Exam 2: Cost Concepts

Reference: Geneva Steel Corporation produces large sheets of heavy gauge steel. The company showed the following amounts relating to its production for the year just completed: Direct materials used in production \ 110,000 Direct labour costs for the year 55,000 Work in process, beginning 22,000 Finished goods, beginning 45,000 Cost of goods available for sale 288,000 Cost of goods sold 238,000 Work in process, ending 16,000 -Manufacturing overhead cost for the year was?

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). -Rent on the production factory.

Reference: Boardman Company reported the following data for the month of January: Inventories: 1/1 1/31 Raw materials \ 32,000 \ 31,000 Work in process \ 18,000 \ 12,000 Finished goods \ 30,000 \ 35,000 Additional information: Sales revenue \ 210,000 Direct labour costs 40,000 Manufacturing overhead costs 70,000 Selling expenses 25,000 Administrative expenses 35,000 -Boardman Company's total conversion cost for January was:

Delta Merchandising, Inc. has provided the following information for the year just ended: Net sales \ 128,500 Beginning inventory 24,000 Purchases 80,000 Gross margin 38,550 The ending inventory for the company at year end was:

Which of the following statements is true

Reference: The following data (in thousands of dollars) have been taken from the accounting records of Karlana Corporation for the just completed year. Sales \ 910 Raw materials inventory, beginning \ 80 Raw materials inventory, ending \ 20 Purchases of raw materials \ 100 Direct labour \ 130 Manufacturing overhead \ 200 Administrative expenses \ 160 Selling expenses \ 140 Work in process inventory, beginning \ 40 Work in process inventory, ending \ 10 Finished goods inventory, beginning \ 130 Finished goods inventory, ending \ 150 -The net income for the year (in thousands of dollars)was:

Jimbob Company has two business alternatives - A & B with different total annual costs as 72) set out below: Total annual costs: A B Advertising \ 32,000 \ 31,000 Other marketing costs \ 18,000 \ 12,000 Other expenses \ 30,000 \ 35,000 Additionally, if alternative B is chosen the business will have to use some space for its own purposes that are currently being rented to an outside business for $5,000 per year. What are the total differential costs between the two alternatives?

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 operating income for the period?

If the cost of goods sold is greater than the cost of goods manufactured, then:

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: -The hard drive installed in each computer.

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 cost of goods sold for the period?

Which of the following costs is often important in decision making, but is omitted from conventional accounting records?

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: -Annual subscription fee paid to computer magazine.

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 cost of goods manufactured for the year (in thousands of dollars)was:

Advertising costs are considered product costs for external financial reports since they are incurred in order to promote specific products.

Which of the following major activities of a business will result in product costs

Reference: Boardman Company reported the following data for the month of January: Inventories: 1/1 1/31 Raw materials \ 32,000 \ 31,000 Work in process \ 18,000 \ 12,000 Finished goods \ 30,000 \ 35,000 Additional information: Sales revenue \ 210,000 Direct labour costs 40,000 Manufacturing overhead costs 70,000 Selling expenses 25,000 Administrative expenses 35,000 -Assume that cost of goods sold for January was $124,000. The net income for January was:

On a per unit basis, a fixed cost varies inversely with the level of activity.

Reference: Boardman Company reported the following data for the month of January: Inventories: 1/1 1/31 Raw materials \ 32,000 \ 31,000 Work in process \ 18,000 \ 12,000 Finished goods \ 30,000 \ 35,000 Additional information: Sales revenue \ 210,000 Direct labour costs 40,000 Manufacturing overhead costs 70,000 Selling expenses 25,000 Administrative expenses 35,000 -If raw materials costing $35,000 were purchased during January, the total manufacturing costs for the month was?

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). -Almonds used in the chocolate covered almonds.