Exam 16: Cost Concepts and Cost Allocation

Identify the document needed to support each of the following activities in a manufacturing organization: __________ a. Placing an order for direct materials with a supplier __________ b. Recording direct labor time at the beginning and end of each work shift __________ c. Issuing direct materials into production __________ d. Recording the costs of a specific job requiring direct materials, direct labor, and overhead __________ e. Billing a customer for a completed order __________ __________ f. Receiving direct materials at the shipping dock

The income statement for a manufacturing company usually contains a detailed computation of the

Period costs flow through three types of inventory accounts before becoming part of the cost of goods sold amount.

Which of the following results in a predetermined overhead rate?

Because it is invisible,direct labor cannot be traced to products.

The amount for cost of goods manufactured should be the same as the amount transferred from the Work in Process Inventory account to the Finished Goods Inventory account during the year.

Which of the following represents normal cost measurement?

When the amount of underapplied or overapplied overhead is small,it usually is written off to

Which of the following is a value-adding cost?

Which of the following documents initiates the purchasing of materials?

The Finished Goods Inventory and Cost of Goods Sold for a manufacturing company for the year 20xx are as follows: January 1 Finished Goods Inventory,$382,500; December 31 Finished Goods Inventory,$270,000; Cost of Goods Sold for the year,$1,488,000.The cost of goods manufactured for the year was

As units are completed,their costs are transferred from the Work in Process Inventory account to the Finished Goods Inventory account.

The Overhead account is used to accumulate actual overhead costs.

In a manufacturing environment,direct labor costs initially flow

All labor costs can be directly traced to finished products.

Variable costs per unit change in an inversely proportional rate to changes in volume.

Costs that are identified with and traced to one product or a batch of products are called

Depreciation on factory equipment is a value-adding cost.

Fill in the missing data for Company C: Company C Direct materials used \ 6,000 Direct labor cost (a) Overhead 7,000 Total manufacturing costs 18,000 Work in process inventory, Jan. 1 2,000 Work in process inventory, Dec. 31 (b) Sales revenue 30,000 Finished goods inventory, Jan. 1 7,000 Cost of goods manufactured (c) Cost of goods available for sale 23,000 Finished goods inventory, Dec. 31 (d) Cost of goods sold 18,000 Gross margin (e) Operating expenses (f) Operating income 3,000

Which of the following should not be included in the computation of cost of goods manufactured?