Exam 2: An Introduction to Cost Terms and Purposes

Indirect manufacturing costs include the compensation of all manufacturing labor that can be traced to the cost object in an economically feasible way.

Outside the relevant range,variable costs,such as direct material costs ________.

For last year,Wampum Enterprises reported revenues of $420,000,cost of goods sold of $108,000,cost of goods manufactured of $101,000,and total operating costs of $70,000.Operating income for that year was ________.

Manufacturing sector firms normally hold three types of inventory: direct materials inventory,work-in-process inventory,and finished goods inventory.

Fixed costs depend on the ________.

Work-in-process inventory are goods partially worked on but not yet completed.

Wages paid to machine operators on an assembly line are classified as a ________.

Prime costs include ________.

Flyers Inc.,had the following activities during 2015: Direct materials: Beginning inventory \ 22,000 Purchases 61,600 Ending inventory 10,800 Direct manufacturing labor 18,000 Manufacturing overhead 11,500 Beginning work-in-process inventory 1,000 Ending work-in-process inventory 3,500 Beginning finished goods inventory 25,000 Ending finished goods inventory 19,000 Required: a.What is the cost of direct materials used during 2015? b.What is cost of goods manufactured for 2015? c.What is cost of goods sold for 2015? d.What amount of prime costs was added to production during 2015? e.What amount of conversion costs was added to production during 2015?

Total manufacturing costs is comprised of ________.

Operating income is sales revenue minus operating expenses.

Product cost for reimbursement under government contracts includes ________.

A cost object is anything for which a cost measurement is desired.

In the cost classification system used by manufacturing firms,assembly workers' wages would be included in ________.

The smaller the amount of a cost the more likely it is economically feasible to trace it to a particular cost object.

Cost assignment ________.

An efficient management accounting system traces direct costs and allocates indirect costs to products.

Which of the following cost is included in cost of goods sold?

During 2015,Fly High Corporation incurred manufacturing expenses of $200,000 to produce 40,000 finished units.It was determined that 35,000 units were sold by November end while 5,000 units remained in ending inventory.The storage cost for December is $0.5 per unit. Required: a.What is the cost of producing one unit? b.What is the amount that will be reported on the income statement for cost of goods sold? c.What is the cost incurred for storing the inventory?

A manufacturing plant produces two product lines: golf equipment and soccer equipment.An example of indirect cost for the soccer equipment line is the ________.