Exam 2: An Introduction to Cost Terms and Purposes

A fixed cost remains unchanged in total for a given time period, despite wide changes in the related level of total activity or volume of output produced.

Millworks Company manufactured 100,000 units in 2018 and reported the following costs: Sandpaper$ 32,000Leasing costs-plant$ 384,000 Materials handling320,000Depreciation-equipment224,000 Coolants & lubricants22,400Property taxes-equipment32,000 Indirect manufacturing labor275,200Fire insurance-equipment16,000 Direct manufacturing labor2,176,000Direct material purchases3,140,000 Direct materials, 1/1/18348,000Direct materials, 12/31/18280,000 Finished goods, 1/1/18672,000Sales revenue12,800,000 Finished goods, 12/31/181,280,000Sales commissions640,000 Work-in-process, 1/1/1896,000Sales salaries576,000 Work-in-process, 12/31/1864,000Advertising costs480,000 Administration costs800,000 Required: a.What is the amount of direct materials used during 2018? b.What manufacturing costs were added to WIP during 2018? c.What is cost of goods manufactured for 2018? d.What is cost of goods sold for 2018?

The only type of inventory that Macy's, a major U.S. department store chain would report on its balance sheet is:

Product costs for financial statements are:

Wood used to manufacture chairs is considered a direct variable cost when the cost object is the chair.

For a manufacturing-sector company, the cost of factory depreciation is classified as a ________.

For last year, Watson Limited reported revenues of $420,000, cost of goods sold of $118,000, cost of goods manufactured of $105,000, and total operating costs of $60,000. Operating income for that year was ________.

Merchandising companies purchase products and sell them to customers without changing their basic form.

Rework labor time is considered an overhead cost and not a direct labor cost.

Product costs used for government contracts generally include ________.

Designing, marketing, customer services, research and development expenses are all examples of operating costs.

When should an overtime premium of direct manufacturing labor be considered an indirect manufacturing cost? A direct manufacturing cost?

Inventoriable costs are expensed on the income statement ________.

Prime costs include ________.

The following information pertains to Alleigh's Mannequins: What is the amount of gross margin?

Puritan Apparels is a clothing retailer. Unit costs associated with one of its products, Product AHF 130, are as follows: What are the direct variable manufacturing costs per unit associated with Product AHF 130?

The balance sheet of a manufacturing-sector companies would report ________.

The following information pertains to the Ruby Corp: What is cost of goods sold?

Manufacturing overhead costs in an automobile manufacturing plant most likely include ________.

Atlas Manufacturing produces a unique valve, and has the capacity to produce 50,000 valves annually. Currently Atlas produces 40,000 valves and is thinking about increasing production to 45,000 valves next year. What is the most likely behavior of total manufacturing costs and unit manufacturing costs given this change?