Exam 2: An Introduction to Cost Terms and Purposes

Use the information below to answer the following question(s). Macadamia Co. produced and sold 40,000 units last year. Per unit revenue and costs were as follows: Fixed manufacturing overhead and administrative salaries are fixed costs. The per unit amounts are based on last year's production. -Calculate this year's operating income if the company plans to produce and sell 60,000 units.

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

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

Cost tracing is

Use the information below to answer the following question(s). Consider the following data of the Vancouver Company for the year 20X4: -What is the unit cost for the plant leasing cost for 20x4 assuming plant leasing costs are for the production of 2,000,000 units?

A firm's strategy and mission are usually the same.

Wheel and Tire Manufacturing currently produces 1,000 tires per month. The following per unit data apply for sales to regular customers: The plant has capacity for 3,000 tires and is considering expanding production to 2,000 tires. What is the total cost of producing 2,000 tires?

Christi Manufacturing provided the following information for last month: If sales double next month, what is the projected operating income?

Ames Power Point had sales in October of $28,000,000 for its three stores in Toronto. The beginning merchandise inventories for October and November were $5,000,000 and $4,000,000, respectively. October purchases totalled $19,000,000. All sales are on account (terms 2/15, net 30 days) and are collected 50 percent in the month of the sale and 50 percent in the following month. One-half of all sales discounts are taken for a total of $265,000. September sales totalled $25,000,000 while November sales were $30,000,000. Additional information for October is as follows: Required: Using an appropriately formatted income statement, determine the operating income of the company.

Conversion costs are all manufacturing costs other than direct materials.

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

Whippany manufacturing wants to estimate costs for each product they produce at its Troy plant. The Troy plant produces three products at this plant, and runs two flexible assembly lines. Each assembly line can produce all three products. Required: a. Classify each of the following costs as either direct or indirect for each product. b. Classify each of the following costs as either fixed or variable with respect to the number of units produced of each product.

Use the information below to answer the following question(s). Montreal Industries Inc. had the following activities during the year:: -What is Montreal's cost of direct materials used during the year?

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

Big Bird Pet Store had the following financial activities for June. Revenue was $860,000 with cost of goods sold equalling $440,000. Salaries and wages of all employees were $100,000. Fringe benefits were 15 percent of salaries and wages. Rent on the building was $100,000 and equipment amortization was $46,000. Office supplies and utilities totalled $28,000. Income taxes withheld from employees totalled $46,000 for the month while ending accounts payable were $24,680. Cash flows from accounts receivable totalled $880,000. Required: Using an income statement format, determine the operating income of the store.

Overtime premium consists of wages paid to all workers in excess of their straight-time wage rates.

Prime costs can include

Assigning direct costs poses more problems than assigning indirect costs.

Cost tracing assigns indirect costs to the chosen cost object.

Use the information below to answer the following question(s). The following information pertains to Payton's Shoe Manufacturing: 99,500 pairs of shoes are sold during the year for $18. -What is the amount of Payton's gross profit?