Exam 2: An Introduction to Cost Terms and Purposes

Sheen Manufacturing has four manufacturing cost pools and many types of costs, some of which ar e listed below. Match the type of cost with the most appropriate cost pool or as a period cost. -factory worker overtime premiums

Sheen Manufacturing has four manufacturing cost pools and many types of costs, some of which ar e listed below. Match the type of cost with the most appropriate cost pool or as a period cost. -property taxes on the administration office

Sheen Manufacturing has four manufacturing cost pools and many types of costs, some of which ar e listed below. Match the type of cost with the most appropriate cost pool or as a period cost. -amortization on buildings and equipment

Use the information below to answer the following question(s). Big Island Coffee Co. produced and sold 120,000 units last year. Per unit revenue and costs were as follows: Fixed manufacturing overhead and administrative salaries are fixed costs. The per unit amounts are based on last year's production. -Calculate this year's operating income if the company plans to produce and sell 200,000 units.

Answer the following question using the information below. Pederson Company reported the following: -What is the amount of gross margin?

Big Bird Pet Store had the following financial activities for June. Revenue was $860,000 with cost of goods sold equalling $440,000. Salaries and wages of all employees were $100,000. Fringe benefits were 15 percent of salaries and wages. Rent on the building was $100,000 and equipment amortization was $46,000. Office supplies and utilities totalled $28,000. Income taxes withheld from employees totalled $46,000 for the month while ending accounts payable were $24,680. Cash flows from accounts receivable totalled $880,000. Required: Using an income statement format, determine the operating income of the store.

Use the information below to answer the following question(s). Big Island Coffee Co. produced and sold 120,000 units last year. Per unit revenue and costs were as follows: Fixed manufacturing overhead and administrative salaries are fixed costs. The per unit amounts are based on last year's production. -Calculate this year's operating income if the company plans to produce and sell 60,000 units.

Use the information below to answer the following question(s). The following information pertains to Payton's Shoe Manufacturing: 99,500 pairs of shoes are sold during the year for $18. -What is the amount of Payton's gross profit?

Sheen Manufacturing has four manufacturing cost pools and many types of costs, some of which ar e listed below. Match the type of cost with the most appropriate cost pool or as a period cost. -idle time wages

Macadamia Co. produced and sold 40,000 units last year. Per unit revenue and costs were as follows: The Fixed Manufacturing Overhead provides a capacity of 50,000 units. The Production Manager has proposed leasing a new machine at a cost of $80,000 per year. This will reduce Direct Labour by 30% and improve quality so the the selling price per unit can be increased by $10. Production and sales are expected to remain the same as last year. Required: Prepare a statement of operating income assuming the leasing proposal is accepted.

Sheen Manufacturing has four manufacturing cost pools and many types of costs, some of which ar e listed below. Match the type of cost with the most appropriate cost pool or as a period cost. -property insurance on the factory

The following information pertains to the Stratford Company: What is the cost of goods sold?

Use the information below to answer the following question(s). Ontario Industries Inc. had the following activities during the year: -What is the amount of Ontario Industries Inc.'s ending finished goods inventory?

Use the information below to answer the following question(s). Montreal Industries Inc. had the following activities during the year: -What is Montreal's cost of direct materials used during the year?

A new employee in the accounting department is having difficulty understanding two sets of accounting terms-variable and fixed costs as opposed to period and product costs. He understands that variable costs change during an accounting period while fixed costs do not. However, he explains that a period cost implies that it is for a period of time and is, therefore, also fixed. Does his assumption imply that all product costs are then variable? Required: As part of your responsibility to train new staff, explain the difference between these terms.

Use the information below to answer the following question(s). Consider the following data of the Vancouver Company for the year 2016: -What is the unit cost for the plant leasing costs for 2016 assuming plant leasing costs are for the production of 1,014,000 units?

The vice president of production has just completed the January meeting with all production department heads. Everyone is upset that the production variances for the month were unfavourable. They do not understand why everything was unfavourable. January is typically the company's lowest production month of the year. The company uses annual average unit costs for production evaluation purposes. The average costs are based on the prior year's actual performance with adjustments for any predicted changes in the coming year. Both production and economic items are considered in setting the averages for each new year. Required: Explain the problems with using average costs in evaluating production.

Use the information below to answer the following question(s). Frazer Inc. had the following activities in the year: -What is Frazer's cost of goods sold?

Use the information below to answer the following question(s). Montreal Industries Inc. had the following activities during the year: -What is Montreal's cost of goods sold during the year?

Answer the following question using the information below. Pederson Company reported the following: -What is the average manufacturing cost per unit?