Question 1

Product costs are carried in inventory until the goods are finished.

Accepted Answer

A) True 
 B)False

Question 2

$$\begin{array} { l r } 
\text { Per-unit product cost: } & \$ 30 \
\text { Gross margin percentage: } & 40 \% \
\text { Selling and admini strative expenses } & \$ 30,000 \
\text { Operating income } & \$ 10,000
\end{array}$$
-Refer to the Figure.What was the cost of goods sold for the year?

Accepted Answer

A)  $40,000 
B)  $50,000 
C)  $60,000 
D)  $100,000 
A)  $40,000 
B)  $50,000 
C)  $60,000 
D)  $100,000

Question 3

Tamarack Company,a manufacturing firm,has supplied the following information from its accounting records for the month of June. $$\begin{array} { l r } 
\text { Direct labour cost } & \$ 12,000 \
\text { Purchases of raw materials } & 17,000 \
\text { Factory insurance } & 4,000 \
\text { Research and development } & 7,500 \
\text { Factory property taxes } & 3,000 \
\text { Sales commissions paid } & 4,500 \
\text { Work in process, June 1 } & 2,000 \
\text { Work in process, June 30 } & 2,800 \
\text { Materials inventory, June 1 } & 1,475 \
\text { Materials Inventory, June 30 } & 1,200 \
\text { Finished goods inventory, June 1 } & 2,250 \
\text { Finished goods inventory, June 30 } & 750
\end{array}$$ Required: Prepare a statement of cost of goods manufactured

Accepted Answer

The answer of Tamarack Company,a manufacturing firm,has supplied the following...

Question 4

$$\begin{array} { l r } 
\text { Direct materials } & \$ 40,000 \
\text { Direct labour } & 60,000 \
\text { Overhead } & 90,000 \
\text { Selling expenses } & 24,000 \
\text { Administrative expenses } & 22,000
\end{array}$$
-Refer to the Figure.What was the conversion cost per unit?

Accepted Answer

A)  $50 
B)  $75 
C)  $95 
D)  $125 
A)  $50 
B)  $75 
C)  $95 
D)  $125

Question 5

$\begin{array}{l}
\text { Sales revenue } &\$428,000\
\text { Cost of goods sold }&205,440\\text { Gross margin }&222,560\\text { Less: }\\text { Selling expenses }&81,320\\text { Administrative expenses }&72,760\\text { Operating income }&\$68,480
\end{array}$
-Refer to the Figure.What was the sales revenue percentage?

Accepted Answer

A)  16% 
B)  48% 
C)  52% 
D)  100% 
A)  16% 
B)  48% 
C)  52% 
D)  100%

Question 6

Production costs include direct materials,direct labour,and manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 7

Indirect costs are costs that are NOT easily and accurately traced to a cost object.

Accepted Answer

A) True 
 B)False

Question 8

Direct costs are those costs that can be easily and accurately traced to a cost object.

Accepted Answer

A) True 
 B)False

Question 9

The Stelco Company manufactures microwave ovens.Last year,the per-unit product cost was $56,the per-unit prime cost was $34,and the per-unit conversion cost was $42.Cost of goods sold for the year was $560,000,and the sale price per unit was $100.In addition,direct labour costs of $200,000 and selling and administrative expenses of $240,000 were incurred.
Required: 
A. $\quad$Calculate how many units were sold last year.
B. $\quad$Compute the cost of direct materials used.
C. $\quad$Compute the cost of overhead.
D. $\quad$Compute the gross margin for the year.
E. $\quad$Calculate operating income.

Accepted Answer

The answer of The Stelco Company manufactures microwave ovens.Last year,the...

Question 10

$$\begin{array} { l l l } 
& \text { July 1 } & \text { July } 31 \
\text { Materials } & \$ 6,200 & \$ 7,100 \
\text { Work in process } & \$ 700 & \$ 1,200 \
\text { Finished goods } & \$ 3,300 & \$ 2,700
\end{array}$$
-Refer to the Figure.What was the cost of goods sold for July?

Accepted Answer

A)  $69,600 
B)  $70,200 
C)  $71,100 
D)  $71,300 
A)  $69,600 
B)  $70,200 
C)  $71,100 
D)  $71,300

Question 11

What is characteristic of a period cost?

Accepted Answer

A)  They include selling costs and administrative costs. 
B)  They are used to compute product cost. 
C)  They can be included in overhead costs. 
D)  They are carried in inventory until the goods are sold. 
A)  They include selling costs and administrative costs. 
B)  They are used to compute product cost. 
C)  They can be included in overhead costs. 
D)  They are carried in inventory until the goods are sold.

Question 12

Explain the difference between an inventoriable cost and a non-inventoriable cost.

Accepted Answer

An inventoriable cost is a cost of manuf

Question 13

Assigning costs tells the accountant who spent the money.

Accepted Answer

A) True 
 B)False

Question 14

$$\begin{array} { l c c } 
& \text { January 1 } & \text { December } 31 \
\text { Materials } & \$ 10,000 & \$ 8,000 \
\text { Work in Process } & \$ 18,000 & \$ 17,000 \
\text { Finished Goods } & \$ 21,000 & \$ 16,500
\end{array}$$
-Refer to the Figure.What was the amount of Cost of Goods Manufactured for the year?

Accepted Answer

A)  $100,000 
B)  $101,000 
C)  $102,000 
D)  $124,000 
A)  $100,000 
B)  $101,000 
C)  $102,000 
D)  $124,000

Question 15

The Owen Sound Company manufactures fishing rods.Last year,direct materials costing $516,000 were put into production.Direct labour costs of $430,000 were incurred,and overhead equalled $645,000.The company had operating income for the year of $58,000 and manufactured and sold 86,000 fishing rods at a sales price of $21 per unit.Assume that there were no beginning or ending inventory balances in the work in process and no finished goods inventory accounts.
Required: 
A.	Compute the per-unit product cost.
B.	Compute the per-unit prime cost.
C.	Compute the per-unit conversion cost.
D.	Compute the gross margin for the year.
E.	Compute the selling and administrative expenses for the year.
F.	Assume production amounted to 86,000 fishing rods and 80,000 were sold. Compute cost of goods sold.
G.	Assume production amounted to 86,000 fishing rods and 80,000 were sold. Compute the balance in ending finished goods inventory.

Accepted Answer

The answer of The Owen Sound Company manufactures fishing rods.Last...

Question 16

$\begin{array}{lr}
\text { Direct materials } & \$ 15 \
\text { Direct labour } & 10 \
\text { Overhead } & 15
\end{array}$
-Refer to the Figure.What was the cost of goods sold last year?

Accepted Answer

A)  $14,250 
B)  $30,000 
C)  $47,500 
D)  $51,000 
A)  $14,250 
B)  $30,000 
C)  $47,500 
D)  $51,000

Product costs are carried in inventory until the goods are finished.

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 cost of goods sold for the year?

Direct materials \ 40,000 Direct labour 60,000 Overhead 90,000 Selling expenses 24,000 Administrative expenses 22,000 -Refer to the Figure.What was the conversion cost per unit?

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 sales revenue percentage?

Production costs include direct materials,direct labour,and manufacturing overhead.

Indirect costs are costs that are NOT easily and accurately traced to a cost object.

Direct costs are those costs that can be easily and accurately traced to a cost object.

July 1 July 31 Materials \ 6,200 \ 7,100 Work in process \ 700 \ 1,200 Finished goods \ 3,300 \ 2,700 -Refer to the Figure.What was the cost of goods sold for July?

What is characteristic of a period cost?

Explain the difference between an inventoriable cost and a non-inventoriable cost.

Assigning costs tells the accountant who spent the money.

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 Manufactured for the year?

Direct materials \ 15 Direct labour 10 Overhead 15 -Refer to the Figure.What was the cost of goods sold last year?

Introduction to Managerial Accounting

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

Exam 2: Basic Managerial Accounting Concepts

Product costs are carried in inventory until the goods are finished.

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 cost of goods sold for the year?

Direct materials \ 40,000 Direct labour 60,000 Overhead 90,000 Selling expenses 24,000 Administrative expenses 22,000 -Refer to the Figure.What was the conversion cost per unit?

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 sales revenue percentage?

Production costs include direct materials,direct labour,and manufacturing overhead.

Indirect costs are costs that are NOT easily and accurately traced to a cost object.

Direct costs are those costs that can be easily and accurately traced to a cost object.

July 1 July 31 Materials \ 6,200 \ 7,100 Work in process \ 700 \ 1,200 Finished goods \ 3,300 \ 2,700 -Refer to the Figure.What was the cost of goods sold for July?

What is characteristic of a period cost?

Explain the difference between an inventoriable cost and a non-inventoriable cost.

Assigning costs tells the accountant who spent the money.

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 Manufactured for the year?

Direct materials \ 15 Direct labour 10 Overhead 15 -Refer to the Figure.What was the cost of goods sold last year?

Introduction to Managerial Accounting

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters