Exam 2: Basic Cost Management Concepts

The following information is from the records of Stretch Limousines, Inc.: Net direct materials purchase cost \ 225,000 Total direct materials used 275,000 Beginning direct material s inventory 125,000 The ending direct materials inventory is

Which of the following costs incurred by a chair manufacturer would be traced to the product cost through direct tracing?

Which of the following costs would NOT be included in operating product costs?

The cash or cash equivalent value sacrificed for goods and services that are expected to bring a current or future benefit to the organization is/are called:

Gross margin, also called gross profit, is the difference between sales and costs of goods sold.

Which of the following accounts would appear on the financial statements of ONLY a manufacturing firm?

The income statement prepared for external parties is frequently referred to as absorption-costing income, or full costing income.

Cost management systems can be broadly classified as traditional or activity based.

When calculating the absorption-costing income for external reporting, all

Which of the following expenses incurred by a department store is a direct cost for the women's shoe department?

Inventory balances for the Jameson Company in October 2018 are as follows: October 1,2018 October 31,2018 Raw materials \ 27,000 \ 21,000 Work in process 48,000 37,200 Finished goods 108,000 90,000 During October, purchases of direct materials were $36,000. Direct labor and factory overhead costs were $60,000 and $84,000, respectively. What are the total manufacturing costs added to production in the period?

Wages paid to a janitor in the factory would be classified as

Cost of goods sold equals cost of goods manufactured

Production costs are costs associated with manufacturing goods or providing services and are classified as direct materials, direct labor, and overhead.

The following is the data for Lauren Enterprises: Selling and administrative expenses \ 75,000 Direct materials used 265,000 Direct labor (25,000 hours) 300,000 Factory overhead application rate \ 16 per DLH $\text { Inventories }$ Beginining Ending Direct materials \ 50,000 \ 45,000 W ork in process 75,000 90,000 Finished goods 40,000 25,000 What is the cost of goods manufactured?

Information from the records of Chrome Ponies Enterprises for June 2018 is as follows: Sales \ 41,000 Direct labor 10,000 Selling and administrative expenses 7,000 Direct materials purchases 6,000 Factory overhead 13,500 Inventories June 1,2018 June 30,2018 \ 1,200 \ 1,400 Direct materials 2,500 2,800 Work in process 2,300 1,900 Chrome Ponies Enterprises' cost of goods manufactured in June is

In a cost management system, the process view does NOT include

A small engine repair shop purchased materials costing $9,000 in July. The beginning inventory of material parts was $4,500 and the ending inventory of material parts was $4,000. Payments for direct labor for July totaled $27,000, secretarial costs were $2,000, and overhead of $5,000 was incurred. In addition, $5,000 was spent on advertising and $2,000 for the franchise name. Revenue for July was $50,000. What is the gross margin for July?

Information from the records of the Conundrum Company for September 2018 was as follows: Sales \ 307,500 Selling and administrative expenses 52,500 Direct materials used 66,000 Direct labor 75,000 Variable factory overhead 50,000 Factory overhead 51,250 Inventories Sept. 1,2018 Sept 30,2018 Direct materials \ 8,000 \ 10,500 Work in process 18,750 21,000 Finished goods 17,250 14,250 Conundrum Corporation produced 20,000 units. The prime costs per unit for September were

The following information pertains to Steel Wheels, Inc: Cost of goods manufactured \ 350,000 Beginning work-in-process inventory 110,000 Ending work-in-process inventory 80,000 Manufacturing overhead 50,000 What are the prime costs for the year?