Pederson Company reported the following: $\begin{array}{ll} \text { Manufacturing costs } & \$ 2,000,000 \\ \text { Units manufactured } & 50,000 \\ \text { Units sold } & 47,000 \text { units sold for } \$ 75 \text { per unit } \\ \text { Beginning inventory } & 0 \text { units } \end{array}$ What is the amount of gross profit margin?

A) $1,750,000 B) $3,525,000 C) $5,405,000 D) $1,645,000 A) $1,750,000 B) $3,525,000 C) $5,405,000 D) $1,645,000

Answer the following questions using the information below: Zephyr Apparels is a clothing retailer. Unit costs associated with one of its products, Product DCT121, are as follows: \[\begin{array} { l r } \text { Direct materials } & \$ 70 \\ \text { Direct manufacturing labor } & 20 \\ \text { Variable manufacturing overhead } & 15 \\ \text { Fixed manufacturing overhead } & 32 \\ \text { Sales commissions ( } 2 \% \text { of sales) } & 5 \\ \text { Administrative salaries } & 16 \\ \quad \text { Total } & \$ 158 \end{array}\] -What are the indirect nonmanufacturing variable costs per unit associated with Product DCT121?

A) $5 B) $21 C) $90 D) $142 A) $5 B) $21 C) $90 D) $142

The list of representative cost drivers in the right column below are randomized with respect to the list of functions in the left column.That is,they do not match. \[\begin{array} { | l | l | l | l | } \hline & \text { Function } & & \text { Representative Cost Driver } \\ \hline 1 . & \text { Purchasing } & \text { A. } & \text { Number of employees } \\ \hline 2 . & \text { Billing } & \text { B. } & \text { Number of shipments } \\ \hline 3 . & \text { Shipping } & \text { C. } & \text { Number of customers } \\ \hline 4 . & \text { Computer Support } & \text { D. } & \text { Number of invoices } \\ \hline 5 . & \text { Personnel } & \text { E. } & \text { Number of desktop computers } \\ \hline 6 . & \text { Customer Service } & \text { F. } & \text { Number of purchase orders } \\ \hline \end{array}\] Required: Match each business function with its representative cost driver. \[\begin{array} { | l | l | l | } \hline & \text { Function } & \text { Insert letter of appropriate driver (A through F) } \\ \hline 1 . & \text { Purchasing } & \\ \hline 2 . & \text { Billing } & \\ \hline 3 . & \text { Shipping } & \\ \hline 4 . & \text { Computer Support } & \\ \hline 5 . & \text { Personnel } & \\ \hline 6 . & \text { Customer Service } & \\ \hline \end{array}\]

The answer of The list of representative cost drivers in...

Answer the following questions using the information below: Zephyr Apparels is a clothing retailer. Unit costs associated with one of its products, Product DCT121, are as follows: $\begin{array}{lr} \text { Direct materials } & \$ 70 \\ \text { Direct manufacturing labor } & 20 \\ \text { Variable manufacturing overhead } & 15 \\ \text { Fixed manufacturing overhead } & 32 \\ \text { Sales commissions (2\% of sales) } & 5 \\ \text { Administrative salaries } & 16 \\ \quad \text { Total } & \$ 158 \end{array}$ -What are the inventoriable costs per unit associated with Product DCT121?

A) $137 B) $140 C) $143 D) $88 A) $137 B) $140 C) $143 D) $88

Leslie Manufacturing reported the following: \[\begin{array} { | l | r | } \hline\text { Revenue } & \$ 450,000 \\ \hline \text { Beginning inventory of direct materials, January 1, 2015 } & 20,000 \\ \hline \text { Purchases of direct materials } & 156,000 \\ \hline \text { Ending inventory of direct materials, December 31, 2015 } & 18,000 \\ \hline \text { Direct manufacturing labor } & 21,000 \\ \hline \text { Indirect manufacturing costs } & 42,000 \\ \hline \text { Beginning inventory of finished goods, January 1, 2015 } & 40,000 \\ \hline \text { Cost of goods manufactured } & 114,000 \\ \hline \text { Ending inventory of finished goods, December 31, 2015 } & 45,000 \\ \hline \text { Operating costs } & 150,000 \\ \hline \end{array}\] What is Leslie's operating income?

A) $186,000 B) $128,000 C) $177,000 D) $191,000 A) $186,000 B) $128,000 C) $177,000 D) $191,000

Helmer Sporting Goods Company manufactured 100,000 units in 2015 and reported the following costs: \[\begin{array} { l r l r } \text { Sandpaper } & \$ 32,000 & \text { Leasing costs-plant } & \$ 384,000 \\ \text { Materials handling } & 320,000 & \text { Depreciation-quipment } & 224,000 \\ \text { Coolants \& lubricants } & 22,400 & \text { Property taxes-equipment } & 32,000 \\ \text { Indirect manufacturing labor } & 275,200 & \text { Fire insurance-equipment } & 16,000 \\ \text { Direct manufacturing labor } & 2,176,000 & \text { Direct material purchases } & 3,136,000 \\ \text { Direct materials, } 1 / 1 / 15 & 384,000 & \text { Direct materials, } 12 / 31 / 15 & 275,200 \\ \text { Finished goods, } 1 / 1 / 15 & 672,000 & \text { Sales revenue } & 12,800,000 \\ \text { Finished goods, } 12 / 31 / 15 & 1,280,000 & \text { Sales commissions } & 640,000 \\ \text { Work-in-process, } 1 / 1 / 15 & 96,000 & \text { Sales salaries } & 576,000 \\ \text { Work-in-process, } 12 / 31 / 15 & 64,000 & \text { Advertising costs } & 480,000 \\ & & \text { Administration costs } & 800,000 \end{array}\] Required: a.What is the amount 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?

a.$384,000 + $3,136,000 - $275,200 = $3,

Exam 2: An Introduction to Cost Terms and Purposes

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. Direct Indirect Fixed Variable Assembly line labor wages \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ Plant manager's wages \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ Depreciation on the assembly line equipment \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ Component parts for the product \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_ Wages of security personnel for the factory \_\_\_\_ \_\_\_\_ \_\_\_\_ \_\_\_\_

(Essay)

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Question 141

An actual cost is ________.

(Multiple Choice)

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Question 142

A company is considering buying a product at $15 per unit,the in-house manufacturing of the same product is $17.The fixed cost per unit is $3 is included in the $17 in-house product manufacturing cost.What should the company do in this scenario?

(Essay)

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Question 143

Which of the following is a period cost?

(Multiple Choice)

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Question 144

Cost of goods sold refers to the products brought to completion,whether they were started before or during the current accounting period.

(True/False)

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Question 145

Pederson Company reported the following: Manufacturing costs \ 2,000,000 Units manufactured 50,000 Units sold 47,000 units sold for \ 75 per unit Beginning inventory 0 units What is the amount of gross profit margin?

(Multiple Choice)

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Question 146

Cost allocation is ________.

(Multiple Choice)

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Question 147

Answer the following questions using the information below: Zephyr Apparels is a clothing retailer. Unit costs associated with one of its products, Product DCT121, are as follows: Direct materials \ 70 Direct manufacturing labor 20 Variable manufacturing overhead 15 Fixed manufacturing overhead 32 Sales commissions ( 2\% of sales) 5 Administrative salaries 16 Total \ 158 -What are the indirect nonmanufacturing variable costs per unit associated with Product DCT121?

(Multiple Choice)

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Question 148

A unit cost is also called an average cost.

(True/False)

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Question 149

The broader the cost object definition,higher the proportion of direct costs are of total costs.

(True/False)

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Question 150

The list of representative cost drivers in the right column below are randomized with respect to the list of functions in the left column.That is,they do not match. Function Representative Cost Driver 1. Purchasing A. Number of employees 2. Billing B. Number of shipments 3. Shipping C. Number of customers 4. Computer Support D. Number of invoices 5. Personnel E. Number of desktop computers 6. Customer Service F. Number of purchase orders Required: Match each business function with its representative cost driver. Function Insert letter of appropriate driver (A through F) 1. Purchasing 2. Billing 3. Shipping 4. Computer Support 5. Personnel 6. Customer Service

(Essay)

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Question 151

Answer the following questions using the information below: Zephyr Apparels is a clothing retailer. Unit costs associated with one of its products, Product DCT121, are as follows: Direct materials \ 70 Direct manufacturing labor 20 Variable manufacturing overhead 15 Fixed manufacturing overhead 32 Sales commissions (2\% of sales) 5 Administrative salaries 16 Total \ 158 -What are the inventoriable costs per unit associated with Product DCT121?

(Multiple Choice)

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Question 152

Lucas Manufacturing has three cost objects that it uses to accumulate costs for its manufacturing plants.They are: Cost object \#1: The physical buildings and equipment Cost object \#2: The use of buildings and equipment Cost object \#3: The availability and use of manufacturing labor The following manufacturing overhead cost categories are found in the accounting records: a. Depreciation on buildings and equipment b. Lubricants for machines c. Property insurance d. Supervisors salaries e. Fringe benefits f. Property taxes g. Utilities Required: Assign each of the above costs to the most appropriate cost object.

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Question 153

Leslie Manufacturing reported the following: Revenue \ 450,000 Beginning inventory of direct materials, January 1, 2015 20,000 Purchases of direct materials 156,000 Ending inventory of direct materials, December 31, 2015 18,000 Direct manufacturing labor 21,000 Indirect manufacturing costs 42,000 Beginning inventory of finished goods, January 1, 2015 40,000 Cost of goods manufactured 114,000 Ending inventory of finished goods, December 31, 2015 45,000 Operating costs 150,000 What is Leslie's operating income?

(Multiple Choice)

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Question 154

Helmer Sporting Goods Company manufactured 100,000 units in 2015 and reported the following costs: Sandpaper \ 32,000 Leasing costs-plant \ 384,000 Materials handling 320,000 Depreciation-quipment 224,000 Coolants \& lubricants 22,400 Property taxes-equipment 32,000 Indirect manufacturing labor 275,200 Fire insurance-equipment 16,000 Direct manufacturing labor 2,176,000 Direct material purchases 3,136,000 Direct materials, 1/1/15 384,000 Direct materials, 12/31/15 275,200 Finished goods, 1/1/15 672,000 Sales revenue 12,800,000 Finished goods, 12/31/15 1,280,000 Sales commissions 640,000 Work-in-process, 1/1/15 96,000 Sales salaries 576,000 Work-in-process, 12/31/15 64,000 Advertising costs 480,000 Administration costs 800,000 Required: a.What is the amount 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?

(Essay)

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Question 155

The income statement of a service-sector firm reports ________.

(Multiple Choice)

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Question 156

The cost of electricity used in the production of multiple products would be classified as a indirect cost.

(True/False)

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Question 157

Dave Rigby is paid $30 an hour for straight-time and $40 an hour for overtime.One week he worked 45 hours,which included 5 hours of overtime,and 3 hours of idle time caused by material shortages.What is the direct labor cost incurred to the company?

(Multiple Choice)

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Question 158

For merchandising companies,inventoriable costs include ________.

(Multiple Choice)

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Question 159

An appropriate cost driver for shipping costs might be the number of units shipped.

(True/False)

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Question 160

An actual cost is ________.

A company is considering buying a product at $15 per unit,the in-house manufacturing of the same product is $17.The fixed cost per unit is $3 is included in the $17 in-house product manufacturing cost.What should the company do in this scenario?

Which of the following is a period cost?

Cost of goods sold refers to the products brought to completion,whether they were started before or during the current accounting period.

Pederson Company reported the following: Manufacturing costs \ 2,000,000 Units manufactured 50,000 Units sold 47,000 units sold for \ 75 per unit Beginning inventory 0 units What is the amount of gross profit margin?

Cost allocation is ________.

A unit cost is also called an average cost.

The broader the cost object definition,higher the proportion of direct costs are of total costs.

The income statement of a service-sector firm reports ________.

The cost of electricity used in the production of multiple products would be classified as a indirect cost.

Dave Rigby is paid $30 an hour for straight-time and $40 an hour for overtime.One week he worked 45 hours,which included 5 hours of overtime,and 3 hours of idle time caused by material shortages.What is the direct labor cost incurred to the company?

For merchandising companies,inventoriable costs include ________.

An appropriate cost driver for shipping costs might be the number of units shipped.

The Manager and Management Accounting

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

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