Exam 2: Basic Managerial Accounting Concepts

Which of the following would be an example of a direct materials cost?

Select the appropriate definition for each of the items listed below. -(direct labor + overhead)/units produced

The process of assigning an indirect cost to a cost object by using a reasonable and convenient method is called _____________.

Figure 2-5.In July, Econo Company purchased materials costing $21,000 and incurred direct labor cost of $18,000. Overhead totaled $32,000 for the month. Information on inventories was as follows: July 1 July 31 Materials \ 6,200 \ 7,100 Work in process \ 700 \ 1,200 Finished goods \ 3,300 \ 2,700 -Refer to Figure 2-5. What was the cost of goods sold for July?

Conversion cost is the sum of

Ashland Company, maker of kitchen cabinets, incurred the following costs during the current year: Required: Classify each cost as either a product or period cost.

Price must be greater than cost in order for the firm to generate revenue.

During the month of January, Enterprise Inc. had total manufacturing costs of $110,000. They incurred $40,000 of direct labor cost and $30,000 of overhead cost during the month. If the materials inventory on January 1 was $3,000 less that the materials inventory on January 31, what was the cost of materials purchased during the month?

Figure 2-6.Seaview Company took the following data from their income statement at the end of the current year. -Refer to Figure 2-6. What was the sales price per unit?

Indirect labor would include

Which of the following can be found on the income statements of both a manufacturing and service organization?

Select the appropriate definition for each of the items listed below. -A cost that increases in total as output increases

Room With A View Company manufactures curtains. Last week, direct materials costing $42,000 were put into production. Direct labor of $22,000 was incurred and overhead totaled $50,000. By the end of the week, the company had produced 12,000 curtains. Required: 1. Calculate the total prime cost for the week. 2. Calculate the per-unit prime cost. 3. Calculate the total conversion cost for the week. 4. Calculate the per-unit conversion cost.

Figure 2-7.Gateway Company produces a product with the following per-unit costs: Direct materials \ 11 Direct labor 8 Overhead 15 Last year, Gateway produced and sold 750 units at a sales price of $68 each. Total selling and administrative expense was $22,000. -Refer to Figure 2-7. Cost of goods sold last year was?

Product costs

Employees who convert direct materials into a product or who provide a service to customers are classified as indirect labor.

Overhead includes

Wapato Company produces a product with the following per unit costs. Last year, Wapato produced and sold 3,000 units at a sales price of $80 each. Total selling and administrative expenses were $25,000. Required: Solve for the following:

Figure 2-5.In July, Econo Company purchased materials costing $21,000 and incurred direct labor cost of $18,000. Overhead totaled $32,000 for the month. Information on inventories was as follows: July 1 July 31 Materials \ 6,200 \ 7,100 Work in process \ 700 \ 1,200 Finished goods \ 3,300 \ 2,700 -Refer to Figure 2-5. What was the cost of goods manufactured for July?

The Blanchett Company manufactures fishing rods. Last year, direct materials costing $516,000 were put into production. Direct labor of $430,000 was incurred and overhead equaled $645,000. The company had operating income for the year of $58,000 and manufactured and sold 86,000 fishing rods at a sales price of $21 per unit. Assume that there were no beginning or ending inventory balances in the work in process and finished goods inventory accounts. Required: