Exam 2: Basic Managerial Accounting Concepts

Rizzuto Company supplied the following information for the month of January. Required: Reconstruct Rizzuto's income statement for January assuming that their total sales revenue for the month equaled $500,000.

In June, Olympic Company purchased materials costing $38,000, and incurred direct labor cost of $42,000. Overhead totaled $27,000 for the month. Information on inventories was as follows. Required:

Select the appropriate definition for each of the items listed below. a. Work in process inventory b. Finished goods inventory c. Cost of goods sold d. Cost of goods manufactured e. Total manufacturing costs -Direct materials + direct labor + overhead

Figure 2-7. Gateway Company produces a product with the following per-unit costs: Last year, Gateway produced and sold 750 units at a sales price of $68 each. Total selling and administrative expense was $22,000. -Refer to Figure 2-7. Prime cost per-unit was?

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

Select the appropriate definition for each of the items listed below. a. per-unit prime cost b. per-unit conversion cost c. per-unit cost of goods manufactured -(direct labor + overhead)/units produced

Employees who convert direct materials into a product are classified as _____________.

Figure 2-8. Last year Quest Company incurred the following costs: Quest produced and sold 2,000 units at a sales price of $125 each. Assume that beginning and ending inventories of materials, work in process, and finished goods were zero. -Refer to Figure 2-8. Gross margin per-unit was?

Costs can be assigned to cost objects in only one way.

A(n)_________________ is the benefit given up or sacrificed when one alternative is chosen over another.

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 is not inventoried

Figure 2-6. Seaview Company took the following data from their income statement at the end of the current year. -Refer to Figure 2-6. What was gross margin for the year?

Select the appropriate definition for each of the items listed below. a. Work in process inventory b. Finished goods inventory c. Cost of goods sold d. Cost of goods manufactured e. Total manufacturing costs -(direct materials + direct labor + overhead) +/-the change in work in process inventory from the beginning to the end of the current period

Accumulating costs is the way that costs are measured and recorded.

______________________ is the sum of direct labor cost and manufacturing overhead cost.

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. The per-unit conversion cost was:

It is beneficial to assign indirect costs to cost objects.

Which of the following is an example of an intangible product?

Period costs are all costs that are not product costs, such as office supplies.

Assigning costs involves the way that a cost is linked to some cost object.