Exam 2: Basic Cost Management Concepts

Generally, more managerial objectives can be met with an activity-based system than with a system.

Which of the following costs is NOT a product cost?

Foremost Corporation incurred the following costs: a. Direct materials used b. Cost of goods manufactured c. Cost of goods sold d. Operating income

Which of the following is a trait of an activity-based cost management system?

Figure 2-16 A small engine repair shop purchased materials costing $9,000 in July. The beginning inventory of material parts was $4,500 and the ending inventory of material parts was $4,000. Payments for direct labor for July totaled $27,000, secretarial costs were $2,000, and overhead of $5,000 was incurred. In addition, $5,000 was spent on advertising and $2,000 for the franchise name. Revenue for July was $50,000. -Refer to Figure 2-16. What is the cost of services sold for July?

Error costs can be defined as

Which of the following costs are expensed in the period in which they are incurred?

In choosing a cost management system, the controller must balance the total costs of implementing such systems. What costs must be balanced to determine total cost? How do functional-based and activity-based cost systems balance the trade-offs?

Which of the following costs would be included as part of direct labor?

Which of the following is NOT a trait of a functional-based cost management system?

Rebel Yell, Inc., recorded the following data for April:

The following information pertains to Steel Wheels, Inc:

Which of the following costs is a period cost for a manufacturing company?

Information from the records of the Maloney Company for the month of May 2016 is as follows: Inventories a. Prepare a statement of cost of goods manufactured for the month of May. b. Prepare an income statement for the month of May. c. Determine prime and conversion costs.

Which of the following expenses incurred by a department store is a direct cost for the women's shoe department?

Inventory balances for the Beemer Enterprises in April 2016 are as follows: During April, purchases of direct materials were $36,000. Direct labor and factory overhead costs were $60,000 and $84,000, respectively. Prime costs for April were

An integrated cost management system receives information from and provides information to only the controller of a company.

Cost management systems can be broadly classified as traditional or activity based.

Costs that are expensed in the period in which they are incurred are called:

Information about Mobile Enterprises for the year ending December 31, 2016, is as follows: Ending direct materials is 20 percent larger than beginning direct materials. Ending work in process is half of the beginning work in process. Ending finished goods increased by $8,000 during the year. Prime costs and conversion costs are 70 percent and 60 percent of total manufacturing costs added, respectively. Materials purchases are $113,200. Required: a. Prepare a statement of cost of goods manufactured. b. Prepare an income statement. Note: Find the numbers for the income statement first.