Exam 2: Cost Terminology and Cost Behaviors

The following miscellaneous data has been collected for Sawyers Manufacturing Company for the most recent year-end:
inventories Begining   Ending

Raw material    $50,000     $55,000

Work in process    40,000      45,000
Finished goods 60,000     50,000
Costs recorded during the year:
Purchases of raw material    $195,000
Direct labor   $150,000
Cost of goods sold    595,000
Required: Prepare statements of cost of goods manufactured and cost of goods sold showing how all unknown amounts were determined.

inventories	Begining	Ending
Raw material	$50,000	$55,000
Work in process	40,000	45,000
Finished goods	60,000	50,000
Costs recorded during the year:
Purchases of raw material	$195,000
Direct labor	$150,000
Cost of goods sold	595,000

(Essay)

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(82)

Question 21

From the following information for the Bentwater Company,compute prime costs and conversion costs for the current period.
inventories Begining   Ending

Raw material    $9,900     $7,600

Work in process    44,500      37,800
Finished goods 36,580     61,300
Raw material purchased during the period cost $40,800;overhead incurred and paid or accrued for the period was $21,750;and 23,600 direct labor hours were incurred at a rate of $13.75 per hour.

inventories	Begining	Ending
Raw material	$9,900	$7,600
Work in process	44,500	37,800
Finished goods	36,580	61,300

(Essay)

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Question 22

Prime cost consists of direct material direct labor overhead

(Multiple Choice)

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Question 23

What are three reasons that overhead must be allocated to products?

(Essay)

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Question 24

The term "relevant range" as used in cost accounting means the range over which

(Multiple Choice)

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Question 25

Which of the following would generally be considered a fixed factory overhead cost? Straight-line Factory Units-of-production depreciation insurance depreciation

(Multiple Choice)

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Question 26

Costs that cannot be conveniently traced to a cost object are known as ____________________ costs.

(Short Answer)

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Question 27

Denson Company manufactures computer stands.What is the beginning balance of Finished Goods Inventory if Cost of Goods Sold is $107,000;the ending balance of Finished Goods Inventory is $20,000;and Cost of Goods Manufactured is $50,000 less than Cost of Goods Sold?

(Multiple Choice)

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Question 28

When the number of units manufactured increases,the most significant change in unit cost will be reflected as a(n)

(Multiple Choice)

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Question 29

In an actual cost system,factory overhead is applied to Work in Process using a predetermined overhead rate.

(True/False)

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Question 30

The assumed range of activity that reflects the company's normal operating range is referred to as the ______________________________.

(Short Answer)

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Question 31

Bridges Corporation The following information has been taken from the cost records of Bridges Corporation for the past year: Raw material used in production                                                $336 Total manufacturing costs charged to production during            711 the year (includes direct material, direct labor, and overhead equal to 50% of direct labor cost) Cost of goods available for sale                                                  851 Selling and Administrative expenses                                           35
Inventories Begining   Ending

Raw material $80     $90

Work in process 85      25
Finished goods 80     105
Refer to Bridges Company.Direct labor cost charged to production during the year was

Inventories	Begining	Ending
Raw material	$80	$90
Work in process	85	25
Finished goods	80	105

(Multiple Choice)

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Question 32

Unexpired costs are reflected on the balance sheet.

(True/False)

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Question 33

In a normal cost system,factory overhead is applied to Work in Process using a predetermined overhead rate.

(True/False)

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Question 34

It is not necessary to prepare the Cost of Goods Manufactured statement prior to preparing the Cost of Goods Sold statement.

(True/False)

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Question 35

The portion of an asset that was consumed during a period is referred to an expired cost.

(True/False)

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Question 36

Costs incurred for monitoring or inspecting products are known as ____________________ costs.

(Short Answer)

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Question 37

Bridges Corporation The following information has been taken from the cost records of Bridges Corporation for the past year: Raw material used in production                                                $336 Total manufacturing costs charged to production during            711 the year (includes direct material, direct labor, and overhead equal to 50% of direct labor cost) Cost of goods available for sale                                                  851 Selling and Administrative expenses                                           35
Inventories Begining   Ending

Raw material $80     $90

Work in process 85      25
Finished goods 80     105
Refer to Bridges Company.Cost of Goods Manufactured was

Inventories	Begining	Ending
Raw material	$80	$90
Work in process	85	25
Finished goods	80	105

(Multiple Choice)

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(78)

Question 38

Costs that result from defective units,product returns,and complaints are referred to as ____________________ costs.

(Short Answer)

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Question 39

Hunnicutt Company is a construction company that builds greenhouses on special request.What is the proper classification of the carpenters' wages? Product Period Direct

(Multiple Choice)

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Question 40

Prime cost consists of direct material direct labor overhead

What are three reasons that overhead must be allocated to products?

The term "relevant range" as used in cost accounting means the range over which

Which of the following would generally be considered a fixed factory overhead cost? Straight-line Factory Units-of-production depreciation insurance depreciation

Costs that cannot be conveniently traced to a cost object are known as ____________________ costs.

Denson Company manufactures computer stands.What is the beginning balance of Finished Goods Inventory if Cost of Goods Sold is $107,000;the ending balance of Finished Goods Inventory is $20,000;and Cost of Goods Manufactured is $50,000 less than Cost of Goods Sold?

When the number of units manufactured increases,the most significant change in unit cost will be reflected as a(n)

In an actual cost system,factory overhead is applied to Work in Process using a predetermined overhead rate.

The assumed range of activity that reflects the company's normal operating range is referred to as the ______________________________.

Unexpired costs are reflected on the balance sheet.

In a normal cost system,factory overhead is applied to Work in Process using a predetermined overhead rate.

It is not necessary to prepare the Cost of Goods Manufactured statement prior to preparing the Cost of Goods Sold statement.

The portion of an asset that was consumed during a period is referred to an expired cost.

Costs incurred for monitoring or inspecting products are known as ____________________ costs.

Costs that result from defective units,product returns,and complaints are referred to as ____________________ costs.

Hunnicutt Company is a construction company that builds greenhouses on special request.What is the proper classification of the carpenters' wages? Product Period Direct

Introduction to Cost Accounting

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

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