Exam 2: Basic Managerial Accounting Concepts

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

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

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

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?

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?

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

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

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

Into which two major functional categories are costs subdivided?

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

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

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

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?

How many inventory accounts does a typical manufacturer have?

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

Which of the following statements best describes product costs?

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

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

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?

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