Exam 2: Refresher on Cost Terms Road Map

Zenco Machine and Tools currently prices its hammers at $12 per unit. The corresponding unit variable cost is $7 and the unit fixed cost is $2 per when 10,000 hammers are produced and sold. Zenco is considering increasing the price of its hammers to $15 since its suppliers have increased the cost of the materials used in production which has caused the unit variable cost to increase to $8. What is Zenco's projected operating income with the new unit selling price and new unit variable cost if it is only able to produce and sell 8,000 hammers?

Colmar, Inc. incurred the following costs for the month of June in manufacturing gardening tools. From this information, the total manufacturing costs are

Companies use financial statements and cost information for budgeting, planning, and control purposes. Explain what vertical analysis is and how it is used to interpret the performance of a business.

Define the term contribution margin and explain how it is computed.

Lincoln Log Construction produces prefabricated log homes. It has the following comparative financial information available for the past three years. Compute the net income for 2022, 2021, and 2020, and indicate whether the company's profitability has improved or worsened over the 3-year period. Explain what is causing the performance change.

Santaya, Inc. incurred the costs listed below for the month of June in making its products. From this list, compute the total product costs and per unit product cost assuming that 10,000 units are produced and sold.

Franconia Florist makes custom floral arrangements. Sales and cost data is available for the current year below. If Franconia Florist were able to increase production and sales by 2,000 units while remaining within its relevant range (not adding extra fixed costs), what would the unit variable cost and unit fixed cost be at 5,000 units?

Variable costs

Which of the following costs does not impact decision-making for a business?

C & G, Inc. has sales and cost data for the current year below. a) If C & G is able to increase production and sales by 2,000 units without adding extra fixed costs, what will be the unit variable cost and unit fixed cost at 5,000 units? b) If C & G is able to increase production and sales by 2,000 units but only by adding extra fixed costs of $20,000, what will be the unit variable cost and unit fixed cost at 5,000 units?

The account balances are show below for Deshields Industries at the end of the current month: The cost of goods manufactured for Deshields Industries at the end of the month is

What is the cost of goods manufactured and how is it computed?

Xenon Corporation has the following cost and expenditure data available for its first month of operations. Complete the table with the data indicating whether the cost incurred would be an expense or an asset, and also, compute the total expenditures related to the costs.

Define a variable cost on a total and a per unit basis and give an example of one.

If Work-In-Process Inventory has a balance of $4,200 at the beginning of the month, direct materials used in production totaled $10,000, direct labor used in production totaled $15,000, and manufacturing overhead applied totaled $3,700, what is the ending balance in the Work-In-Process Inventory at the end of the month, if none of the units are completed and transferred to finished goods inventory?

If Ciaxis Inc. has $0 in its Direct Materials Inventory (beginning), and $9,300 in its Direct Materials Inventory (ending), and purchased $28,400 of direct materials during the period, what amount of direct materials was used in production by Ciaxis during the period?

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?

Explain the cost behavior of a fixed cost in total and per unit when production levels vary and provide an example of one.

Which of the following costs is a variable cost?

The following transactions occurred during the month of April for Nico's Nursery: Determined the total expenses, total assets and total expenditures for Nico's Nursery for April.