Exam 2: An Introduction to Cost Terms and Purposes

Each of the following items pertains to one of these companies: Bedell Electronics (a manufacturing company), Gregory Food Retailers (a merchandising company), and Larson Real Estate (a service sector company).Match each item with either an inventoriable cost or a period cost. A)inventoriable B)period -salaries of frozen food personnel at Gregory Food Retailing

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

Things are not going well for the widget industry this year.The well-known cyclical nature of widget sales is in a downturn and your plant has been ordered to cut costs by its American parent corporation.The plant manager explains that he has shown the lead by negotiating a $1.50 hourly wage decrease with the production workers, based on a formula that pegs a $1.50 per hour wage increase/decrease to sales volume, and since sales are down this year, so are hourly wage costs.In the quarterly management meeting, the sales manager complained that sales could have been higher, but that somehow costs had increased, at least that's what the reports out of your office in management accounting, indicated.The Purchasing manager assured everyone that she was able to obtain raw materials at the same price as last year, and unfortunately, you as the management accountant, were not in attendance at the meeting.Your assistant, a new employee attended in your place, and promised at the meeting to redo the reports and find the errors.Your assistant has come to you as he cannot find any errors in the reports.Consequently, the plant manager wants you to redo the reports, find the error reports produced by your department for the last quarter and to explain to your boss, the plant manager, why average costs have increased.Required: Assuming there are no errors in the cost reports, explain to the plant manager how direct labour costs could be decreased and direct materials costs could be the same as last year, and yet the selling price cannot be lowered without sacrificing net income for the plant.

The following information pertains to Tom's Country Wood Shop: What is the cost of goods manufactured for 2018?

Materiality refers to the significance of the cost in question.

Anything for which a separate measurement of costs is desired is known as

The plant supervisor's salary is a direct labour cost.

Answer the following question(s)using the information below.The West Company manufactures several different products.Unit costs associated with Product ORD203 are as follows: -What are the inventoriable costs per unit associated with Product ORD203?

Use the information below to answer the following question(s).Toronto Industries Inc.had the following activities during the year: -Merchandising-sector companies

Conversion costs include all direct manufacturing costs.

Answer the following question(s)using the information below.The following information pertains to Alleigh's Mannequins: -What is the amount of gross margin?

Competition places an increased emphasis on cost reductions.For an organization to reduce costs it must focus on

A manufacturing plant produces two product lines: football equipment and hockey equipment.Direct costs for the football equipment line are the

The determination of a cost as being either direct or indirect depends upon

Classifying a cost as either direct or indirect depends upon

Nearly all accounting systems accumulate forecasted costs.

Farley Muffler Inc.received the following monthly report from its newly hired accountant, who quit after only a week on the job. Required: a.Prepare a cost of goods manufactured schedule. b.Prepare an income statement in good form.

Inventoriable costs

When 50,000 units are produced the fixed costs are $10 per unit.Therefore when 100,000 units are produced fixed costs will remain at $10 per unit.

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?