Exam 2: Cost Concepts and Behavior

The Work-in-Process Inventory of the Model Fabricating Corp. was $3,000 higher on December 31, 2019 than it was on January 1, 2019. This implies that in 2019:

The cost accountant for the Friendly Manufacturing Company has provided you with the following information for the month of July: Total Fixed Variable costs Per unit Costs Direct labor 27.50 Direct materials 84.75 Manufacturing overhead 14.25 \ 120,000 Marketing costs 5.30 50,000 Administrative costs 2.90 75,000 Selling price 210.00 Required: Assuming the company produced and sold 5,000 units, and there were no units in inventory on July 1, prepare the following income statements for the month of July: (a) Contribution margin income statement. (b) Gross margin income statement.

Which of the following is not a name for indirect resources?

Vegas Company has the following unit costs: Variable manufacturing overhead \2 5 Direct materials 20 Direct labor 19 Fixed manufacturing overhead 12 Fixed marketing and administrative 7 - Vegas produced and sold 10,000 units. If the product sells for $100, what is the gross margin?

In October, Youngstown Corporation had sales of $273,000, selling expenses of $26,000, and administrative expenses of $47,000. The cost of goods manufactured was $183,000. The beginning balance in the finished goods inventory account was $45,000 and the ending balance was $34,000. Required: Prepare an Income Statement in good form for October.

The following information is available for Barnes Company for the fiscal year ended December 31: Beginning finished goods inventory in units 0 Units produced 4,800 Units sold 4,000 Sales \4 00,000 Materials cost \9 6,000 Variable conversion cost used \4 8,000 Fixed manufacturing cost \7 2,000 Indirect operating costs (fixed) \8 0,000 - The absorption costing operating income is:

Zach Hartman has developed a new electronic device that he has decided to produce and market. The production facility will be in a nearby industrial park which Zach will rent for $4,000 per month. Utilities will cost $500 per month. He will use his personal computer, which he purchased for $2,000 last year, to monitor the production process. The computer will become obsolete before it wears out from use. The computer will be depreciated at the rate of $1,000 per year. He will rent production equipment at a monthly cost of $8,000. Zach estimates the materials cost per finished unit of product to be $50, and the labor cost to be $10. He will hire hourly paid workers and spend his time promoting the product. To do this, he will quit his job which pays $4,500 per month. Advertising will cost $2,000 per month. Zach will not draw a salary from the new company until it gets well established. Required: Complete the chart below by placing an "X" under each heading that helps to identify the cost involved. There can be "Xs" placed under more than one heading for a single cost; e.g., a cost might be an overhead cost and a product cost. There would be an "X" placed under each of these headings opposite the cost.

The student health center employs one doctor, three nurses, and several other employees. How would you classify (1) the nurses' salary and (2) film and other materials used in radiology to take X-rays? Assume the activity is the number of students visiting the health center. Nurse's Salaries Film and Other Materials Used in Radology A. Fixed cost Fixed cost B. Fixed cost Variable cost C. Variable cost Fixed cost D. Variable cost Variable cost

Transportation costs incurred by a manufacturing company to ship its product to its customers would be classified as which of the following?

The following information was collected from the accounting records of the Part SX9 for 3,000 units: Per Unit Per Period Sales price \ 350 Direct Materials 80 Direct Labor 40 Overhead 60 \ 90,000 Marketing 20 Administrative 60,000 What is Part SX9's total cost per unit?

The cost accountant for the Corner Manufacturing Company has provided you with the following information for the month of July: Variable costs Per unit Total Fixed Direct labor \ 27.50 Direct materials 84.75 Manfacturing overhead 14.25 \ 120,000 Marketing costs 5.30 50,000 Administrative costs 2.90 75,000 Required: Compute the following per unit items, assuming the company produced and sold 5,000 units at a price of $210.00 per unit. (a) Total variable cost. (b) Variable inventoriable cost. (c) Full absorption cost. (d) Full cost. (e) Contribution margin. (f) Gross margin. (g) Profit margin.

Foxburg Company has the following information: Work-in-Process Finished Goods Materials Begirnirg irventory \ 300 \ 400 \ 500 Ending irventory \ 700 \ 900 \ 1,500 Purchases of materials (net) \ 7,700 Cost of Goods Sold \ 15,600 Marufacturing overhead \ 4,300 - What was the cost of goods available for sale for the period?

Mountainburg Industries has developed two new products but has only enough plant capacity to introduce one product during the current year. The following data will assist management in deciding which product should be selected. Product L Product W Direct materials \ 44 \ 36 Machining labor ( \1 2hour) 18 15 Assembly labor ( \1 0/hour) 30 10 Variable overhead ( \8 /hour) 36 18 Fixed overhead (4/hour) 18 9 Total Manufacturing Cost \ 146 \ 88 Estimated selling \1 70 \1 00 Actual research and development costs \ 240,000 \ 175,000 Estimated advertising costs \ 500,000 \ 350,000 Mountainburg's fixed overhead includes rent and utilities, equipment depreciation, and supervisory salaries. Selling and administrative expenses are not allocated to individual products. - For Mountainburg's Product L, the costs for direct materials, machining labor, and assembly labor represent

The costs of direct materials are classified as: Conversion cost Manufacturing cost Prime cost A. Yes Yes Yes B. No No No C. Yes Yes No D. No Yes Yes

Barton's Taco Tico has four taco makers and ten other employees who take orders from customers and perform other tasks. The four taco makers and the other employees are paid an hourly wage. How would you classify (1) the wages paid to the taco makers and other employees and (2) materials (e.g., cheeses, salsa, tomatoes, lettuce, taco shells, etc.) used to make the tacos? Assume the activity is the number of tacos made. Empluyees' Wages Materials to Make the Tacos A. Fixed cost Fixed cost B. Fixed cost Variable cost C. Variable cost Fixed cost D. Variable cost Variable cost

The Yellville Company provided you with the following information for the fiscal year ended December 31. Work-in-process inventory, 12/31 \ 115,800 Finished goods inventory, 1/1 614,800 Direct labor costs incurred 2,008,600 Manufacturing overhead costs 5,368,800 Direct materials inventory, 1/1 501,600 Finished goods inventory, 12/31 1,022,000 Direct materials purchased 3,500,400 Work-in-process inventory, 1/1 202,000 Direct materials inventory, 12/31 338,800 Required: (a) Compute the total manufacturing costs incurred during the year. (b) Compute the total work-in-process during the year. (c) Compute the cost of goods manufactured during the year. (d) Compute the cost of goods sold during the year. (e) Compute the total prime costs for the year. (f) Compute the total conversion costs for the year.

Foxburg Company has the following information: Work-in-Process Finished Goods Materials Begirnirg inventory \ 300 \ 400 \ 500 Endirg inventory \ 4700 \ 900 \ 1,500 Purchases of materials \ 7,700 Cost of Goods Sold \ 15,600 Manufacturing overhead \ 4,300 - What was the direct labor for the period?

The following information is available for Barnes Company for the fiscal year ended December 31: Beginning finished goods inventory in units 0 Units produced 4,800 Units sold 4,000 Sales \4 00,000 Materials cost \9 6,000 Variable conversion cost used \4 8,000 Fixed manufacturing cost \7 2,000 Indirect operating costs (fixed) \8 0,000 - Cost of goods sold using variable costing is:

An opportunity cost is

Grover Company has the following data for the production and sale of 2,000 units. Sales price per unit \ 800per unit Fixed costs: Marketing and administrative \ 400,000 per period Manufacturing overhead \ 200,000 per period Variable costs: Marketing and administrative \ 50 per unit Manufacturing overhead \ 80 per unit Direct labor \ 100 per unit Direct materials \ 200per unit - What is the full cost per unit of making and selling the product?