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. $\begin{array}{lrrrr} &\text { Product L } &\text { Product W}\\ \text { Direct materials } & \$ 44 & \$ 36 \\ \text { Machining labor (\$12hour) } &18 & 15 \\ \text { Assembly labor (\$10/hour) } & 30 & 10 \\ \text { Variable overhead (\$8/hour) } & 36 & 18 \\ \text { Fixed overhead (4/hour) } & 18 & 9\\ \text { Total Manufacturing Cost } &\$ 146 &\$ 88 \\ \text { Estimated selling } \mathrm{p} & \$170 &\$100 \\ \text { Actual research and development costs } & \$ 240,000 & \$ 175,000 \\ \text { Estimated advertising costs } & \$ 500,000 & \$ 350,000 \\ \end{array}$ Mountainburg's fixed overhead includes rent and utilities, equipment depreciation, and supervisory salaries. Selling and administrative expenses are not allocated to individual products. - Direct material costs for Mountainburg's two new products are

A) Prime costs. B) Conversion costs. C) Opportunity costs. D) Period costs. A) Prime costs. B) Conversion costs. C) Opportunity costs. D) Period costs.

The following information is available for Barnes Company for the fiscal year ended December 31: $\begin{array}{llr} \text { Beginning finished goods inventory in units } &0\\ \text {Units produced } &4,800\\ \text { Units sold } &4,000\\ \text { Sales } &\$400,000\\ \text { Materials cost } &\$96,000\\ \text { Variable conversion cost used } &\$48,000\\ \text { Fixed manufacturing cost} &\$72,000\\ \text { Indirect operating costs (fixed)} &\$80,000\\ \end{array}$ - Cost of goods sold using absorption costing is:

A) $246,667 B) $120,000 C) $180,000 D) $40,000 A) $246,667 B) $120,000 C) $180,000 D) $40,000

The following information is available for Barnes Company for the fiscal year ended December 31: $\begin{array}{llr} \text { Beginning finished goods inventory in units } &0\\ \text {Units produced } &4,800\\ \text { Units sold } &4,000\\ \text { Sales } &\$400,000\\ \text { Materials cost } &\$96,000\\ \text { Variable conversion cost used } &\$48,000\\ \text { Fixed manufacturing cost} &\$72,000\\ \text { Indirect operating costs (fixed)} &\$80,000\\ \end{array}$ - The variable costing operating income is:

A) $120,000 B) $140,000 C) $104,000 D) $128,000 A) $120,000 B) $140,000 C) $104,000 D) $128,000

Grover Company has the following data for the production and sale of 2,000 units. $\begin{array}{llr} \text { Sales price per unit } & \text {\$ 800per unit } \\ \text { Fixed costs: } & & \\ \text { Marketing and administrative } &\$ 400,000 \text { per period } \\ \text { Manufacturing overhead } & \$ 200,000 \text { per period }\\ \text { Variable costs: }\\ \text { Marketing and administrative } & \$ 50 \text { per unit } \\ \text { Manufacturing overhead } & \$ 80 \text { per unit } \\ \text { Direct labor } & \$ 100 \text { per unit } \\ \text { Direct materials } & \$ \text { 200per unit } \end{array}$ - What is the contribution margin per unit?

A) $70 B) $320 C) $370 D) $430 A) $70 B) $320 C) $370 D) $430

Exam 2: Cost Concepts and Behavior

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. - Direct material costs for Mountainburg's two new products are

(Multiple Choice)

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Question 141

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 absorption costing is:

(Multiple Choice)

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Question 142

Which of the following best distinguishes an opportunity cost from an outlay cost?

(Multiple Choice)

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Question 143

The three basic elements of manufacturing cost are direct materials, direct labor, and:

(Multiple Choice)

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Question 144

Cost of goods sold plus the ending finished goods inventory minus the beginning finished goods inventory equals the cost of goods manufactured.

(True/False)

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Question 145

The term "gross margin" for a manufacturing firm refers to the excess of sales over:

(Multiple Choice)

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Question 146

Each column below is independent and for a different company. Use the data given, which refers to one year for each example, to find the unknown account balances.

(Essay)

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Question 147

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 variable costing operating income is:

(Multiple Choice)

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Question 148

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 contribution margin per unit?

(Multiple Choice)

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Question 149

A number of costs and measures of activity are listed below. Required: For each item above, indicate whether the cost is MAINLY fixed or variable with respect to the possible measure of activity listed next to it.

(Essay)

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Question 150

Which of the following costs is both a prime cost and a conversion cost?

(Multiple Choice)

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Question 151

The beginning Work-in-Process Inventory plus the total of the manufacturing costs equals

(Multiple Choice)

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Question 152

Grankowski Corporation has provided the following partial listing of costs incurred during November: Required: (a) What is the total amount of product costs listed above? Show your work. (b) What is the total amount of period costs listed above? Show your work.

(Essay)

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Question 153

Which of the following best distinguishes an opportunity cost from an outlay cost?

The three basic elements of manufacturing cost are direct materials, direct labor, and:

Cost of goods sold plus the ending finished goods inventory minus the beginning finished goods inventory equals the cost of goods manufactured.

The term "gross margin" for a manufacturing firm refers to the excess of sales over:

Each column below is independent and for a different company. Use the data given, which refers to one year for each example, to find the unknown account balances.

A number of costs and measures of activity are listed below. Required: For each item above, indicate whether the cost is MAINLY fixed or variable with respect to the possible measure of activity listed next to it.

Which of the following costs is both a prime cost and a conversion cost?

The beginning Work-in-Process Inventory plus the total of the manufacturing costs equals

Grankowski Corporation has provided the following partial listing of costs incurred during November: Required: (a) What is the total amount of product costs listed above? Show your work. (b) What is the total amount of period costs listed above? Show your work.

Cost Accounting: Information for Decision Making

Fundamentals of Cost-Volume-Profit Analysis

Fundamentals of Cost Analysis for Decision Making

Cost Estimation

Fundamentals of Product and Service Costing

Job Costing

Process Costing

Activity-Based Costing

Fundamentals of Cost Management

Service Department and Joint Cost Allocation

Fundamentals of Management Control Systems

Planning and Budgeting

Business Unit Performance Measurement

Transfer Pricing

Fundamentals of Variance Analysis

Additional Topics in Variance Analysis

Performance Measurement to Support Business Strategy

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