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Exam 2: Cost Terms, Concepts, and Classifications

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Question 1

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The following costs relate to one month's activity in Martin Company: Required: (a. )Prepare a schedule of cost of goods manufactured in good form. (b. )Determine the cost of goods sold. (c. )Assume Martin Company produced the equivalent of 500 units during this particular month.What was the average cost per unit for direct materials? For rent on factory building? (d. )Assume next month Martin Company plans to produce 600 units of product.What average cost per unit and total cost would you expect to be incurred for direct material?,for rent?

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c.Direct material $1,200/500 units = $...

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Question 2

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What was the net income (in thousands of dollars) for the year?

A) $410.
B) $110.
C) $40.
D) $180.= 910 - (130 + 520 - 150) - 160 - 140 = $110

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Question 3

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Assuming that cost of goods sold for Boardman Company for January was $140,000,what was the cost of goods manufactured for the month?

Which of the following is Boardman Company's total conversion cost for January?

What was the manufacturing overhead cost for the year?

Property taxes and insurance premiums paid on a factory building are examples of manufacturing overhead.

What would be the classification of the transportation costs incurred by a manufacturing company to ship its product to its customers?

On a per unit basis,a fixed cost varies inversely with the level of activity.

The beginning balance of the raw materials inventory account for May was $27,500.The ending balance for May was $28,750,and $128,900 of raw materials were used during the month.What was the cost of the materials purchased during the month?

What was the cost of the raw materials used in production (in thousands of dollars) during the year?

Some companies classify labour fringe benefits for direct labour workers as part of the direct labour cost and some classify these costs as manufacturing overhead.

Rossiter Company failed to record a credit sale at the end of the year,although the reduction in finished goods inventories was correctly recorded when the goods were shipped to the customer.Which one of the following statements is correct?

Which one of the following costs should NOT be considered a direct cost of serving a particular customer who orders a customized personal computer by phone directly from the manufacturer?

The Target store in your home town is one of many Target department stores across the province.Some of the costs associated with the store in your home town last month appear below: The Shoe Department is one of many departments in the home town store.The direct costs of the Shoe Department total:

Last month,when 10,000 units of a product were manufactured,the cost per unit was $60.At this level of activity,variable costs were 50% of total unit costs.If 10,500 units are manufactured next month and cost behaviour patterns remain unchanged,how will costs be affected?

The following information is from Marchant Manufacturing Co.for September: Required: (a. )Compute the cost of goods sold. (b. )Compute the balance in finished goods inventory at September 30. (c. )Compute the balance in work-in-process inventory at September 30. (d. )Compute the balance in raw materials inventory at September 30. (e. )Compute the total manufacturing overhead. (Hint: The easiest method of solving this problem is to sketch out the income statement and the schedule of cost of goods manufactured,enter the given amounts,and then enter the unknowns as plug figures. )

How would the wages of factory maintenance personnel usually be classified?

In a manufacturing company,goods available for sale equals the sum of the cost of goods manufactured and the beginning finished goods inventory.

As goods are completed their cost is transferred from the Work in Process account to the Finished Goods account where they await sale to customer.

Micro Computer Company has set up a toll-free telephone line for customer inquiries regarding computer hardware produced by the company.How would the cost of this toll-free line be classified?