Exam 2: Basic Managerial Accounting Concepts

Per-unit product cost: \ 30 Gross margin percentage: 40\% Selling and admini strative expenses \ 30,000 Operating income \ 10,000 -Refer to the Figure.What was the gross margin for the year?

Awesome Adventures,which manufactures water craft,incurred the following costs during the current year. Required: Classify each cost using the table format given below: Froduct Cost Period Cost Direct Materials Direct Labour Overhead Selling Expense Administrative Expense 1. Wages of administrative office employees 2. Cost of engines 3. Factory supervisor's salary 4. Conference for marketing personnel 5. Factory security guards 6. Research and development 7. Assembly line workers 8. Head-office receptionist 9. Advertising cost 10. Cost of shipping to customers

Which of the following can be found on the income statements of both a manufacturer and a service organization?

Sales \ 1,230,000 Selling and administrative expenses 210,000 Direct materials used 300,000 Direct labour 350,000 Factory overhead 455,000 Inventories Direct materials Dec. 1 Dec. 31 Work in process \ 36,000 \ 42,000 Finished goods 75,000 84,000 Fin 69,000 57,000 -Refer to the Figure.What are the conversion costs?

Direct materials \ 40,000 Direct labour 60,000 Overhead 90,000 Selling expenses 24,000 Administrative expenses 22,000 -Refer to the Figure.What were the total product costs?

A company's beginning work-in-process inventory is $120,000,its ending work-in-process inventory is $160,000,its cost of goods manufactured is $400,000,and its direct materials used are $100,000.What are the conversion costs?

Employees who convert direct materials into a product or who provide a service to customers are classified as indirect labour.

Corby Distilleries supplied the following data at the end of the current year. Finished goods inventory, Jan 1. 12,000 Finished goods inventory, Dec. 31 7,500 Cost of goods manufactured 152,380 Sales revenue 212,000 Sales commissions 19,080 Research and development costs 15,900 Required: A. $\quad$ Calculate the cost of goods sold percent. B. $\quad$ Calculate the gross margin percent. C. $\quad$ Calculate the selling expense percent. D. $\quad$ Calculate the administrative expense percent. E. $\quad$ Calculate the operating income percent.

Describe the purpose of the three inventory accounts used by a manufacturer.

Which of the following statements best describes product costs?

Accumulating costs is the way that costs are measured and recorded.

Sales revenue \4 28,000 Cost of goods sold 205,440 Gross margin 222,560 Less: Selling expenses 81,320 Administrative expenses 72,760 Operating income \6 8,480 -Refer to the Figure.What was the operating income percentage?

January 1 December 31 Materials \ 10,000 \ 8,000 Work in Process \ 18,000 \ 17,000 Finished Goods \ 21,000 \ 16,500 -Refer to the Figure.What was the amount of cost of goods sold for the year?

Which of the following is an example of an intangible product?

Which of the following is an example of a tangible product?

What is the formula to calculate gross margin?

For external reporting purposes,product costs must be classified into only three categories.

Which of the following is an example of a period cost?

See the following separate cases. Case \#1 Case \#2 Sales \ 1,000 \ 1,300 Cost of goods manufactured 500 Finished goods inventory (beginning balance) 100 Finished goods inventory (ending balance) 150 200 Cost of goods sold 600 Gross margin 300 Selling expenses 75 Administrative expenses 50 40 Operating income 200 Required: Solve for the missing amounts (A,B,C,D,E,and F).

What is the definition of assigning costs?