Exam 2: Product Costing: Manufacturing Processes, cost Terminology and Cost Flows

Manufacturing overhead includes:

Which of the following statements is true regarding period costs?

Nate’s Novelties, Inc. has the following information available for July: Raw materials inventory Work-in-process inventory Finished goods inventory Raw materials purchased Direct labour costs Overhead costs \ 12000 \ 9000 35000 20000 20000 44000 \ 25000 55000 35000 -Cost of goods manufactured for July is:

Michael’s Manufacturing, Inc. has the following information available for the month of July: Raw materials inventory Work-in-process inventory Finished goods inventory Raw materials purchased Direct labour costs Overhead costs \ 50000 \ 62000 80000 55000 24000 35000 \ 120000 60000 45000 -Raw materials used for July is:

Identify with an 'X' the following costs as either a manufacturing (product)or non-manufacturing (period)cost.If it is a manufacturing cost,further identify it as either direct material (DM),direct labour (DL),or overhead (OH).

Which of the following statements accurately describes manufacturing cost flows in a just-in-time (JIT)environment?

When the cost of a product is matched with its sales price,the result (difference)is called:

Classify each of the following as either a direct material (DM),indirect material (IM),or period cost (P). a.Wood used to build custom bookshelves b.Sandpaper,glue,and nails used to build customer bookshelves c.Paper supplies used in the administrative offices d.Computer chips used in computer e.Cleaning supplies used in the factory

Hillsborough Street Manufacturing Inc. incurred the following costs in 2009: Direct materials used \ 37000 Direct labour costs 45000 Factory rent and utilities 18000 Factory equipment depreciation 10000 Marketing expenses 3000 Administrative expenses 9000 50 000 units were produced during the year out of which 40 000 units were sold for $10 each. There was no beginning or ending raw materials or work-in-process inventory. -What is the product cost per unit?

Which of the following statements about manufacturing in a traditional environment is true?

Briefly describe the difference between a manufacturing and a non-manufacturing cost.

Hudson Inc. has the following information available for September: Raw materials Work-in-process Finished goods Raw materials purchased Direct labour costs Manufacturing overhead costs Administrative costs Marketing costs 8000 \ 5000 30000 40000 7000 3000 25000 70000 30000 12000 6000 -In a traditional manufacturing environment,as the cost of goods sold account increases,which account is most likely decreasing?

Identify some of the benefits and risks of a lean production and just-in-time (JIT)environment.

Hillsborough Street Manufacturing Inc. incurred the following costs in 2009: Direct materials used \ 37000 Direct labour costs 45000 Factory rent and utilities 18000 Factory equipment depreciation 10000 Marketing expenses 3000 Administrative expenses 9000 50 000 units were produced during the year out of which 40 000 units were sold for $10 each. There was no beginning or ending raw materials or work-in-process inventory. -What is cost of goods sold for the year?

Which of the following is a characteristic of a lean production and just-in-time (JIT)manufacturing environment but not of a traditional manufacturing environment?

Hudson Inc. has the following information available for September: Raw materials Work-in-process Finished goods Raw materials purchased Direct labour costs Manufacturing overhead costs Administrative costs Marketing costs 8000 \ 5000 30000 40000 7000 3000 25000 70000 30000 12000 6000 -Cost of goods sold for September is:

Materials that can be directly traced to a particular product and become an integral part of the finished product are called:

Jones Manufacturing Inc. incurred the following costs in November: Direct labour \ 50000 Advertising costs \ 33000 Indirect labour 20000 Factory rent 10000 Administrative salaries 25000 Factory depreciation 6000 Direct materials purchased 23000 Administrative rent 5000 Indirect materials used 4000 Administrative depreciation 7000 In addition, the following information is also available: Raw materials Work-in-process Finished goods Number of units produced Number of units sold (sales price of \ 25 per unit) \ 5000 \ 8000 60000 55000 17250 9200 20000 units 21400 units -The product cost per unit in November is:

In 2009 Bradshaw Inc.incurred $40 000 of manufacturing overhead costs which will be paid for in 2010.Which of the following would be the correct journal entry to record this transaction? a. Cost of goods sold 40000 Accounts payable 40000 b. Inventory 40000 Accounts payable 40000 c. Overhead expenses 40000 Accounts payable 40000 d. Work-in-process inventory 40000 Accounts payable 40000

Chancellor Industries,a manufacturing company,prepays its insurance coverage for a two-year period.The premium for two-year's worth of coverage is $14 400 and is paid at the beginning of the first year.Two-thirds of the premium relates to factory operations and one-third relates to selling and administrative activities. The amount of premium that should be recorded as a product cost for the first year is: