Question 1

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Factory assembly line worker's wages

Accepted Answer

A) Product Cost, Direct Material 
B) Product Cost, Direct Labour 
C) Product Cost, Manufacturing Overhead 
D) Product Cost, Selling Expense 
E) Product Cost, Administrative Expense
F)Period Cost, Direct Material
G)Period Cost, Direct Labour
H)Period Cost, Manufacturing Overhead
I)Period Cost, Selling Expense
J)Period Cost, Administrative Expense

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Econo Company
In July, Econo Company purchased materials costing $21,000 and incurred direct labour cost of $18,000. Manufacturing overhead totalled $32,000 for the month. Information on inventories was as follows: $\begin{array}{lrr}&\text { July } 1& \text { July } 31\
\text { Materials } & \$ 6,200 & \$ 7,100 \
\text { Work-in-process } & \$ 700 & \$ 1,200 \
\text { Finished goods } & \$ 3,300 & \$ 2,700
\end{array}$
-Refer to Econo Company. What was the cost of goods sold for July?

Accepted Answer

A)  $69,600 
B)  $70,200 
C)  $71,100 
D)  $71,300

Question 4

Period costs are those costs associated with the manufacture of goods or the providing of services over a period of time.

Accepted Answer

A) True 
 B)False

Question 5

Sales price must be greater than cost in order for the firm to generate a profit.

Accepted Answer

A) True 
 B)False

Question 6

Becker Corporation
Information from the records of Becker Corporation for December is as follows: $\begin{array}{lr}
\text { Sales } & \$ 1,230,000 \
\text { Selling and administrative expenses } & 210,000 \
\text { Direct materials used } & 300,000 \
\text { Direct labour } & 350,000 \
\text { Manufacturing overhead } & 455,000
\end{array}$

$\text { Inventories }$
$\begin{array}{lrr}
 & \text { Dec. } 1 & \text { Dec. } 31 \
\text { Direct materials }& \$ 36,000 & \$ 42,000 \
\text { Work-in-process } & 75,000 & 84,000 \
\text { Finished goods } & 69,000 & 57,000
\end{array}$
-Refer to Becker Corporation . What are the prime costs?

Accepted Answer

A)  $564,000 
B)  $650,000 
C)  $805,000 
D)  $969,000

Question 7

Econo Company
In July, Econo Company purchased materials costing $21,000 and incurred direct labour cost of $18,000. Manufacturing overhead totalled $32,000 for the month. Information on inventories was as follows: $\begin{array}{lrr}&\text { July } 1& \text { July } 31\
\text { Materials } & \$ 6,200 & \$ 7,100 \
\text { Work-in-process } & \$ 700 & \$ 1,200 \
\text { Finished goods } & \$ 3,300 & \$ 2,700
\end{array}$
-Refer to Quest Company. What was the gross margin per unit?

Accepted Answer

A)  $7 
B)  $30 
C)  $95 
D)  $125

Question 8

Refer to ComPrint Co. What was the operating income or loss for the year?

Accepted Answer

A)  $(3,500) 
B)  $5,500 
C)  $18,500 
D)  $125,000

Question 9

What can generally be found on the income statements of both a manufacturer and a service organization?

Accepted Answer

A)  cash 
B)  cost of goods sold 
C)  accumulated amortization 
D)  selling and administrative expenses

Question 10

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Fees paid to the radio station for advertising

Accepted Answer

A) Product Cost, Direct Material 
B) Product Cost, Direct Labour 
C) Product Cost, Manufacturing Overhead 
D) Product Cost, Selling Expense 
E) Product Cost, Administrative Expense
F)Period Cost, Direct Material
G)Period Cost, Direct Labour
H)Period Cost, Manufacturing Overhead
I)Period Cost, Selling Expense
J)Period Cost, Administrative Expense

Question 11

Match each of the following terms with their correct description from the items listed below.
-(direct materials + direct labour + manufacturing overhead) +/- the change in work-in-process inventory from the beginning to the end of the current period

Accepted Answer

A) Work-in-Process Inventory 
B) Finished Goods Inventory 
C) Cost of Goods Sold 
D) Cost of Goods Manufactured 
E) Total Manufacturing Costs

Question 12

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Depreciation on furniture in the factory lunchroom

Accepted Answer

A) Product Cost, Direct Material 
B) Product Cost, Direct Labour 
C) Product Cost, Manufacturing Overhead 
D) Product Cost, Selling Expense 
E) Product Cost, Administrative Expense
F)Period Cost, Direct Material
G)Period Cost, Direct Labour
H)Period Cost, Manufacturing Overhead
I)Period Cost, Selling Expense
J)Period Cost, Administrative Expense

Question 13

As costs are used up in the production of revenues, they are said to expire. Expired costs are called expenses.

Accepted Answer

A) True 
 B)False

Question 14

Costs incurred to produce future benefits would generally be categorized as liabilities.

Accepted Answer

A) True 
 B)False

Question 15

How is prime cost calculated?

Accepted Answer

A)  direct materials cost plus direct labour cost 
B)  indirect materials cost plus indirect labour cost 
C)  direct labour cost plus manufacturing overhead cost 
D)  direct material cost plus manufacturing overhead cost

Question 16

Allied Company showed the following costs for last month.
Direct materials $40,000
Direct labour 35,000
Manufacturing overhead 52,000
Selling expense 17,000
Administrative expense 12,000
Last month, Allied produced and sold 20,000 units at a sales price per unit of $18. Assume no beginning or ending inventory balances for work-in-process and finished goods inventory.
Required: Solve for the following amounts.
A. total product cost for last month
B. unit product cost for last month
C. total period costs
D. gross margin for last month
E. operating income for last month

Accepted Answer

The answer of Allied Company showed the following costs for...

Question 17

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Property taxes on the factory building

Accepted Answer

A) Product Cost, Direct Material 
B) Product Cost, Direct Labour 
C) Product Cost, Manufacturing Overhead 
D) Product Cost, Selling Expense 
E) Product Cost, Administrative Expense
F)Period Cost, Direct Material
G)Period Cost, Direct Labour
H)Period Cost, Manufacturing Overhead
I)Period Cost, Selling Expense
J)Period Cost, Administrative Expense

Question 18

Which labour cost is included in indirect labour?

Accepted Answer

A)  the salary of the CEO 
B)  the salary of the factory supervisor 
C)  the wages of the production line worker 
D)  the salary of the vice-president of marketing

Question 19

Blue Water Inc. had a gross margin for the month of February totalling $92,000. The company sold 6,000 units during the month at a sales price of $30 per unit. What was the amount of cost of goods sold for the month?

Accepted Answer

A)  $42,000 
B)  $88,000 
C)  $100,000 
D)  $158,000

Question 20

Research and development costs would generally be classified as manufacturing costs.

Accepted Answer

A) True 
 B)False

Exam 2: Basic Managerial Accounting Concepts

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Factory assembly line worker's wages

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

Period costs are those costs associated with the manufacture of goods or the providing of services over a period of time.

Sales price must be greater than cost in order for the firm to generate a profit.

Refer to ComPrint Co. What was the operating income or loss for the year?

What can generally be found on the income statements of both a manufacturer and a service organization?

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Fees paid to the radio station for advertising

Match each of the following terms with their correct description from the items listed below. -(direct materials + direct labour + manufacturing overhead) +/- the change in work-in-process inventory from the beginning to the end of the current period

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Depreciation on furniture in the factory lunchroom

As costs are used up in the production of revenues, they are said to expire. Expired costs are called expenses.

Costs incurred to produce future benefits would generally be categorized as liabilities.

How is prime cost calculated?

Select the appropriate classification of each of the costs listed below.Each classification may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Property taxes on the factory building

Which labour cost is included in indirect labour?

Blue Water Inc. had a gross margin for the month of February totalling $92,000. The company sold 6,000 units during the month at a sales price of $30 per unit. What was the amount of cost of goods sold for the month?

Research and development costs would generally be classified as manufacturing costs.