Exam 2: Basic Managerial Accounting Concepts

Describe the purpose of the three inventory accounts used by a manufacturer.

Which of the following would be found on the balance sheet of a manufacturer?

Select the appropriate classification for each of the costs incurred by a manufacturer of automobiles. a. direct materials b. direct labor c. overhead d. selling expense e. administrative expense -general accounting costs

The difference between sales revenue and cost of goods sold is known as the ______________.

________________ are those costs, both direct and indirect, of producing a product in a manufacturing firm or of acquiring a product in a merchandising firm and preparing it for sale.

Gross margin is the difference between sales revenue and cost of goods sold.

Prime cost is

Select the appropriate item for each of the definitions listed below. a. gross margin b. selling expenses c. sales revenue d. cost of goods sold e. operating income -marketing and distributing costs

Figure 2-1. Concam Inc. manufactures television sets. Last month direct materials (electronic components, etc.) costing $500,000 were put into production. Direct labor of $800,000 was incurred, overhead equaled $450,000, and selling and administrative costs totaled $360,000. The company manufactured 8,000 television sets during the month. Assume that there were no beginning or ending work in process balances. -Refer to Figure 2-1. What was the amount of cost of goods manufactured last month?

Select the appropriate definition for each of the items listed below. a. period cost b. direct cost c. opportunity cost d. variable cost e. indirect cost f. fixed cost g. product cost -A cost that can be easily traced to a cost object

Tesco Company showed the following costs for last month: Last month, Tesco produced and sold 20,000 units at a sales price per unit of $18. Assume no beginning or ending inventory balances for work in process and finished goods inventory. Required: Solve for the following amounts.

Select the appropriate classification for each of the items listed below. a. Product cost b. Period cost -Fees paid to an advertising firm

What is the difference between a period cost and a product cost?

Assigning costs to cost objects

Information from the records of Place, Inc., for December 2011 is as follows: Net income for the month of December is:

Rancor Company's accountant prepared the following income statement for the month of August. Required:

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

Templar Company, a manufacturing firm, has supplied the following information from its accounting records for the month of November: Required:

Direct labor is a(n)

Select the appropriate definition for each of the items listed below. a. period cost b. direct cost c. opportunity cost d. variable cost e. indirect cost f. fixed cost g. product cost -A cost that stays the same in total regardless of changes in output