Question 1

Given the following items listed below, identify on which type(s) of business financial statements these items would normally appear , More than one selection may be included in an answer.
-Work-In-Process Inventory

Accepted Answer

A)  Service Provider 
B)  Merchandiser 
C)  Manufacturer.

Question 2

Opportunity costs

Accepted Answer

A)  can be found on the income statement as expenses. 
B)  can be found on the balance sheet as prepaid expenses. 
C)  relate to decision making but are not reported on the financial statements. 
D)  do not impact decision-making because they happened in the past.

Question 3

Given the following items listed below, identify on which type(s) of business financial statements these items would normally appear , More than one selection may be included in an answer.
-Finished Goods Inventory

Accepted Answer

A)  Service Provider 
B)  Merchandiser 
C)  Manufacturer.

Question 4

Prepare the journal entry for the following production activity for the current week: 
• Incurred $5,600 of manufacturing overhead in production of goods for utilities.
• Incurred direct labor costs of $37,200 in production of goods.
• Direct materials of $13,700 were requisitioned for production.

Accepted Answer

The answer of Prepare the journal entry for the following...

Question 5

Marco Manufacturers has a current unit selling price of $120 with a unit variable cost of $70 and total fixed costs of $60,000. At its current production level of 1,000 units, it is experiencing a net loss of $10,000. The company is trying to plan a strategy for the upcoming year that will result in a profit. It is considering the following options while maintaining the same current production of 1,000 units:
Option 1: Outsource some of its parts' production. The external unit price (unit cost) will only result in cost-savings of $20 in unit variable cost but $5,000 in fixed costs can be saved ($55,000 of fixed costs will still be incurred) 
Option 2: Move to automating most of the production, which will result in a significant cut the unit variable cost, reducing it to $40 per unit, but increasing the total fixed costs to $68,000. Using a contribution margin income statement format, determine which option appears to be the best for Marco Manufacturers. (Highest net income)

Accepted Answer

The answer of Marco Manufacturers has a current unit selling...

Question 6

Using vertical analysis for the income statement, the base, set at 100%, is

Accepted Answer

A)  total operating expenses. 
B)  net income. 
C)  operating income. 
D)  total revenues.

Question 7

If all units produced are sold during a period for a business, then the total expenses on a traditional income statement compared to those presented on a contribution margin income statement

Accepted Answer

A)  are equal. 
B)  are greater. 
C)  are lower. 
D)  vary with the amount of sales.

Question 8

DeLino Distribution has the following cost data provided in the table below for the month of March:  Additional information related to the company's Inventory is provided below:  Compute the Cost of Goods Manufactured and Cost of Goods Sold for Delino Distribution for the month of March.

Accepted Answer

The answer of DeLino Distribution has the following cost data...

Question 9

Which of the following is not an expense?

Accepted Answer

A)  Salaries and payroll-related 
B)  Depreciation 
C)  Marketing and selling 
D)  Inventory

Question 10

MCG Industries has the following sales and cost data per unit at current production of 10,000 units:  If MCG Industries was able to increase production to 20,000 units without having to add extra capacity, what will the total costs be for the company?

Accepted Answer

A)  $145,000 
B)  $196,000 
C)  $239,000 
D)  $290,000

Question 11

Copper Creek Nursery purchases annual and perennial plants from Commercial Landscapers. If the nursery purchases at least 3,000 plants, the cost per annual plant is $1.50 and the cost per perennial plant is $2.00. If 3,001 or more plants are purchased, then a bulk discount of 20% is given for the entire purchase. If Copper Creek purchases 3,000 annual plants and 2,000 perennial plants, what will be the total variable cost of the plants purchased?

Accepted Answer

A)  $6,800 
B)  $7,000 
C)  $7,600 
D)  $8,500

Question 12

Explain how variable costs and fixed costs can be graphed in conjunction with revenues to reflect profit, loss and the breakeven point.

Accepted Answer

The answer of Explain how variable costs and fixed costs...

Question 13

What are the three different types of Inventory for a manufacturer, and explain what each of them includes?

Accepted Answer

The answer of What are the three different types of...

Question 14

Define prime costs and conversion costs as they relate to product costs.

Accepted Answer

The answer of Define prime costs and conversion costs as...

Question 15

Yogo Factory reports the following costs and expenses for the month of August  What is the total "Manufacturing Overhead" for Yogo Factory for August?

Accepted Answer

The answer of Yogo Factory reports the following costs and...

Question 16

Which of the following is a true statement about the definition of costs?

Accepted Answer

A)  An expense is the same as a cost. 
B)  Noncash charges are not costs since no cash is paid. 
C)  A cost can be an asset or an expense. 
D)  Costs that have future benefit are expensed on the income statement.

Question 17

Given the following information for C & J, Inc. identify where the items will be classified (asset or expense, or not reported) and on which financial statement the items will reported (income statement, balance sheet, or N/A).

Accepted Answer

The answer of Given the following information for C &...

Question 18

Sierra Ski, Inc. reported the following costs and expenses for the month of January:  What are the amounts for "Prime Costs" and "Conversion Costs" for Sierra Ski, Inc. for January?

Accepted Answer

The answer of Sierra Ski, Inc. reported the following costs...

Question 19

TMZ Transportation purchased a truck 5 years ago at a cost of $98,000. The truck has been depreciated on an annual basis using straight-line depreciation. The truck had new tires installed 2 years ago at a total cost of $1,200 and had an engine overhaul last year, which cost $5,000. It is expected that the truck will need additional repairs of $3,000 in the current year. Because of these repair and upgrade costs, the company is now considering a purchase of a new truck to replace the old one. The old truck has a trade-in/sale value of $13,000. The cost of the new truck is $102,000. What amount of these costs represent sunk costs?

Accepted Answer

The answer of TMZ Transportation purchased a truck 5 years...

Question 20

Which of the following statements regarding expenses and costs is correct?

Accepted Answer

A)  Costs and expenses are the same for accounting and reporting purposes. 
B)  Costs are reported on the income statement or the balance sheet, and expenses are reported only on the income statement. 
C)  Costs are reported on the income statement, and expenses are reported on the balance sheet. 
D)  An expense has remaining future benefit while a cost will never have future benefit.

Exam 2: Refresher on Cost Terms Road Map

Given the following items listed below, identify on which type(s) of business financial statements these items would normally appear , More than one selection may be included in an answer. -Work-In-Process Inventory

Opportunity costs

Given the following items listed below, identify on which type(s) of business financial statements these items would normally appear , More than one selection may be included in an answer. -Finished Goods Inventory

Using vertical analysis for the income statement, the base, set at 100%, is

If all units produced are sold during a period for a business, then the total expenses on a traditional income statement compared to those presented on a contribution margin income statement

DeLino Distribution has the following cost data provided in the table below for the month of March: Additional information related to the company's Inventory is provided below: Compute the Cost of Goods Manufactured and Cost of Goods Sold for Delino Distribution for the month of March.