Exam 2: Cost Terms,concepts,and Classifications

The following data (in thousands of dollars) have been taken from the accounting records of Karlana Corporation for the year just ended. Sales \ 910 Raw materials inventory, beginning \ 80 Raw materials inventory, ending \ 20 Purchases of raw materials \ 100 Direct labour \ 130 Manufacturing overhead \ 200 Administrative expenses \ 160 Selling expenses \ 140 Work-in-process inventory, beginning \ 40 Work-in-process inventory, ending \ 10 Finished goods inventory, beginning \ 130 Finished goods inventory, ending \ 150 -What was the cost of goods manufactured (finished)for the year (in thousands of dollars)?

Micro Computer Company has set up a toll-free telephone line for customer inquiries regarding computer hardware produced by the company.How would the cost of this toll-free line be classified?

Within the relevant range,what is the difference between variable costs and fixed costs?

Which one of the following costs should NOT be considered a direct cost of serving a particular customer who orders a customized personal computer by phone directly from the manufacturer?

Last month,a manufacturing company had the following operating results: Beginning finished goods inventory \ 74,000 Ending finished goods inventory \ 73,000 Sales \ 464,000 Gross margin \ 52,000 What was the cost of goods manufactured for the month?

The following costs should be considered by a law firm to be indirect costs of defending a particular client in court: rent on the law firm's offices,the law firm's receptionist's wages,the costs of heating the law firm's offices,and the depreciation on the personal computer in the office of the attorney who has been assigned the client.

Which of the following statements regarding variable cost is true?

The following data (in thousands of dollars) have been taken from the accounting records of Karlana Corporation for the year just ended. Sales \ 910 Raw materials inventory, beginning \ 80 Raw materials inventory, ending \ 20 Purchases of raw materials \ 100 Direct labour \ 130 Manufacturing overhead \ 200 Administrative expenses \ 160 Selling expenses \ 140 Work-in-process inventory, beginning \ 40 Work-in-process inventory, ending \ 10 Finished goods inventory, beginning \ 130 Finished goods inventory, ending \ 150 -What was the cost of the raw materials used in production (in thousands of dollars)during the year?

The following inventory and cost data for the just completed year are taken from the accounting records of Sankar Company: Inventories Increase in raw materials \ 4,000 Increase in work in process 30,000 Decrease in finished goods 90,000 Costs incurred Advertising expense \ 200,000 Direct labour cost 180,000 Purchases of raw materials 264,000 Rent, factory building 60,000 Indirect factory labour 112,600 Sales commissions 70,000 Utilities, factory 18,000 Maintenance, factory equipment 48,000 Supplies, factory 1,400 Depreciation, office equipment 16,000 Depreciation, factory equipment 80,000 Required: (a.)Calculate the cost of goods manufactured. (b.)Calculate the cost of goods sold

During the month of June,Reardon Company incurs $17,000 of direct labour and $8,500 of manufacturing overhead,and purchases $15,000 of raw materials.Between the beginning and the end of the month,the raw-materials inventory increases by $2,000,the finished goods inventory increases by $1,500,and the work-in-process inventory decreases by $3,000.What is the cost of goods manufactured?

The following data (in thousands of dollars) have been taken from the accounting records of Karlana Corporation for the year just ended. Sales \ 910 Raw materials inventory, beginning \ 80 Raw materials inventory, ending \ 20 Purchases of raw materials \ 100 Direct labour \ 130 Manufacturing overhead \ 200 Administrative expenses \ 160 Selling expenses \ 140 Work-in-process inventory, beginning \ 40 Work-in-process inventory, ending \ 10 Finished goods inventory, beginning \ 130 Finished goods inventory, ending \ 150 -What was the net income (in thousands of dollars)for the year?

As goods are completed their cost is transferred from the Work in Process account to the Finished Goods account where they await sale to customer.

The following data (in thousands of dollars) have been taken from the accounting records of Karlist Corporation for the just completed year. Sales \ 800 Raw materials inventory, beginning \ 60 Raw materials inventory, ending \ 70 Purchases of raw materials \ 180 Direct labour \ 100 Manufacturing overhead \ 190 Administrative expenses \ 110 Selling expenses \ 150 Work-in-process inventory, beginning \ 70 Work-in-process inventory, ending \ 80 Finished goods inventory, beginning \ 120 Finished goods inventory, ending \ 160 -What was the cost of goods manufactured (finished)for the year (in thousands of dollars)?

The following information is from Marchant Manufacturing Co.for September: Direct materials used in production \ 95,000 Direct labour \ 67,000 Total manufacturing cost \ 234,000 Raw materials inventory, Sept. 1 \ 24,000 Work-in-process inventory, Sept. 1 \ 6,000 Finished goods inventory, Sept. 1 \ 101,000 Purchases of raw materials \ 102,000 Cost of goods manufactured \ 233,000 Administrative expense \ 41,000 Selling expense \ 56,000 Sales \ 344,000 Gross margin \ 127,000 Net income \ 30,000 Required: (a.)Compute the cost of goods sold. (b.)Compute the balance in finished goods inventory at September 30. (c.)Compute the balance in work-in-process inventory at September 30. (d.)Compute the balance in raw materials inventory at September 30. (e.)Compute the total manufacturing overhead. (Hint: The easiest method of solving this problem is to sketch out the income statement and the schedule of cost of goods manufactured,enter the given amounts,and then enter the unknowns as plug figures.)

Boardman Company reported the following data for the month of January: Inventories: / Raw materials \ 32,000 \ 31,000 Work in process \ 18,000 \ 12,000 Finished goods \ 30,000 \ 35,000 Additional information: Sales revenue \ 210,000 Direct labour costs \ 40,000 Manufacturing overhead costs \ 70,000 Selling expenses \ 25,000 Administrative expenses \ 35,000 -Assuming that cost of goods sold for Boardman Company for January was $140,000,what was the cost of goods manufactured for the month?

Use the following information to determine the gross margin for Pacific States Manufacturing for the year just ended (all amounts are in thousands of dollars): Sales \ 31,800 Purchases of direct materials \ 7,000 Direct labour \ 5,000 Work in process, 1/1 \ 800 Work in process, 1/31 \ 3,000 Finished goods inventory, 1/1 \ 4,000 Finished goods inventory, 1/31 \ 5,300 Accounts payable, 1/1 \ 1,700 Accounts payable, 1/31 \ 1,500 Direct materials inventory, 1/1 \ 6,000 Direct materials inventory, 1/31 \ 1,000 Indirect labour \ 600 Indirect materials used \ 500 Utilities expense, factory \ 1,900 Depreciation on factory equipment \ 3,500

All costs incurred in a merchandising firm are considered to be period costs.

The following data (in thousands of dollars)have been taken from the accounting records of Larner Corporation for the year just completed: Sales \ 870 Purchases of raw materials* \ 110 Direct labour \ 130 Manufacturing overhead \ 200 Administrative expenses \ 160 Selling expenses \ 140 Raw materials inventory, beginning* \ 30 Raw materials inventory, ending* \ 60 Work in process inventory, beginning \ 50 Work in process inventory, ending \ 10 Finished goods inventory, beginning \ 150 Finished goods inventory, ending \ 140 Required: (a.)Prepare a schedule of cost of goods manufactured in good form. (b.)Compute the cost of goods sold. (c.)Using data from your answers above as needed,prepare an income statement in good form.

The gross margin for Cushing Company for the first quarter of last year was $325,000 when sales were $700,000.The beginning inventory of finished goods was $60,000,and the ending inventory of finished goods was $85,000.What was the cost of goods manufactured for the first quarter?

For a lamp manufacturing company,the cost of the insurance on its vehicles that deliver lamps to customers is best described as a: