Exam 3: Basic Cost Management Concepts

The following data pertains to Lam Co.'s manufacturing operations: Inventories 4/1 4/30 Direct Materials \ 18,000 \ 15,000 Work in Process 9,000 6,000 Finished Goods 27,000 36,000 $\text { Additional information for the month of April: }$ Direct materials purchased \3 2,000 Direct labor 30,000 Direct labor rate per hour 10.00 Factor overhead incurred 40,000 $\text { Overhead is applied at } \$ 12 \text { per direct labor hour. }$ For the month of April, prime cost incurred was:

The additional cost incurred as the cost driver increases by one unit is:

Stephenson Company's computer system recently crashed, erasing much of the company's financial data. The following accounting information was discovered soon afterwards on the CFO's back-up computer data. Cost of Goods Sold \ 380,000 Work-in-Process Inventory, Beginning 30,000 Work-in-Process Inventory, Ending 40,000 Selling and Administrative Expense 50,000 Finished Goods Inventory, Ending 15,000 Finished Goods Inventory, Beginning ? Direct Materials Purchased 171,000 Factory Overhead Applied 112,000 Operating Income 22,000 Direct Materials Inventory, Beginning 18,000 Direct Materials Inventory, Ending 6,000 Cost of Goods Manufactured 340,000 Direct Labor 55,000 The CFO of Stephenson Company has asked you to recalculate the following accounts and report to him by week's end. What should be the amount of direct materials used?

A manager of a large retail firm is interested in knowing what the company's product costs are. Which of the following would be considered a product cost for the manager's company?

When cost relationships are linear, total variable costs will vary in proportion to changes in:

The following information was taken from the accounting records of Elliott Manufacturing Corp. Unfortunately, some of the data were destroyed by a computer malfunction. Sales Revenue \ 58,000 Finished Goods Inventory, Beginning 9,000 Finished Goods Inventory, Ending 6,000 Cost of Goods Sold ? Gross Margin 25,000 Direct Materials Used 10,000 Selling and Administrative Expense ? Operating Income 14,000 Work-in-Process Inventory, Beginning ? Work-in-Process Inventory, Ending 5,000 Direct Labor Used 9,000 Factory Overhead 12,000 Total Manufacturing Cost ? Cost of Goods Manufactured ? Selling and administrative expenses are calculated to be:

Manufacturing firms use which of the following three inventory accounts?

Consider the following information for Blue Water Equipment, Inc., a manufacturer of sailboat rigging, blocks, and cordage. Required: Prepare a statement of cost of goods manufactured and an income statement for Blue Water Equipment, Inc.for the year.

Which one of the following would not be found in a merchandising company?

Which of the following best describes a fixed cost?

The term relevant range as used in cost accounting means the range over which:

Consider the following for Guardian Manufacturing Company: Change in finished goods inventory \ 315 increase Change in work-in-process inventory \ 145 increase Total manufacturing costs \ 630 What are the cost of goods manufactured and cost of goods sold? Cost of goods Cost of goods manufactured sold A) \ 470 \ 320 B) \ 485 \ 170 C) \ 505 \ 280 D) \ 485 \ 370

There is no convenient or economical way to trace a(n) _______ from the cost to the cost pool or from the cost pool to the cost object.

Dave's Lighting Inc. produces lamps for the construction industry. During the year, the company incurred the following costs: Factory Rent \8 0,000 Direct labor used 425,000 Factory utilities 50,000 Direct materials purchases 600,000 Indirect materials 150,000 Indirect labor 90,000 $\text { Inventories for the year were: }$ January 1 December 31 Direct materials \1 00,000 \7 5,000 Work in process 20,000 10,000 Finished goods 250,000 215,000 Required: Prepare a statement of cost of goods manufactured and a statement of cost of goods sold.

A manufacturer of machinery currently produces equipment for a single client.The client supplies all required raw material on a no-cost basis.The manufacturer contracts to complete the desired units from this raw material.The total production costs incurred by the manufacturer are correctly identified as:

Direct materials and direct labor costs total $40,000 and factory overhead costs total $100 per machine hour.If 200 machine hours were used for Job #202, what is the total manufacturing cost for Job #202?

Theoretically, a decision maker would probably be willing to buy cost management information if:

Assume the following information pertaining to Moonbeam Company: Beginning Ending Finished goods inventory \ 130,000 \ 124,000 Work in process inventory 85,000 104,000 Direct materials 117,000 130,000 $\text { Costs incurred during the period are as follows: }$ Total manufacturing costs \ 896,000 Factory overhead 199,000 Direct materials used 156,000 Cost of goods sold is calculated to be:

Conrad, Inc. recently lost a portion of its records in an office fire. The following information was salvaged from the accounting records. Cost of Goods Sold \ 65,000 Work-in-Process Inventory, Beginning 10,500 Work-in-Process Inventory, Ending 9,000 Selling and Administrative Expense 15,000 Finished Goods Inventory, Ending 15,000 Finished Goods Inventory, Beginning ? Direct Materials Used ? Factory Overhead Applied 12,000 Operating Income 14,000 Direct Materials Inventory, Beginning 11,000 Direct Materials Inventory, Ending 6,000 Cost of Goods Manufactured 60,000 Direct labor cost incurred during the period amounted to 1.5 times the factory overhead. The CFO of Conrad, Inc. has asked you to recalculate the following accounts and to report to him by the end of the day. What is the amount of net sales?

Assume the following information pertaining to Moonbeam Company: Beginning Ending Finished goods inventory \ 130,000 \ 124,000 Work in process inventory 85,000 104,000 Direct materials 117,000 130,000 $\text { Costs incurred during the period are as follows: }$ Total manufacturing costs \ 896,000 Factory overhead 199,000 Direct materials used 156,000 Materials purchases are calculated to be: