Exam 2: Cost Concepts

Green Company's costs for the month of August were as follows: direct materials, $27,000; direct labour, $34,000; sales salaries, $14,000; indirect labour, $10,000; indirect materials, $15,000; general corporate administrative cost, $12,000; taxes on manufacturing facility, $2,000; and rent on factory, $17,000. The beginning work in process inventory was $16,000 and the ending work in process inventory was $9,000. What was the cost of goods manufactured for the month?

Depreciation is always considered a product cost for external financial reporting purposes in a manufacturing firm.

Reference: The following data pertain to Harriman Company's operations during July: July 1 July 31 Raw materials inventory 0 \ 5,000 Work in process inventory ? 4,000 Finished goods inventory \ 12,000 ? Other data: Cost of goods manufactured \ 105,000 Raw materials used 40,000 Manufacturing overhead costs 20,000 Direct labour costs 39,000 Gross profit 100,000 Sales 210,000 -The ending finished goods inventory was?

Reference: The following data (in thousands of dollars) have been taken from the accounting records of Karlist Corporation for the just completed year. Sales \ 800 Raw materials inventory, beginning \ 60 Raw materials inventory, ending \ 70 Purchases of raw materials \ 180 Direct labour \ 100 Manufacturing overhead \ 190 Administrative expenses \ 110 Selling expenses \ 150 Work in process inventory, beginning \ 70 Work in process inventory, ending \ 80 Finished goods inventory, beginning \ 120 Finished goods inventory, ending \ 160 -The cost of goods sold for the year (in thousands of dollars)was:

An accounting course is taught in two classes per week for one hour and fifty minutes each. The classes are held in a building with 36 classrooms that are used for a variety of courses. The building has an advanced monitoring system which allows electricity costs to be determined for each classroom and for each course. If the cost object is the accounting course, which of the following is an indirect cost?

The Lyons Company's cost of goods manufactured was $120,000 when its sales were $360,000 and its gross margin was $220,000. If the ending inventory of finished goods was $30,000, the beginning inventory of finished goods must have been:

Reference: Charlie's Chocolate Factory manufactures chocolate bars and ships them directly to wholesalers and retailers across the country. The company has two product lines: milk chocolate bars and chocolate covered almonds. Classify the following company's expenses if the cost object is a single product line (either milk chocolate bars or chocolate covered almonds). -The cost of cocoa used in the factory.

The term differential cost refers to:

Reference: The following data (in thousands of dollars) have been taken from the accounting records of Karling Corporation for the just completed year. Sales \ 990 Raw materials inventory, beginning \ 40 Raw materials inventory, ending \ 70 Purchases of raw materials \ 120 Direct labour \ 200 Manufacturing overhead \ 230 Administrative expenses \ 150 Selling expenses \ 140 Work in process inventory, beginning \ 70 Work in process inventory, ending \ 50 Finished goods inventory, beginning \ 120 Finished goods inventory, ending \ 160 -The net income for the year (in thousands of dollars)was:

The following account balances has been extracted from Jimbob Co.'s general ledger: Direct materials used in production \ 200,000 Depreciation factory building \ 10,000 Depreciation factory equipment \ 50,000 Depreciation sales department automobiles \ 10,000 Direct wages factory employees \ 200,000 Sales department salaries and commissions \ 150,000 Factory manager's salary \ 50,000 Utility costs factory \ 50,000 Utility costs sales office \ 20,000. What was the total of nonmanufacturing costs?

Reference: Tech Computer manufactures computers in its plant located in Toronto and then ships the computers directly to distributors and retailers. The company's accountant has enlisted you to classify the following company's expenses: -Cost of a warehouse (i.e. used to store finished goods (computers)prior to selling them to the customer.

The inventory accounts reported on the balance sheet of a manufacturing company will differ from those of a merchandising company.

Micro Computer Company has set up a toll-free telephone line for customer inquiries regarding computer hardware produced by the company. The cost of this toll-free line would be classified as which of the following?

During January, the cost of goods manufactured was $93,000. The beginning finished goods inventory was $16,000 and the ending finished goods inventory was $20,000. What was the cost of goods sold for the month?

The following information was provided by Jimbob Co. for the year just ended: Cost of goods manufactured \ 500,000 Ending finished goods inventory \ 100,000 Sales \ 800,000 Gross margin \ 200,000 What was beginning finished goods inventory?

Manufacturing overhead combined with direct materials is known as conversion cost.

Mueller Company reported the following data for the year just ended: Raw materials used in production \ 800,000 Direct labour \ 700,000 Total overhead costs \ 900,000 Ending work in process inventory \ 400,000 Cost of goods manufactured \ 2,500,000 The beginning work in process inventory was:

Opportunity costs are always recorded as expenses in the accounts of an organization.

Haack Inc. is a merchandising company. Last month the company's cost of goods sold was $84,000. The company's beginning merchandise inventory was $20,000 and its ending merchandise inventory was $18,000. What was the total amount of the company's merchandise purchases for the month?

Reference: Frosting Corp. has provided the following relating to the most recent month (August 31, 2016) of operations, for their main product, cupcakes Baker's salaries 20,000 Finished goods inventory, beginning 18,000 Finished goods inventory, ending 20,000 General \& administrative expenses 20,000 Indirect materials 17,500 Production Supervisor, Salary 21,000 Purchases of raw materials 28,000 Raw materials inventory, ending 19,000 Raw materials inventory, beginning 18,000 Rent on production factory 19,000 Rent, retail store 18,000 Sales 243,000 Utilities on production factory 17,500 Utilities, retail store 17,000 Wages, retail staff 20,000 WIP inventory, beginning 19,500 WIP inventory, ending 21,500 -What was the total prime costs for the period?