Exam 2: An Introduction to Cost Terms and Purposes

Helmer Sporting Goods Company manufactured 100,000 units in 2015 and reported the following costs: Required: a.What is the cost of direct materials used during 2015? b.What manufacturing costs were added to WIP during 2015? c.What is cost of goods manufactured for 2015? d.What is cost of goods sold for 2015?

What is the unit cost for the plant leasing cost for 2016 assuming plant leasing costs are for the production of 2,000,000 units?

Cost behaviour refers to

Factors affecting direct/indirect cost classification include all of the following EXCEPT the

Which of the following statements is TRUE?

Total variable costs change in direct proportion to changes in cost driver volume.

Service-sector companies provide services or intangible products to their customers.

Cost allocation is

Product costs used for pricing and product-mix decisions generally include

What is the unit cost for the plant leasing costs for 2016 assuming plant leasing costs are for the production of 1,014,000 units?

Manufacturing firms have three types of inventory: direct materials,work in process,and merchandise.

Product costs are the sum of the costs assigned to a product for a specific purpose.

Why is it possible that a raw material such as glue might be considered as an indirect material for one furniture manufacturer and as a direct material for another furniture manufacture?

The vice president of production has just completed the January meeting with all production department heads.Everyone is upset that the production variances for the month were unfavourable.They do not understand why everything was unfavourable.January is typically the company's lowest production month of the year. The company uses annual average unit costs for production evaluation purposes.The average costs are based on the prior year's actual performance with adjustments for any predicted changes in the coming year.Both production and economic items are considered in setting the averages for each new year. Required: Explain the problems with using average costs in evaluating production.

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 period costs per unit associated with Product ORD203?

What is the unit cost for the direct materials for 2016 assuming direct materials are for the production of 507,000 units?

When should the overtime premium of direct manufacturing labour be considered an indirect manufacturing cost? A direct manufacturing cost?

Inventoriable costs are reported as an asset when incurred and expensed on the income statement when the product is sold.

What is the meaning of the term "cost object"? Give an example of a cost object that would be used in a manufacturing company,a merchandising company,and a service sector company?

Springfield Manufacturing produces electronic storage devices,and uses the following three-part classification for its manufacturing costs: direct materials,direct manufacturing labour,and indirect manufacturing costs.Total indirect manufacturing costs for January were $300 million,and were allocated to each product on the basis of direct manufacturing labour costs of each line.Summary data for January for the most popular electronic storage device,the Big Bertha,was: Required: a.Compute the total manufacturing cost per unit for each product produced in January. b.Suppose production will be reduced to 30,000 units in February.If indirect manufacturing costs include fixed costs then explain if the total cost per unit be higher or lower than in January.