Exam 2: Building Blocks of Managerial Accounting

Which of the following is characteristic of a service company?

Enter the letter of the type of company on the line in front of each statement.Letters may be used more than once or not at all. A)Service company B)Merchandising company C)Manufacturing company ____ Generally has no inventory ____ Has three types of inventory ____ Inventory consists of freight-in and the cost of the product ____ Has the highest percentage of labor costs ____ Wal-Mart is this type of company

When do inventoriable costs become expenses?

Intel Corporation makes computer chips.Intel Corporation would be classified as a:

Comfy Furniture Company manufactures furniture at its Akron,Ohio,factory.Some of its costs from the past year include: Depreciation on sales office \ 11,000 Depreciation on factory equipment \ 16,000 Factory supervisor salary \ 52,500 Sales commissions \ 23,000 Lubricants used in factory equipment \ 3,000 Insurance costs for factory \ 21,000 Wages paid to maintenance workers \ 115,000 Fabric used to upholster furniture \ 7,000 Freight-in (on raw materials) \ 2,500 Costs of delivery to customers \ 9,000 Wages paid to assembly-line workers \ 132,500 Lumber used to build product \ 72,000 Utilities in factory \ 44,500 Utilities in sales office \ 26,500 - Prime costs for Comfy Furniture Company totaled:

Selected information regarding a company's most recent quarter follows (all data in thousands). Direct labor \ 450 Bepinning wark in process inventary \ 320 Ending work in process inventory \ 310 Cost of goods manufactured \ 1,560 Manufacturing overhead \ 620 What was direct materials used for the quarter?

Differentiate between: A.Direct materials versus indirect materials B.Direct labor versus indirect labor

Which of the following would NOT be a cost object?

Paris Plastics has monthly fixed costs of $90,000,while its variable costs are $4.00 per unit.If the sales price of a unit is $16.00 and Paris Plastics sell 12,000 units,the company's total variable costs will be:

Which of the following describes full product costs for a product?

A company's distribution system is an important part of the value chain.

First Sporting Equipment manufactures sporting goods.Selected costs from the past year include: Plastics used to make products \ 151,000 Heating and lighting costs for factory \ 73,000 Factory janitor wages \ 67,000 Costs of shipping to customers \ 11,000 Lubricants used in factory equipment \ 2,000 Lighting costs for sales office \ 17,000 Depreciation on factory equipment \ 23,000 Office supplies for sales office \ 4,000 Insurance costs for factory \ 15,000 Maintenance worker wages \ 99,000 Freight-in (on plastics) \ 8,000 Aluminum used to make products \ 175,000 Assembly-line worker wages \ 142,000 Salaries of salespeople \ 84,000 -Product costs for First Sporting Equipment totaled:

Variable costs:

Manufacturing overhead costs for a product include:

Olde Tyme Beverage Company's operating activities for the year are listed below. Purcheses \ 126,000 Operating expenses 90,000 Bepinging inventory 14,000 Ending inventory 10,000 Sales revenue 250,000 -What is the gross profit for the year?

Direct labor for a company was $132,000; manufacturing overhead was $275,000; and direct materials were $253,000.Prime costs would total:

Readers Unlimited sells books.The following information summarizes the company's operating expenses for the year: Purchases \ 90,000 Operating expenses 53,000 Bepinning merchandise inventary 12,000 Ending merchandise inventory 15,000 Sales revenue 172,000 - What is gross profit?

Sunnybrook Orange Groves processes a variety of fresh juices.The company has the following expenses for July: Wages of factory workers \ 75,000 Freshness seals/caps for juice bottles \ 3,000 Reconfiguring the factory layout \ 102,000 Customer help line \ 2,000 Costs of refrigerated trucks used to deliver juice \ 17,000 Depreciation expense on bottling machines \ 63,000 Glass juice bottles \ 54,000 Commissions for salespeople \ 27,000 Salaries of nutrition researchers \ 89,000 Costs of maintaining website used for customer orders \ 4,000 What is the total cost for the customer service category of the value chain?