Exam 18: Introduction to Managerial Accounting

Herrera,Inc,a merchandiser,sells office supplies.The following information summarizes Herrera's operating activities during the year: Utilities Expense \ 6,000 Rent for Store Expense 8,000 Sales Commissions Expense 4,500 Purchases of Merchandise 54,000 Merchandise Inventory on January 1 30,000 Merchandise Inventory on December 31 20,500 Sales Revenue 108,000 Required: Prepare an income statement for Herrera,Inc.for the year ended December 31,using the format below.Include a proper heading. Sales Revenue Cost of Goods Sold: Beginning Inventory Purchases Cost of Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Selling Expenses: Sales Commissions Expense Administrative Expenses: Rent Expense Utilities Expense Total Operating Expenses Operating Income

In a manufacturing company,wages and benefits of assembly line workers are included in manufacturing overhead.

Direct costs and indirect costs can be easily traced directly to a cost object.

In a manufacturing company,accounting,legal,and administrative costs are typical examples of product costs.

Dakota,Inc.is a merchandiser of medallions.The company sold 15,100 units during the year.The company has provided the following information: Sales Revenue \ 558,000 Purchases (excluding Freight In) 280,000 Selling and Administrative Expenses 66,000 Freight In 13,000 Beginning Merchandise Inventory 52,000 Ending Merchandise Inventory 54,900 What is the unit cost per item sold? (Round your answer to the nearest cent.)