Question 1

Which of the following costs reported in the financial statements would uniquely identify the business entity as a manufacturer?

Accepted Answer

A)  Rent expense 
B)  Work-in-process inventory 
C)  Merchandise inventory 
D)  Cost of goods sold 
A)  Rent expense 
B)  Work-in-process inventory 
C)  Merchandise inventory 
D)  Cost of goods sold B

Question 2

HomeShop, Inc. incurred the following costs for the current month to produce custom cabinets:   What are the total (a) manufacturing costs and (b) non-manufacturing costs HomeShop?

Accepted Answer

Total Manufacturing Costs = $341,400; Total Manufacturing Costs = Direct Materials + Direct Labor + Manufacturing Overhead = Wood and hinges for cabinets + Carpenters' salaries and wages + (Factory equipment rent + Factory insurance + Factory Utilities + Factory manager salary + Factory depreciation) = $178,200 + $90,800 + ($25,700 + $6,300 + $11,300 + $6,100 +$23,000) = $341,400
Total Non-Manufacturing Costs = $24,200; Non-manufacturing costs = Period costs = Office supplies + Office equipment depreciation + Office clerks' wages = $7,800 + $9,200 + $7,200 = $24,200

Question 3

Regency Records makes vintage vinyl record albums. It has the following sales and cost data per unit at current production of 100,000 units:   If Regency were able to increase production by 20% without having to add extra capacity, 
a) What amount of total variable and fixed costs will the company recognize? 
b) What amount of net income will the company recognize?

Accepted Answer

(a) Variable Costs = $1,620,000 , Fixed Costs = $530,000; Total Costs = Total Variable Costs + Total Fixed Costs = [{Unit Variable Cost x Expected Units, 100,000 units x (1 + 20%)} + (Unit Fixed Cost x original units, 100,000)] = ($13.50 x 120,000) + (5.30 x 100,000 units) = $1,620,000 + $530,000 = $2,150,000
(b) Net Income = $1,210,000; Sales Revenue - Total Costs = Net Income; Sales Revenue = Unit Selling Price x Expected Sales = [$28.00 x (100,000 units x (1 + 20%)] = $3,360,000; Sales Revenue, $3,360,000 - Total Costs, $2,150,000 [from (a)] = $1,210,000, Profit

Question 4

Within the relevant range, if a company's level of production decreases, variable costs

Accepted Answer

A)  will remain unchanged. 
B)  increase in total, but remain the same per unit. 
C)  decrease in total, but remain the same per unit. 
D)  decrease in total, but the per unit amount may increase or decrease. 
A)  will remain unchanged. 
B)  increase in total, but remain the same per unit. 
C)  decrease in total, but remain the same per unit. 
D)  decrease in total, but the per unit amount may increase or decrease.

Question 5

Skye Corporation reported the following costs and expenses for the month of May, which need to be classified as either a direct cost or an indirect cost:   Classify these costs as either "direct" costs or "indirect" costs for Skye Corporation?

Accepted Answer

The answer of Skye Corporation reported the following costs and...

Question 6

Weston Woodworks has a beginning balance in its Work-in-Process Inventory of $83,000 and an ending balance in its Work-In-Process Inventory of $75,000. If Millville's Cost of Goods Manufactured is $227,000, and it incurred direct costs, which include direct materials, $67,000, and direct labor, $58,000, how much manufacturing overhead was used for production?

Accepted Answer

Manufacturing Overhead used for producti

Question 7

Bert's Business purchased equipment in 2 years ago at a cost $120,000. Last year, Bert had the equipment repaired at a cost of $5,000. In the current year, Bert is faced with the following alternatives: (1) pay for additional repairs for the equipment at a cost of $8,000; or (2) purchase new equipment at a cost of $144,000. The old equipment will have a trade-in value of approximately $20,000. What amount of the equipment costs represent sunk costs?

Accepted Answer

Total Sunk Costs = $125,000,Or

Question 8

Costs are not always easily measured or reported on the financial statements. Identify two types of costs that fit this description, define them, and explain the importance of these costs for decision-making purposes.

Accepted Answer

The two types of costs that are not easi

Question 9

Crescent Computers, Inc. has the following information for the month of October:   Determine the Cost of Goods Sold for Crescent Computers for October.

Accepted Answer

Cost of Goods Sold = $55,000 ,

Question 10

Determine the missing amounts in the following set of data:

Accepted Answer

(a) $7.00, $20.00 - ($8.00 + $5.00) = $7

Question 11

How would the direct materials used be computed if they were not directly accounted for?

Accepted Answer

Direct materials used can be computed by

Question 12

Bestco Products has total inventory balances of $330,000. If 1/6 of the balance reflects goods that are completed and ready for sale, and 3/6 represents materials not yet placed into production, what are the balances in each of the three inventory categories for this manufacturer?

Accepted Answer

Raw Materials Inventory = $165,000; 
Raw

Question 13

Nyce Vending has the following information for the current fiscal year:   The Sales for Nyce Vending are

Accepted Answer

A)  $166,000 
B)  $168,000 
C)  $209,000 
D)  $223,000 
A)  $166,000 
B)  $168,000 
C)  $209,000 
D)  $223,000

Question 14

Window Wizards Manufacturing's information is presented below for the current month:   Compute the total current assets for Window Wizards Manufacturing.

Accepted Answer

Total current assets = $53,810 , Cash, $

Question 15

The following costs were incurred by Birdie's Bikes for the month of July:   Determine the total variable costs and total fixed costs for Birdie's Bikes for the month of July.

Accepted Answer

Total variable costs = $30,390; Total fi

Question 16

Deng Distributors incurred the following costs for the month of April in making smartphone covers:   What are the total period costs for April based on this information?

Accepted Answer

A)  $85,000 
B)  $109,000 
C)  $124,200 
D)  $148,200 
A)  $85,000 
B)  $109,000 
C)  $124,200 
D)  $148,200

Question 17

At year-end, Produce Palace had Sales Revenue of $765,000. Its Cost of Goods Sold was 40% of Sales Revenue. Operating expenses for the year included $135,000 of Selling Expenses, $102,000 of General and Administrative Expenses. Merchandise Inventory was $53,000, and Prepaid Expenses were $23,000. 
a) What is the gross margin and operating income for this Produce Palace, Inc. at year- end using a traditional income statement approach? 
b) If the Sales Revenue is estimated to increase by 10% for the upcoming year due to consumers wanting to eat a healthier diet, what would the gross margin and net income be, assuming that the Cost of Goods percentage remains the same at 40% of sales revenue, using a traditional income statement approach?

Accepted Answer

(a) Gross Margin, $459,000; Operating In

Question 18

Nokitar Company specializes in manufacturing smart phones. The company has enough orders to keep factory production at 1,000 smart phones per month. Nokitar's monthly manufacturing costs and other expense data are shown in the table below. Complete the table, classifying each item as either direct materials (DM), direct labor (DL), manufacturing overhead (MOH), or period cost. Then compute the total manufacturing cost and the per unit manufacturing cost.

Accepted Answer

Direct Materials = $46,000: Direct Labor

Question 19

Explain how direct costs and indirect costs relate to product and manufacturing costs.

Accepted Answer

Both direct costs and indirect costs are

Question 20

Maya has been invited to attend a free accounting conference in Myrtle Beach, SC next month. She is planning travel arrangements for this trip, which will be reimbursed by the college where she works. She is considering the following options for traveling:

Air: Flight (round-trip): $450 (1.5 hours each way 
Parking at airport: (3 days at $15 per day 
Rental Car: $200 
Drive: (1,200 miles in total at $.56 per mile - 9.5 hrs. each way ,Which option proves to be the least costly option for Maya to travel to the conference?

Accepted Answer

Driving is the least costly op

Which of the following costs reported in the financial statements would uniquely identify the business entity as a manufacturer?

HomeShop, Inc. incurred the following costs for the current month to produce custom cabinets: What are the total (a) manufacturing costs and (b) non-manufacturing costs HomeShop?

Within the relevant range, if a company's level of production decreases, variable costs

Skye Corporation reported the following costs and expenses for the month of May, which need to be classified as either a direct cost or an indirect cost: Classify these costs as either "direct" costs or "indirect" costs for Skye Corporation?

Costs are not always easily measured or reported on the financial statements. Identify two types of costs that fit this description, define them, and explain the importance of these costs for decision-making purposes.

Crescent Computers, Inc. has the following information for the month of October: Determine the Cost of Goods Sold for Crescent Computers for October.

Determine the missing amounts in the following set of data:

How would the direct materials used be computed if they were not directly accounted for?

Bestco Products has total inventory balances of $330,000. If 1/6 of the balance reflects goods that are completed and ready for sale, and 3/6 represents materials not yet placed into production, what are the balances in each of the three inventory categories for this manufacturer?

Nyce Vending has the following information for the current fiscal year: The Sales for Nyce Vending are

Window Wizards Manufacturing's information is presented below for the current month: Compute the total current assets for Window Wizards Manufacturing.

The following costs were incurred by Birdie's Bikes for the month of July: Determine the total variable costs and total fixed costs for Birdie's Bikes for the month of July.

Deng Distributors incurred the following costs for the month of April in making smartphone covers: What are the total period costs for April based on this information?

Explain how direct costs and indirect costs relate to product and manufacturing costs.

Cost Accounting Has Purpose

Cost Behavior and Estimation

Cost-Volume-Profit Analysis

Cost Accounting Has Purpose

Mastering the Master Budget

Capital Budgeting Choices and Decisions

Job Costing

Activity- Based Costing

Variance Analysis and Standard Costing

Process Costing

Absorption Versus Variable Costing

Data Analytics

Support Department Costing

Joint Costs and Decision-Making

The Art and Science of Pricing to Optimize Revenue

Management Control Systems and Transfer Pricing

Business Strategy, Performance Measurement, and the Balanced Scorecard

Filters

Exam 2: Refresher on Cost Terms Road Map

Which of the following costs reported in the financial statements would uniquely identify the business entity as a manufacturer?

HomeShop, Inc. incurred the following costs for the current month to produce custom cabinets: What are the total (a) manufacturing costs and (b) non-manufacturing costs HomeShop?

Within the relevant range, if a company's level of production decreases, variable costs

Skye Corporation reported the following costs and expenses for the month of May, which need to be classified as either a direct cost or an indirect cost: Classify these costs as either "direct" costs or "indirect" costs for Skye Corporation?

Costs are not always easily measured or reported on the financial statements. Identify two types of costs that fit this description, define them, and explain the importance of these costs for decision-making purposes.

Crescent Computers, Inc. has the following information for the month of October: Determine the Cost of Goods Sold for Crescent Computers for October.

Determine the missing amounts in the following set of data:

How would the direct materials used be computed if they were not directly accounted for?

Bestco Products has total inventory balances of $330,000. If 1/6 of the balance reflects goods that are completed and ready for sale, and 3/6 represents materials not yet placed into production, what are the balances in each of the three inventory categories for this manufacturer?

Nyce Vending has the following information for the current fiscal year: The Sales for Nyce Vending are

Window Wizards Manufacturing's information is presented below for the current month: Compute the total current assets for Window Wizards Manufacturing.

The following costs were incurred by Birdie's Bikes for the month of July: Determine the total variable costs and total fixed costs for Birdie's Bikes for the month of July.

Deng Distributors incurred the following costs for the month of April in making smartphone covers: What are the total period costs for April based on this information?

Explain how direct costs and indirect costs relate to product and manufacturing costs.

Cost Accounting Has Purpose

Cost Behavior and Estimation

Cost-Volume-Profit Analysis

Cost Accounting Has Purpose

Mastering the Master Budget

Capital Budgeting Choices and Decisions

Job Costing

Activity- Based Costing

Variance Analysis and Standard Costing

Process Costing

Absorption Versus Variable Costing

Data Analytics

Support Department Costing

Joint Costs and Decision-Making

The Art and Science of Pricing to Optimize Revenue

Management Control Systems and Transfer Pricing

Business Strategy, Performance Measurement, and the Balanced Scorecard

Filters