Exam 2: An Introduction to Cost Terms and Purposes

Archambeau Products Company manufactures office furniture. Recently, the company decided to develop a formal cost accounting system and classify all costs into three categories. Categorize each of the following items as being appropriate for (1) cost tracing to the finished furniture, (2) cost allocation of an indirect manufacturing cost to the finished furniture, or (3) as a nonmanufacturing item.

Fixed costs depend on the ________.

The collection of cost data in an organized way, such as in various categories such as materials, labor, and manufacturing overhead, is called:

The American West Company manufactures several different products. Unit costs associated with Product ORD210 are as follows: What are the period costs per unit associated with Product ORD210?

Many government agency contracts exclude all but which of the following costs from reimbursement under cost-plus agreements?

Which of the following statements is true of direct costs?

Pederson Company reported the following: What is the manufacturing cost for the ending finished goods inventory?

Buildz Manufacturing currently produces 2,000 tables per month. The following per unit data for 2,000 tables apply for sales to regular customers: What is the per unit cost when producing 4,000 tables?

Within the relevant range, if there is a change in the level of the cost driver, then ________.

Managers use assigned cost information to make decisions and implement them.

Wages paid to machine operators on an assembly line are classified as a ________.

A company reported revenues of $382,000, cost of goods sold of $125,000, selling expenses of $16,000, and total operating costs of $74,000. Gross margin for the year is ________.

Manufacturing overhead costs are also referred to as ________.

A common classification of costs is by business function. Which of the following classifications is not by business function?

Which of the following is included in product cost for pricing and product-mix decisions?

Campus Apparels is a clothing maker. Unit costs associated with one of its products, Product DCT121, are as follows: What are the period costs per unit associated with Product DCT121?

Lucas Manufacturing has three cost objects that it uses to accumulate costs for its manufacturing plants. They are: Cost object #1:The physical buildings and equipment Cost object #2:The use of buildings and equipment Cost object #3:The availability and use of manufacturing labor The following manufacturing overhead cost categories are found in the accounting records: a.Depreciation on buildings and equipment b.Lubricants for machines c.Property insurance d.Supervisors salaries e.Fringe benefits f.Property taxes g.Utilities Required: Assign each of the above costs to the most appropriate cost object.

The smaller the amount of a cost the more likely it is economically feasible to trace it to a particular cost object.

Ralph Johnson is paid $30 an hour for straight-time and $40 an hour for overtime. One week he worked 39 hours, which included 9 hours of overtime, and 4 hours of idle time caused by material shortages. What is the direct labor cost incurred to the company?