ 24,000 Finished goods \ 57,000 \ 28,000 Raw materials purchased during March totaled $69,000 and the cost of goods manufactured totaled $146,000. Required: (a) What was the cost of raw materials used in production during March? Show your work. (b) What was the cost of goods sold for March? Show your work.

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Question 75

Prime cost consists of direct materials combined with:

(Multiple Choice)

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Question 76

Total work-in-process during the period is the sum of the beginning work-in-process inventory and the total manufacturing costs incurred during the period.

(True/False)

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Question 77

Vegas Company has the following unit costs: Variable manufacturing overhead \2 5 Direct materials 20 Direct labor 19 Fixed manufacturing overhead 12 Fixed marketing and administrative 7 - Vegas produced and sold 10,000 units. If the product sells for $100, what is the operating profit using a contribution margin income statement?

(Multiple Choice)

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Question 78

The following information is available for the Weston Consulting Company for the fiscal year ended December 31. Gross margin \ 170,000 Operating profit \ 65,500 Reveruses \ 809,000 Income tax rate 34\% Required: (a) Compute the cost of services sold. (b) Compute the total marketing and administrative costs. (c) Compute net income.

(Essay)

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Question 79

The first step in determining whether a cost is direct or indirect is to specify the cost allocation rule.

(True/False)

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Question 80

How would property taxes paid on a factory building be classified in a manufacturing company?

Fixed costs per unit change inversely with changes in the volume of activity.

Inventoriable costs:

The corporate controller's salary would be considered a(n):

Variable marketing and administrative costs are included in determining full absorption costs.

Only direct costs can be classified as product costs; indirect costs are classified as period costs.

The difference between variable costs and fixed costs is (CMA adapted)

Explain the difference between cost of goods manufactured and cost of goods sold.

Explain the difference between an outlay cost, an expense, and an opportunity cost.

Prime cost consists of direct materials combined with:

Total work-in-process during the period is the sum of the beginning work-in-process inventory and the total manufacturing costs incurred during the period.

The first step in determining whether a cost is direct or indirect is to specify the cost allocation rule.

Cost Accounting: Information for Decision Making

Fundamentals of Cost-Volume-Profit Analysis

Fundamentals of Cost Analysis for Decision Making

Cost Estimation

Fundamentals of Product and Service Costing

Job Costing

Process Costing

Activity-Based Costing

Fundamentals of Cost Management

Service Department and Joint Cost Allocation

Fundamentals of Management Control Systems

Planning and Budgeting

Business Unit Performance Measurement

Transfer Pricing

Fundamentals of Variance Analysis

Additional Topics in Variance Analysis

Performance Measurement to Support Business Strategy

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