Exam 2: Refresher on Cost Terms Road Map

At the beginning of the year, Gizmo Inc. is considering whether to repair and retain an existing machine, or to replace it with a new machine. The following information is available to analyze this decision: Which of the costs being considered for this decision represents a sunk cost?

Castle Cameras incurred the following costs for the month of May in making cameras: What are the total product costs and total period costs for Castle Cameras for May based on this information?

Match the following terms the appropriate defintion. -Asset

Match the following terms the appropriate defintion. -Cost

If Johnson Manufacturing has the following information, what is the cost of goods sold?

Manufacturing costs incurred during production are

Differentiate between product costs and period costs.

Magnum Manufacturing had sales revenue last year of $100,000, direct manufacturing costs of $60,000, and indirect manufacturing costs of $20,000. If Magnum expects revenues to increase by 10% for the upcoming year, with direct manufacturing costs maintaining the same percentage relationship to sales as in the previous year, and the indirect manufacturing costs remaining unchanged, what will the expected profit margin be for Magnum during the upcoming year?

Millville Menagerie has a beginning balance in its Work-in-Process Inventory of $33,000 and an ending balance in its Work-in-Process Inventory of $25,000. If Millville's Cost of Goods Manufactured is $114,000, and it incurred costs for direct materials, $42,000, and direct labor, $38,000, how much manufacturing overhead was assigned (applied) to production?

Aquafresco manufactures bottled water with all-natural flavoring added. Aquafresco reported the information below for the current year using a contribution margin income statement format: Present Aquafresco's contribution margin income statement in the traditional gross margin income statement format.

Which of the following journal entries is correct to account for the cost of goods completed at the end of a period?

Which of the following business activities would not be considered a value-added activity in the value chain of a business?

At a sales level of $300,000, Ben's Burgers' gross margin is $50,000 less than its contribution margin. If its operating income is $75,000, and total SG&A expenses are $30,000, what is the contribution margin of Ben's Burgers?

Define the terms expenses, costs, and expenditures and explain their differences.

A merchandiser shows total current assets of $59,000 and the following additional information: How much Merchandise Inventory would be reported for the merchandiser?

At year-end, a Hannah's Housekeeping Services had Service Revenue of $128,000. Other pertinent information for the period is shown below: Prepare an income statement to show the amount of operating income that Hannah's Housekeeping Services earned for this past year?

Match the following terms the appropriate defintion. -Expenditure

Assuming all units produced are sold for a business, then the operating income computed in a contribution income statement as compared to a gross margin income statement is

Which account will appear on a company's income statement?

Samsuni makes wireless earbuds. The prior-year, unit selling price for a set of earbuds was $100 with a unit variable cost of $40 and a unit fixed cost of $10 based on production and sales of 5,000 sets. For the current year, Samsuni is planning to increase the unit selling price to $105 since the unit variable cost increased by 20% and the total fixed cost also increased by 10%. Assume that at the higher selling price, the company feels that unit sales may decrease to 4,500 sets. What operating income will Samsuni expect to recognize for the current year?