Exam 2: Basic Managerial Accounting Concepts

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Prairie Plant Company supplied the following data at the end of the current year: Required: Prepare an income statement for Prairie Plant Company. Sales commissions \ 15,000 Sales revenue 150,000 Research and development 17,000 Finished goods inventory, Jan. 1 7,500 Work-in-process inventory, Jan 1 9,000 Finished goods inventory, Dec. 31 6,000 Work-in-process inventory, Dec. 31 11,000 Cost of goods manufactured 50,000

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When do materials in the raw materials account become direct materials?

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Select the appropriate definition for each of the items listed below. -A cost that can be easily traced to a cost object

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TechCom Inc. manufactures laptops. Last month, direct materials (e.g., computer components) costing $600,000 were put into production. Direct labour of $900,000 was incurred, overhead equalled $500,000, and selling and administrative costs totalled $400,000. The company manufactured 10,000 laptops during the month. Assume the company had no beginning or ending work-in-process balances. -Refer to the Figure.What was the amount of cost of goods manufactured last month?

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Ballard Company makes portable speakers. During the year Ballard manufactured 100,000 sets of portable speakers. Finished goods inventory had the following units on hand: January 1 1,260 December 31 1,040 -Refer to the Figure.How many sets of portable speakers did Ballard sell during the year?

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Which of the following would NOT be found on the income statement of a service organization?

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All product costs other than direct materials and indirect labour are called overhead.

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

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Into which two major functional categories are costs subdivided?

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Which of the following is a characteristic of price per unit?

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What is one of the main purposes of assigning costs to cost objects?

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Any costs associated with storing,selling,and delivering a product are classified as period costs.

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In July, Econo Company purchased materials costing $21,000 and incurred direct labour cost of $18,000. Overhead totalled $32,000 for the month. Information on inventories was as follows: 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.Suppose Econo Company sold 10,000 units during July and gross margin totalled $29,800.What would be the sales price per unit?

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How many inventory accounts does a typical manufacturer have?

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

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Which of the following statements best describes product costs?

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Select the appropriate classification for each of the costs incurred by a manufacturer of bicycles. -Factory security costs

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Select the appropriate definition of each of the items listed below. -The total cost of goods completed during the current period

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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 gross margin per unit?

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

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