Exam 2: Basic Managerial Accounting Concepts

The Butchart Company manufactures microwave ovens.Last year,the per-unit product cost was $56,the per-unit prime cost was $34,and the per-unit conversion cost was $42.Cost of goods sold for the year was $560,000 and the sale price per unit was $100.In addition,direct labor costs of $200,000 and selling and administrative expenses of $240,000 were incurred. Required:

Industries that provide intangible services do not normally have direct contact with their customers.

Direct costs are those costs that cannot be easily and accurately traced to a cost object.

Ross Company makes handbags.Last month direct materials (leather,thread,zippers,decorative accents)costing $76,000 were put into production.Ross had 30 workers,each worked 160 hours this month and each are paid $12 per hour.Overhead equaled $80,000 for the period.Ross Company produced 40,000 handbags as of the end of the month. Required: Calculate the total product cost for the month and calculate the cost of one handbag that was produced. Direct materials = 76,000 Direct labor = 57,600 (30 employees x 160 hrs.x $12 per hour) Overhead = 80,000 Total cost 213,600

Figure 2-3. Bartlow,Inc.had the following income statement for the month of May. Refer to Figure 2-3.What was the operating income percent?

Allocation means that an indirect cost is assigned to a cost object using a reasonable and convenient method.

Which of the following would be an example of a direct materials cost?

Non-manufacturing costs include

An income statement of a manufacturer

Assigning costs

What is the difference between total manufacturing costs and cost of goods manufactured?

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: Refer to Figure 2-5.If Econo Company sold 10,000 units during July and gross margin totaled $29,800,what was the sales price per unit?

Costs are incurred to produce future benefits.

Ashland Company,maker of kitchen cabinets,incurred the following costs during the current year: Required: Classify each cost as either a product or period cost.

A __________________ is any item such as a product,customer,department,project,geographic region,plan and so on,for which costs are measured and assigned.

See the following separate cases. Required: Solve for the missing amounts (A,B,C,D).

List and describe the three categories of manufacturing costs.

Direct labor is a(n)

The cost of the partially completed goods at the end of the period would be

Cashman Company supplied the following information for the month of December. Required: Solve for the following amounts assuming that Cashman Company's operating income in December was $44,100.