Exam 2: Refresher on Cost Terms Road Map

Given the following items listed below, identify on which type(s) of business financial statements these items would normally appear , More than one selection may be included in an answer. -Work-In-Process Inventory

Opportunity costs

Given the following items listed below, identify on which type(s) of business financial statements these items would normally appear , More than one selection may be included in an answer. -Finished Goods Inventory

Prepare the journal entry for the following production activity for the current week: • Incurred $5,600 of manufacturing overhead in production of goods for utilities. • Incurred direct labor costs of $37,200 in production of goods. • Direct materials of $13,700 were requisitioned for production.

Marco Manufacturers has a current unit selling price of $120 with a unit variable cost of $70 and total fixed costs of $60,000. At its current production level of 1,000 units, it is experiencing a net loss of $10,000. The company is trying to plan a strategy for the upcoming year that will result in a profit. It is considering the following options while maintaining the same current production of 1,000 units: Option 1: Outsource some of its parts' production. The external unit price (unit cost) will only result in cost-savings of $20 in unit variable cost but $5,000 in fixed costs can be saved ($55,000 of fixed costs will still be incurred) Option 2: Move to automating most of the production, which will result in a significant cut the unit variable cost, reducing it to $40 per unit, but increasing the total fixed costs to $68,000. Using a contribution margin income statement format, determine which option appears to be the best for Marco Manufacturers. (Highest net income)

Using vertical analysis for the income statement, the base, set at 100%, is

If all units produced are sold during a period for a business, then the total expenses on a traditional income statement compared to those presented on a contribution margin income statement

DeLino Distribution has the following cost data provided in the table below for the month of March: Additional information related to the company's Inventory is provided below: Compute the Cost of Goods Manufactured and Cost of Goods Sold for Delino Distribution for the month of March.

Which of the following is not an expense?

MCG Industries has the following sales and cost data per unit at current production of 10,000 units: If MCG Industries was able to increase production to 20,000 units without having to add extra capacity, what will the total costs be for the company?

Copper Creek Nursery purchases annual and perennial plants from Commercial Landscapers. If the nursery purchases at least 3,000 plants, the cost per annual plant is $1.50 and the cost per perennial plant is $2.00. If 3,001 or more plants are purchased, then a bulk discount of 20% is given for the entire purchase. If Copper Creek purchases 3,000 annual plants and 2,000 perennial plants, what will be the total variable cost of the plants purchased?

Explain how variable costs and fixed costs can be graphed in conjunction with revenues to reflect profit, loss and the breakeven point.

What are the three different types of Inventory for a manufacturer, and explain what each of them includes?

Define prime costs and conversion costs as they relate to product costs.

Yogo Factory reports the following costs and expenses for the month of August What is the total "Manufacturing Overhead" for Yogo Factory for August?

Which of the following is a true statement about the definition of costs?

Given the following information for C & J, Inc. identify where the items will be classified (asset or expense, or not reported) and on which financial statement the items will reported (income statement, balance sheet, or N/A).

Sierra Ski, Inc. reported the following costs and expenses for the month of January: What are the amounts for "Prime Costs" and "Conversion Costs" for Sierra Ski, Inc. for January?

TMZ Transportation purchased a truck 5 years ago at a cost of $98,000. The truck has been depreciated on an annual basis using straight-line depreciation. The truck had new tires installed 2 years ago at a total cost of $1,200 and had an engine overhaul last year, which cost $5,000. It is expected that the truck will need additional repairs of $3,000 in the current year. Because of these repair and upgrade costs, the company is now considering a purchase of a new truck to replace the old one. The old truck has a trade-in/sale value of $13,000. The cost of the new truck is $102,000. What amount of these costs represent sunk costs?

Which of the following statements regarding expenses and costs is correct?