Exam 2: Basic Managerial Accounting Concepts

Figure 2-5.In July, Econo Company purchased materials costing $21,000 and incurred direct labor cost of $18,000. Overhead totaled $32,000 for the month. Information on inventories was as follows: July 1 July 31 Materials \ 6,200 \ 7,100 Work in process \ 700 \ 1,200 Finished goods \ 3,300 \ 2,700 -Refer to Figure 2-5. What was the cost of direct materials used in July?

Costs can be assigned to cost objects in only one way.

_____________________ is the way that a cost is linked to some cost object.

Describe the purpose of the three inventory accounts used by a manufacturer.

A variable cost is one that does not increase in total as output increase and does not decrease in total as output decreases.

As costs are used up in the production of revenues, they are said to expire. Expired costs are called expenses.

Select the appropriate classification for each of the items listed below. -Cost of conference for sales team

The revenue per unit is called cost.

Figure 2-2.Lonborg Co. had the following beginning and ending inventory balances for the year ended December 31, 2011: In addition, direct labor costs of $30,000 were incurred, overhead equaled $42,000, materials purchased were $27,000 and selling and administrative costs were $22,000. Lonborg Co. sold 25,000 units of product during the year at a sales price of $5.00 per unit. -Refer to Figure 2-2. What was the amount of cost of goods sold for the year?

Non-manufacturing costs include

Select the appropriate classification for each of the following costs. -Factory supervisor's salary

Talcum Inc. had materials inventory at July 1 of $12,000. The materials inventory at July 31 was $15,000 and the cost of direct materials used in production was $20,000. What was the cost of materials purchased during the month?

Figure 2-4.Junko Company makes financial calculators. During the year Junko manufactured 97,000 financial calculators. Finished goods inventory had the following units on hand: -Refer to Figure 2-4. If each financial calculator has a per-unit product cost of $112, what was the cost of goods sold last year?

Materials that become part of a product usually are classified as _______________.

Figure 2-5.In July, Econo Company purchased materials costing $21,000 and incurred direct labor cost of $18,000. Overhead totaled $32,000 for the month. Information on inventories was as follows: July 1 July 31 Materials \ 6,200 \ 7,100 Work in process \ 700 \ 1,200 Finished goods \ 3,300 \ 2,700 -Refer to Figure 2-5. What were the total manufacturing costs in July?

Cost is a dollar measure of the resources used to achieve a given benefit.

Materials in the raw materials account do not become direct materials

Assigning costs to cost objects

Select the appropriate classification of the output generated by each of the following industries. -CPA firm

The Bayou Company makes crab pots. During the current month, direct materials costing $126,000 were put into production. Direct labor of $78,000 was incurred and overhead equaled $84,000. Selling and administrative expenses totaled $66,000 for the month and the company manufactured 3,000 crab pots. Assume there was no beginning inventory and that 2,800 crab pots were sold. Required: