Exam 3: Basic Cost Management Concepts

Fisher,Inc.recently lost a portion of its records in an office fire.The following information was salvaged from the accounting records. Direct labor cost incurred during the period amounted to 1.5 times the factory overhead.The CFO of Fisher,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 direct materials used?

The main objective(s)of internal accounting controls is/are:

Tough Trucks is an up-scale,higher-priced,specialty pickup truck maker based in Irvine,California.The management accountant for Premium Pickups compiled information for various levels of pickup truck output: Required: Rounding all calculations to the nearest dollar,fill in the blanks with the correct figures.

Tierney Construction,Inc.recently lost a portion of its financial records in an office theft.The following accounting information remained in the office files: Direct labor cost incurred during the period amounted to 2.5 times the factory overhead.The CFO of Tierney Construction,Inc.has asked you to recalculate the following accounts and to report to him by the end of tomorrow. What should be the amount in the finished goods inventory at December 31,2010?

A computer virus destroyed some of the accounting records for Hampton Furniture Company for the periods of 2008-2010.The following information was salvaged from the computer system.

Bracken Co.incurred the following costs during 2010: What was the amount of direct materials used and direct labor for the year?

All indirect manufacturing costs are commonly combined into a single cost pool called:

Choco Chocolata is a cookie company in Juarez,Mexico that produces and sells American-style chocolate chip cookies with extremely high quality and service.The owner would like to identify the various costs incurred during each year in order to plan and control the costs in the business.Chocolata's costs are the following (in thousands of pesos):

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 backup computer disk. Direct labor cost incurred during the period amounted to 1.5 times the factory overhead.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 in the finished goods inventory at December 31,2010?

Factory overhead costs for this period were 3 times as much as the direct material costs.Prime costs totaled $2,000.Conversion costs totaled $3,280.What are the direct labor costs for the period?

The following costs are incurred by the Oakland Company,a manufacturer of furniture. 1)wood and fabric used in furniture 2)depreciation on machinery 3)property taxes on the factory 4)labor costs to manufacture the furniture 5)electricity cost to operate the machinery 6)factory rent 7)production supervisor's salary 8)sandpaper and other supplies 9)fire insurance on factory 10)commissions paid to salespersons Required: Classify each cost as either variable or fixed.

Prime cost and conversion cost share what common element of total cost?

The following information was taken from the accounting records of Elliott Manufacturing Corp.Unfortunately,some of the data were destroyed by a computer malfunction. Selling and administrative expenses are calculated to be:

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 backup computer disk. Direct labor cost incurred during the period amounted to 1.5 times the factory overhead.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?

The following data relates to the Sunshine Company:

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

Consider the following for Premiere Tire Manufacturing: What are the cost of goods manufactured and cost of goods sold?

A portion of the costs incurred by business organizations is designated as direct labor cost.As used in practice,the term direct labor cost has a wide variety of meanings.Unless the meaning intended in a given context is clear,misunderstanding and confusion are likely to ensue.If a user does not understand the elements included in direct labor cost,erroneous interpretations of the numbers might occur and could result in poor management decisions.Measurement of direct labor costs has two aspects: (1)the quantity of labor effort that is to be included,that is,the types of hours or other units of time that are to be counted;and (2)the unit price by which each of these quantities is multiplied to arrive at a monetary cost. Required: 1)Distinguish between direct labor and indirect labor. 2)Presented below are labor cost elements that a company has been classified as direct labor,factory overhead,or either direct labor or factory overhead depending upon the situation. Direct labor -- Included in the company's direct labor are cost production efficiency bonuses and certain benefits for direct labor workers such as FICA (employer's portion),group life insurance,vacation pay,and workers' compensation insurance. Factory overhead -- The company's calculation of manufacturing overhead includes the cost of the following: wage continuation plans,the company sponsored cafeteria,the personnel department,and recreational facilities. Direct labor or factory overhead -- The costs that the company includes in this category are maintenance expense,overtime premiums,and shift premiums. Explain the reasoning used by the company in classifying the cost elements in each of the three categories.

Factory overhead costs for a given period were 1.5 times as much as the direct material costs.Prime costs totaled $15,500.Conversion costs totaled $22,725.What are the direct labor costs for the period?

Fisher,Inc.recently lost a portion of its records in an office fire.The following information was salvaged from the accounting records. Direct labor cost incurred during the period amounted to 1.5 times the factory overhead.The CFO of Fisher,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 direct materials purchased?