Exam 2: Basic Managerial Accounting Concepts

An opportunity cost is the benefit given up or sacrificed when one alternative is chosen over another.

Services are intangible and perishable.

Select the appropriate classification for each of the costs incurred by a manufacturer of bicycles. -Cost of rims

What three categories separate the expenses on a manufacturer's income statement?

A fixed cost is a cost that does NOT increase in total as output increases and does NOT decrease in total as output decreases.

Global Inc.manufactured 6,000 units during the month of April and incurred a direct materials cost of $110,000 and an overhead cost of $50,000.Suppose the per-unit prime cost was $30.00 per unit.How much direct labour cost did Global incur during April?

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

Katz Group had the following income statement for the month of May. 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?

Cost of goods manufactured represents the cost of direct materials,direct labour,and overhead incurred during the current accounting period.

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

Select the appropriate classification for each of the items listed below. -Fees paid to an accounting firm for annual audit

Which of the following would be found on the balance sheet of a manufacturer?

Select the appropriate classification for each of the costs incurred by a manufacturer of bicycles. -Depreciation of vehicles used by sales personnel

A cost object is any item for which costs are measured and assigned.

Select the appropriate classification for each of the following costs. -Plant manager's salary

List and describe the three categories of manufacturing costs.

Last year Quest Company incurred the following costs: Quest produced and sold 2,000 units at a sales price of $125 each. Assume that beginning and ending inventories of materials, work in process, and finished goods were 0. 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?

Select the appropriate item for each of the definitions listed below. -Marketing and distributing costs

Selected data concerning the past year's operations of the Intelligent Creatures Corporation are as follows: What is the cost of direct materials purchased? Selling and administrative expenses \ 225,000 Direct materials used 397,500 Direct labour 450,000 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Inventories }$ Dec. Dec. 31 Direct materials \ 36,000 \ 42,000 Work in process 75,000 84,000 Finished goods 69,000 57,000

What is the definition of cost of goods manufactured?