Exam 2: Building Blocks of Managerial Accounting

Makeit a start up manufacturing company's bookkeeper left suddenly leaving rather incomplete accounting records for the last month of his employment.You have been hired to sort out the puzzle.Assume Makeit's raw materials inventory contains only direct materials.You have the following information available: Find the following amounts: A.Cost of goods sold in April. B.Beginning raw materials inventory. C.Ending finished goods inventory.

Farm Supply plans to make 10,000 tractors at its plant.Fixed costs are $1,000,000 and variable costs are $500 per tractor.What is the average cost per tractor?

Which element in the value chain would contain inventoriable costs for a manufacturer?

When deciding to buy a new computer,the irrelevant cost is the

A marginal cost is the cost of making one more unit of a product.

The value chain is used by

Total variable costs

Indirect costs can be traced to specific units.

The income statements of manufacturing companies are much less complex than those of service or merchandising companies.

Paris Plastics' average fixed costs per unit will be

Which type(s)of companies prepare income statements and balance sheets?

If a company wants to determine a product's cost,they must assign only direct costs.

What is the total cost for the customer service category of the value chain at Sunnybrook Orange Groves?

Direct labour costs for Comfy Furniture Company totaled

Which of the following is calculated last before operating income can be determined for a manufacturer?

The owner of Spicy's Gourmet Popcorn is concerned because the stand has been averaging sales of only 7,500 cartons per month,the stand and staff can make 15,000 cartons of popcorn per month.The variable cost of each carton is $1.50.Monthly fixed costs are ( taxes,licenses,space rent and salaries)are $10,000.The owner wants cost information about different volumes so that he can make some operating decisions. Required: Fill in the following chart to provide Bob with the information he wants.

The owner of Willy's Wonderful Burger Stand is concerned because the stand has been averaging only 3,000 burger sales per month,the stand and staff can make 6,000 burgers per month.The variable cost of each burger ( buns,meat etc)is $2.50.Monthly fixed costs are ( taxes,licenses,space rent and salaries)are $7,500.The owner (Willy Wonderful)believes he could sell 5,000 burgers per month if he cuts the sales price from $5.00 to $4.75 per burger.How much extra profit ( above the current level)would he generate if he decreased the sales price?

What was operating income at Sunnydale Manufacturing?

You have the opportunity to attend a Leafs game either at home in Toronto against the Buffalo Sabres or in Buffalo.You can travel to the Toronto game using your weekly TTC bus pass which cost $36.00 when purchased to travel to school each week.If you attend the game in Buffalo your share of the cost of travelling with a group of friends by car will be $23.00.The cost of a ticket in Buffalo is $45.00.In Toronto you will have to acquire the ticket from a scalper at the cost of $85.00.The cost of hot dogs and beer at the Toronto game will be $60.00.The same food and beverages in Buffalo will cost $38.00.You must decide which game to attend. Required: A.Which if any of the listed costs above are not relevant to your decision? B.What are the total relevant costs of attending the game in Toronto? C.What are the total relevant costs of attending the game in Buffalo? D.What is the differential cost involved in your decision?

Explain the difference between raw materials inventory,work in process inventory,and finished goods inventory.