Exam 2: Managerial Accounting and Cost Concepts

Management of Solman Corporation has asked your help as an intern in preparing some key reports for June. The beginning balance in the raw materials inventory account was $20,000. During the month, the company made raw materials purchases amounting to $69,000. At the end of the month, the balance in the raw materials inventory account was $32,000. Direct labor cost was $24,000 and manufacturing overhead was $71,000. The beginning balance in the work in process account was $24,000 and the ending balance was $19,000. The beginning balance in the finished goods account was $53,000 and the ending balance was $58,000. Selling expense was $20,000 and administrative expense was $35,000. -The prime cost for June was:

Management of Berndt Corporation has asked your help as an intern in preparing some key reports for August. The beginning balance in the raw materials inventory account was $33,000. During the month, the company made raw materials purchases amounting to $62,000. At the end of the month, the balance in the raw materials inventory account was $30,000. Direct labor cost was $46,000 and manufacturing overhead was $74,000. The beginning balance in the work in process account was $13,000 and the ending balance was $19,000. The beginning balance in the finished goods account was $54,000 and the ending balance was $50,000. Sales totaled $270,000. Selling expense was $18,000 and administrative expense was $49,000. -The cost of goods manufactured for August was:

The Lyons Company's cost of goods manufactured was $120,000 when its sales were $360,000 and its gross margin was $220,000. If the ending inventory of finished goods was $30,000, the beginning inventory of finished goods must have been:

A number of costs and measures of activity are listed below. Required: For each item above, indicate whether the cost is MAINLY fixed or variable with respect to the possible measure of activity listed next to it.

Managerial accounting:

Management of Solman Corporation has asked your help as an intern in preparing some key reports for June. The beginning balance in the raw materials inventory account was $20,000. During the month, the company made raw materials purchases amounting to $69,000. At the end of the month, the balance in the raw materials inventory account was $32,000. Direct labor cost was $24,000 and manufacturing overhead was $71,000. The beginning balance in the work in process account was $24,000 and the ending balance was $19,000. The beginning balance in the finished goods account was $53,000 and the ending balance was $58,000. Selling expense was $20,000 and administrative expense was $35,000. -The conversion cost for June was:

Tator Corporation reported the following data for the month of April: -The cost of goods sold for April was:

A factory supervisor's salary would be classified as a direct cost of a unit of product.

Management of Sourwine Corporation is considering whether to purchase a new model 320 machine costing $389,000 or a new model 280 machine costing $318,000 to replace a machine that was purchased 6 years ago for $376,000. The old machine was used to make product C78P until it broke down last week. Unfortunately, the old machine cannot be repaired. Management has decided to buy the new model 280 machine. It has less capacity than the new model 320 machine, but its capacity is sufficient to continue making product C78P. Management also considered, but rejected, the alternative of simply dropping product C78P. If that were done, instead of investing $318,000 in the new machine, the money could be invested in a project that would return a total of $405,000. -In making the decision to invest in the model 280 machine, the opportunity cost was:

Prime cost consists of direct materials combined with:

A lawnmower manufacturer computed a cost per unit of $53 by adding together last month's direct labor, direct materials, and manufacturing overhead and dividing that total by the 10,000 units produced last month. (There were no beginning or ending inventories.) If 9,000 units are going to be manufactured this month, we would expect that the:

A partial listing of costs incurred during February at Urfer Corporation appears below: -The total of the manufacturing overhead costs listed above for February is:

A number of costs are listed below. Required: For each item above, indicate whether the cost is direct or indirect with respect to the cost object listed next to it.

During the month of August, direct labor cost totaled $13,000 and direct labor cost was 20% of prime cost. If total manufacturing costs during August were $88,000, the manufacturing overhead was:

Ruggeri Corporation reported the following data for the month of July: -The cost of goods manufactured for July was:

Management of Parrent Corporation has asked your help as an intern in preparing some key reports for April. The company started the month with raw materials inventories of $32,000. During the month, the company made raw materials purchases amounting to $68,000. At the end of the month, raw materials inventories totaled $35,000. Direct labor cost was $43,000 and manufacturing overhead was $62,000. The beginning balance in the work in process account was $19,000 and the ending balance was $12,000. The beginning balance in the finished goods account was $35,000 and the ending balance was $58,000. Sales totaled $240,000. Selling expense was $18,000 and administrative expense was $42,000. -The cost of goods manufactured for April was:

Dinius Corporation has provided the following data for the month of December: Required: Prepare a Schedule of Cost of Goods Manufactured for December.

Lucena Corporation purchased a machine 7 years ago for $339,000 when it launched product X05K. Unfortunately, this machine has broken down and cannot be repaired. The machine could be replaced by a new model 360 machine costing $353,000 or by a new model 280 machine costing $332,000. Management has decided to buy the model 280 machine. It has less capacity than the model 360 machine, but its capacity is sufficient to continue making product X05K. Management also considered, but rejected, the alternative of dropping product X05K and not replacing the old machine. If that were done, the $332,000 invested in the new machine could instead have been invested in a project that would have returned a total of $426,000. 130. In making the decision to buy the model 280 machine rather than the model 360 machine, the differential cost was: <underLine>A.</underLine> $21,000 B. $87,000 C. $7,000 D. $14,000 -In making the decision to invest in the model 280 machine, the opportunity cost was:

The following data have been provided by a company for a recent accounting period: The cost of goods manufactured for the period was:

Standford Corporation has provided the following data for the month of February: Required: a. Prepare a Schedule of Cost of Goods Manufactured in good form for February. b. Prepare an Income Statement in good form for February.