Chap 002 Lanen

Chapter002CostConceptsandBehavior
True/FalseQuestions
1.Thecostofanitemisthesacrificemadetoacquireit.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:1
2.Acostcaneitherbeanassetoranexpense.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:1
3.Anexpenseisanexpiredcostmatchedwithrevenuesinaspecificaccountingperiod.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:1
4.Anassetisacostmatchedwithrevenuesinafutureaccountingperiod.
TRUE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:1
2-1
5.Ingeneral,thetermexpenseisusedformanagerialpurposes,whilethetermcostrefersto
externalfinancialreports.
FALSE
AACSB:Analytic
Difficulty:Simple
LearningObjective:1
2-2
6.Accountingsystemstypicallyrecordopportunitycostsasassetsandtreatthemasintangible
itemsonthefinancialstatements.
FALSE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:1
7.Outlaycostscanbepastorpresentcashoutflows,butnotfuturecashoutflows.
FALSE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:1
8.Anopportunitycostisthebenefitforgonebyselectingonealternativeoveranother
alternative.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:1
9.Operatingincomeisreportednetofapplicableincometaxeffects.
FALSE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:2
10.Netincomewillalwaysbelowerthanoperatingincome.
FALSE
AACSB:Analytic
Difficulty:Complex
LearningObjective:2
2-3
11.Laborcostsaretraditionallythelargestcostcategoryforserviceorganizations.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
12.Inaservicecompany,thedistinctionbetweencostofservicessoldandadministrative
costsisdeterminedbywhoperformsthetaskratherthanthenatureofthework.
FALSE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:2
13.Retailandwholesalefirmsaresimilarinthattheysell,butdonotmake,tangible
products.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
14.Bothcostofgoodssoldandcostofservicessoldaredeductedfromrevenuestodetermine
grossmargin.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
15.Transportationincostsincreasethetotalcostofgoodspurchased.
TRUE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:2
2-4
16.Totalcostofgoodspurchasedminusbeginningmerchandiseinventoryplusending
merchandiseinventoryequalscostofgoodssold.
FALSE
AACSB:Analytic
Difficulty:Complex
LearningObjective:2
17.Costofgoodssoldincludestheactualcostsofthegoodssoldandthecostofsellingthem
tothecustomer.
FALSE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:2
18.Goodswhichtakealongtimetomanufactureincurmoreperiodcoststhanproductcosts
andgoodsthatcanbemanufacturedquicklyincurmoreproductcoststhanperiodcosts.
FALSE
AACSB:Analytic
Difficulty:Complex
LearningObjective:2
19.Wholesaleandmanufacturingfirmsaresimilarinthattheymakethetangibleproducts
theysell.
FALSE
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
2-5
20.Periodcostsarethosecostsassignedtounitsofproductionintheperiodinwhichtheyare
incurred.
FALSE
AACSB:Analytic
Difficulty:Complex
LearningObjective:2
21.Onlydirectcostscanbeclassifiedasproductcosts;indirectcostsareclassifiedasperiod
costs.
FALSE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:2
22.Thethreecategoriesofproductcostsaredirectmaterials,directlabor,andmanufacturing
overhead.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
23.Inordertobeclassifiedasadirectproductcost,materialsmustbeeasilyidentifiedwith
theproductbeingproduced.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
2-6
24.Manufacturingoverheadincludesallproductcostsexceptdirectmaterialsanddirect
labor.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
25.Manufacturingoverheadincludesbothindirectmaterialcostsandindirectlaborcosts.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
26.Theprimecostsplusconversioncostsminusthedirectlaborcostequalsthetotalproduct
costs.
TRUE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:2
27.Indirectmaterialsareconsideredtobeaconversioncost.
TRUE
AACSB:Analytic
Difficulty:Complex
LearningObjective:2
2-7
28.Bothdirectlaborandindirectlaborareincludedinconversioncosts.
TRUE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:2
2-8
29.Allmanufacturingcostsareproductcosts.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
30.Thecostofshippinggoodstocustomersisconsideredtobeamarketingcost.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
31.Acostflowdiagramshowsthecostallocationrulebeingusedtoallocatethecostpoolto
thecostobjects.
TRUE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:3
32.Thefirststepindeterminingwhetheracostisdirectorindirectistospecifythecost
allocationrule.
FALSE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:3
2-9
33.ThethreemanufacturinginventoriesareDirectMaterials,WorkinProcess,and
MerchandiseInventory.
FALSE
AACSB:Analytic
Difficulty:Simple
LearningObjective:4
2-10
34.Costofgoodsmanufacturedequalsthesumof(a)directmaterialputintoproduction,(b)
directlabor,and(c)manufacturingoverhead.
FALSE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:4
35.Totalworkinprocessduringtheperiodisthesumofthebeginningworkinprocess
inventoryandthetotalmanufacturingcostsincurredduringtheperiod.
TRUE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:4
36.Costofgoodssoldplustheendingfinishedgoodsinventoryminusthebeginningfinished
goodsinventoryequalsthecostofgoodsmanufactured.
TRUE
AACSB:Analytic
Difficulty:Complex
LearningObjective:4
37.Ifthecostofgoodsmanufacturedduringtheperiodexceedsthecostofgoodssold,the
balanceoftheFinishedGoodsInventoryaccountincreased.
TRUE
AACSB:Analytic
Difficulty:Complex
LearningObjective:4
2-11
38.Totalvariablecostschangeinverselywithchangesinthevolumeofactivity.
FALSE
AACSB:Analytic
Difficulty:Simple
LearningObjective:5
39.Fixedcostsperunitchangeinverselywithchangesinthevolumeofactivity.
TRUE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:5
40.Inhighlyautomated,capitalintensivesettings,directlaborisoftenclassifiedasafixed
cost.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:5
41.Therangewithinwhichfixedcostsremainconstantasvolumeofactivityvariesisknown
astherelevantrange.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:5
2-12
42.Thecostbehaviorfordirectmaterialsisvariable.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:5
2-13
43.Thecostbehaviorofthetotalmanufacturingoverheadcostsisvariable.
FALSE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:5
44.Thetermfullcostreferstothecostofmanufacturingandsellingaunitofproductand
includesbothfixedandvariablecosts.
TRUE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:6
45.Fullabsorptioncostsincludeonlydirectmaterials,directlabor,andmanufacturing
overhead.
TRUE
AACSB:Analytic
Difficulty:Simple
LearningObjective:6
46.Variablemarketingandadministrativecostswouldbeincludedindeterminingfull
absorptioncosts.
FALSE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:6
2-14
47.Thevariablecostperunitisdefinedtobeconstantdespitechangesinthevolumeof
activitywithintherelevantrange.
TRUE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:6
48.Revenueminuscostofgoodssoldequalscontributionmargin.
FALSE
AACSB:Analytic
Difficulty:Moderate
LearningObjective:7
49.Grossmarginistheamountavailabletocoverfixedcostsandearnaprofit.
FALSE
AACSB:Analytic
Difficulty:Simple
LearningObjective:7
50.Theprimarygoalofthecostaccountingsystemistoprovidemanagerswithinformation
topreparetheirannualfinancialstatements.
FALSE
AACSB:Analytic
Difficulty:Simple
LearningObjective:7
2-15
MultipleChoiceQuestions
a.Depreciationonmanufacturingmachinery.
b.Maintenanceonfactorymachines.
c.Productionmanager'ssalary.
d.DirectLabor.
E.Freightout.
AACSB:Analytic
Difficulty:Moderate
LearningObjective:2
55.Acompanywhichmanufacturescustommademachineryroutinelyincurssizable
telephonecostsintheprocessoftakingsalesordersfromcustomers.Whichofthefollowing
isaproperclassificationofthiscost?
a.Productcost
B.Periodcost
c.Conversioncost
d.Primecost
AACSB:Analytic
Difficulty:Moderate
LearningObjective:2
2-16
56.Foramanufacturingcompany,whichofthefollowingisanexampleofaperiodrather
thanaproductcost?
A.Wagesofsalespersons.
b.Salariesofmachineoperators.
c.Insuranceonfactoryequipment.
d.Depreciationoffactoryequipment.
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
57.XYZCompanymanufacturesasingleproduct.Theproduct'sprimecostsconsistof
A.directmaterialanddirectlabor.
b.directmaterialandfactoryoverhead.
c.directlaborandfactoryoverhead.
d.directmaterial,directlaborandfactoryoverhead.
e.directmaterial,directlaborandvariablefactoryoverhead.
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
58.Whichofthefollowingcostsisbothaprimecostandaconversioncost?
a.directmaterials
B.directlabor
c.manufacturingoverhead
d.administrativecosts
e.marketingcosts
AACSB:Analytic
Difficulty:Moderate
LearningObjective:2
2-17
59.Marketingcostsincludeallofthefollowingexcept:
a.Advertising.
b.Shippingcosts.
c.Salescommissions.
D.Legalandaccountingfees.
e.Officespaceforsalesdepartment.
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
60.Propertytaxesonfactoryequipmentareanelementof
a.
b.
C.
d.
AACSB:Analytic
Difficulty:Complex
LearningObjective:2
61.Thetermsdirectcostandindirectcostarecommonlyusedinaccounting.Aparticularcost
mightbeconsideredadirectcostofamanufacturingdepartmentbutanindirectcostofthe
productproducedinthemanufacturingdepartment.Classifyingacostaseitherdirector
indirectdependsupon
a.whetheranexpenditureisunavoidablebecauseitcannotbechangedregardlessofany
actiontaken.
b.whetherthecostisexpensedintheperiodinwhichitisincurred.
c.thebehaviorofthecostinresponsetovolumechanges.
D.thecostobjecttowhichthecostisbeingrelated.
AACSB:Analytic
Difficulty:Moderate
LearningObjective:3
2-18
62.TheCostofGoodsManufacturedStatementsummarizestheperiodicproduction
operationsforacompany.Onthefaceofthatscheduleareintermediatecalculations
supportingthecostofgoodsmanufacturedfigure.ThebeginningWorkinProcessinventory
plusthetotalofthemanufacturingcostsequals
a.totalfinishedgoodsduringtheperiod.
b.costofgoodssoldfortheperiod.
C.totalworkinprocessduringtheperiod.
d.costofgoodsmanufacturedfortheperiod.
AACSB:Analytic
Difficulty:Moderate
LearningObjective:4
63.Amanufacturingcompanyincursdirectlaborcostsasittransformsdirectmaterialinto
marketableproducts.Thecostofthedirectlaborwillbetreatedasaperiodcostontheincome
statementwhentheresulting:
a.payrollcostsarepaid.
b.payrollcostsareincurred.
c.productsarecompleted.
D.productsaresold.
AACSB:Analytic
Difficulty:Moderate
LearningObjective:4
64.Inventoriablecosts:
a.includeonlytheprimecostsofmanufacturingaproduct.
b.includeonlytheconversioncostsofprovidingaservice.
c.excludefixedmanufacturingcosts.
D.areregardedasassetsuntiltheunitsaresold.
e.areregardedasexpenseswhenthecostsareincurred.
AACSB:Analytic
Difficulty:Moderate
LearningObjective:4
2-19
65.Aproductcostisdeductedfromrevenuewhen
A.thefinishedgoodsaresold.
b.theexpenditureisincurred.
c.theproductionprocesstakesplace.
d.theproductionprocessiscompleted.
e.thefinishedgoodsaretransferredtotheFinishedGoodsInventory.
AACSB:Analytic
Difficulty:Simple
LearningObjective:4
66.Directmaterialsissuedtoproductionisfoundby
a.subtractingendingworkinprocessfromtotalworkinprocessduringtheperiod.
b.addingbeginningdirectmaterialsinventoryandthedeliveredcostofdirectmaterials.
C.subtractingendingdirectmaterialsfromdirectmaterialsavailableforproduction.
d.addingdeliveredcostofmaterials,labor,andmanufacturingoverhead.
e.subtractingpurchasesdiscountsandpurchasesreturnsandallowancesfrompurchasesof
directmaterialplusfreightin.
AACSB:Analytic
Difficulty:Simple
LearningObjective:4
67.TheCostofGoodsManufacturedSchedulesummarizestheperiodicproduction
operationsforacompany.Onthefaceofthatscheduleareintermediatecalculations
supportingthecostofgoodsmanufacturedamount.ThebeginningFinishedGoodsInventory
plusthecostofgoodsmanufacturedequals
a.totalfinishedgoodsduringtheperiod.
b.costofgoodssoldfortheperiod.
c.totalworkinprocessduringtheperiod.
d.costofgoodsmanufacturedfortheperiod.
E.costofgoodsavailableforsalefortheperiod.
AACSB:Analytic
Difficulty:Moderate
LearningObjective:4
2-20
68.Directlaborwouldbepartofthecostoftheendinginventoryforwhichofthese
accounts?
a.WorkinProcess.
b.FinishedGoods.
c.DirectMaterialsandWorkinProcess.
D.WorkinProcessandFinishedGoods.
e.DirectMaterials,WorkinProcess,andFinishedGoods.
AACSB:Analytic
Difficulty:Simple
LearningObjective:4
69.TheWorkinProcessInventoryoftheRapidFabricatingCorp.was$3,000higheron
December31,2005thanitwasonJanuary1,2005.Thisimpliesthatin2005
a.costofgoodsmanufacturedwashigherthancostofgoodssold.
B.costofgoodsmanufacturedwaslessthanmanufacturingcosts.
c.manufacturingcostswerehigherthancostofgoodssold.
d.manufacturingcostswerelessthancostofgoodsmanufactured.
e.costofgoodsmanufacturedwaslessthancostofgoodssold.
AACSB:Analytic
Difficulty:Complex
LearningObjective:4
70.Whichofthefollowingisnotaproductcostunderfullabsorptioncosting?
a.Directmaterialsusedinthecurrentperiod
b.Rentforthewarehouseusedtostoredirectmaterials
C.Salariespaidtothetopmanagementinthecompany
d.Vacationpayaccruedfortheproductionworkers
AACSB:Analytic
Difficulty:Simple
LearningObjective:4
2-21
71.Theterm"grossmargin"foramanufacturingfirmreferstotheexcessofsalesover:
a.costofgoodssold,excludingfixedindirectmanufacturingcosts.
b.allvariablecosts,includingvariablemarketingandadministrativecosts.
C.costofgoodssold,includingfixedindirectmanufacturingcosts.
d.variablecosts,excludingvariablemarketingandadministrativecosts.
e.totalmanufacturingcosts,includingfixedindirectmanufacturingcosts.
AACSB:Analytic
Difficulty:Simple
LearningObjective:4
72.Howwouldpropertytaxespaidonafactorybuildingbeclassifiedinamanufacturing
company?
a.Fixed,periodcost.
B.Fixed,productcost.
c.Variable,periodcost.
d.Variable,productcost.
AACSB:Analytic
Difficulty:Moderate
LearningObjective:5
73.Howwouldmiscellaneoussuppliesusedinassemblingaproductbeclassifiedfora
manufacturingcompany?
a.Fixed,periodcost.
b.Fixed,productcost.
c.Variable,periodcost.
D.Variable,productcost.
AACSB:Analytic
Difficulty:Simple
LearningObjective:5
2-22
74.Howwoulda5%salescommissionpaidtosalespersonnelbeclassifiedina
manufacturingcompany?
a.Fixed,periodcost.
b.Fixed,productcost.
C.Variable,periodcost.
d.Variable,productcost.
AACSB:Analytic
Difficulty:Simple
LearningObjective:5
75.Youhavebeenaskedtohelpastudenthealthcenterdeterminewhichcostswillvarywith
thenumberofstudentswhocometothehealthcenter.Thehealthcenteremploysonedoctor,
threenurses,andseveralotheremployees.Howwouldyouclassify(1)thenurse'ssalaryand
(2)filmandothermaterialsusedinradiologytogiveXraystostudents?
a.
B.
c.
d.
e.
AACSB:Analytic
Difficulty:Simple
LearningObjective:5
2-23
76.Pete'sPizzaPlacewishestodeterminewhichofitscostswillvarywiththenumberof
pizzasmade.ThePizzaPlacehasfourpizzamakersandtenotheremployeeswhotakeorders
fromcustomersandperformothertasks.Thefourpizzamakersandtheotheremployeesare
paidanhourlywage.Howwouldoneclassify(1)thewagespaidtothepizzamakersand
otheremployeesand(2)materials(e.g.,cheeses,sauce,etc.)usedtomakethepizza?
a.
b.
c.
D.
e.
AACSB:Analytic
Difficulty:Simple
LearningObjective:5
77.Whichofthefollowingstatementsis(are)true?
(1).Thetermfullcostreferstothecostofmanufacturingandsellingaunitofproductand
includesbothfixedandvariablecosts.
(2).Thefixedcostperunitisconsideredconstantdespitechangesinvolumeofactivity
withintherelevantrange.
A.Only(1)istrue.
b.Only(2)istrue.
c.Both(1)and(2)aretrue.
d.Neither(1)or(2)aretrue.
AACSB:Analytic
Difficulty:Moderate
LearningObjective:6
2-24
78.Giventhefollowinginformation,whatistheoperatingprofitfortheperiod?
a.$275,000
b.$195,000
C.$135,000
d.$107,000
e.$105,000
$500,000 225,000 80,000 60,000=$135,000
AACSB:Analytic
Difficulty:Moderate
LearningObjective:7
2-25
79.Giventhefollowinginformationforaretailcompany,whatisthetotalcostofgoods
purchasedfortheperiod?
A.$298,800
b.$290,800
c.$282,100
d.$304,000
e.Someotheranswer________________.
$304,000+6,700 3,500 8,400=$298,800
AACSB:Analytic
Difficulty:Simple
LearningObjective:4
2-26
80.Acompanyhadbeginninginventoriesasfollows:DirectMaterials,$300;Workin
Process,$500;FinishedGoods,$700.Ithadendinginventoriesasfollows:DirectMaterials,
$400;WorkinProcess,$600;FinishedGoods,$800.Purchases(netincludingfreight)were
$1,400,DirectLabor$1,500,andManufacturingOverhead$1,600.WhatistheCostofGoods
Soldfortheperiod?
a.$4,100.
B.$4,200.
c.$4,300.
d.$4,400.
e.Someotheranswer________________.
$300+1,400 400=$1,300(Directmaterialsusedinproduction)
$500+1,300+1,500+1,600 600=$4,300(CoGM)
$700+4,300 800=$4,200
AACSB:Analytic
Difficulty:Moderate
LearningObjective:4
81.ComputetheCostofGoodsSoldfor2008usingthefollowinginformation:
a.$244,000
B.$234,000
c.$211,000
d.$198,000
e.$188,000
2-27
$40,000+75,000 43,000=$72,000(Directmaterialsusedinproduction)
$87,000+72,000+48,500+72,500 69,000=$211,000(CoGM)
$128,000+211,000 105,000=$234,000
AACSB:Analytic
Difficulty:Moderate
LearningObjective:4
2-28
82.Whatwasthedirectlaborfortheperiod?
A.$5,500.
b.$5,800.
c.$6,300.
d.$6,800.
e.$7,500.
$500+7,700 1,500=$6,700(Directmaterialsusedinproduction)
$400+CoGM 900=$15,600;CoGM=$16,10
$300+6,700+DirectLabor+4,300 700=$16,100;DirectLabor=$5,500
AACSB:Analytic
Difficulty:Complex
LearningObjective:4
83.Whatwasthecostofgoodsavailableforsalefortheperiod?
a.$16,800
B.$16,500
c.$16,100
d.$15,100
e.Someotheranswer_______________.
$400+CoGM 900=$15,600;CoGM=$16,100
$400+16,100=$16,500
AACSB:Analytic
Difficulty:Moderate
LearningObjective:2
2-29
Theestimatedunitcostsforacompanytoproduceandsellaproductatalevelof12,000
unitspermonthareasfollows:
84.Whataretheestimatedconversioncostsperunit?
a.$35
B.$41
c.$44
d.$48
e.$67
$20+15+6=$41
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
85.Whataretheestimatedprimecostsperunit?
a.$73
b.$32
c.$67
D.$52
e.$76
$32+20=$52
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
2-30
86.Whataretheestimatedvariablecostsperunit?
A.$70
b.$38
c.$67
d.$52
e.$18
$32+20+15+3=$70
AACSB:Analytic
Difficulty:Simple
LearningObjective:5
87.Calculatetheconversioncostsfromthefollowinginformation:
a.$3,000
b.$4,000
C.$4,500
d.$5,000
e.$7,000
$1,500+1,000+2,000=$4,500
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
2-31
88.During2008,amanufacturingcompanyhadthefollowingoperatingresults:
Whatisthecostofgoodsmanufacturedfor2008?
A.$1,011,000
b.$1,134,000
c.$1,033,000
d.$1,112,000
$45,000+308,000+475,000+250,000 67,000=$1,011,000
AACSB:Analytic
Difficulty:Moderate
LearningObjective:4
2-32
89.DuringApril2008,theCJGManufacturingCompanyhadthefollowingoperatingresults:
WhatisthecostofgoodsmanufacturedforApril2008?
a.$900,000
B.$875,000
c.$925,000
d.$905,000
$1,500,000 600,000=$900,000(CoGS)
$125,000+CoGM 100,000=$900,000;CoGM=$875,000
AACSB:Analytic
Difficulty:Complex
LearningObjective:4
2-33
Eachquestionisbasedontheproductionandsaleof2,000units.
90.Whatisthevariablemanufacturingcostperunit?
A.$380
b.$430
c.$480
d.$730
e.Someotheranswer__________.
$200+100+80=$380
AACSB:Analytic
Difficulty:Simple
LearningObjective:6
91.Whatisthetotalmanufacturingcostperunit?
a.$380
b.$430
C.$480
d.$730
$200+100+80+($200,000/2,000)=$480
AACSB:Analytic
Difficulty:Simple
LearningObjective:6
2-34
92.Whatisthefullcostperunitofmakingandsellingtheproduct?
a.$430
b.$480
c.$530
D.$730
$200+100+80+($200,000/2,000)+50+($400,000/2,000)=$730
AACSB:Analytic
Difficulty:Moderate
LearningObjective:6
94.Whatistheconversioncostperunit?
a.$100
b.$180
C.$280
d.$380
$100+80+($200,000/2,000)=$280
AACSB:Analytic
Difficulty:Moderate
LearningObjective:2
2-35
95.Whatistheprimecostperunit?
a.$100
b.$280
C.$300
d.$480
$200+100=$300
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
96.ThefollowinginformationwascollectedfromtheaccountingrecordsoftheCJG
Corporationfor3,000units:
WhatisCJG'stotalcostperunit?
a.$180.
b.$200.
c.$210.
D.$250.
$80+40+60+($90,000/3,000)+20+($60,000/3,000)=$250
AACSB:Analytic
Difficulty:Moderate
LearningObjective:6
2-36
97.Theoretically,cashdiscountspermittedondirectmaterialspurchasedshouldbe(CPA
adapted)
a.Addedtootherincome,whetherornottheyaretaken.
b.Addedtootherincome,butonlyiftaken.
C.Deductedfrominventory,whetherornottheyaretaken.
d.Deductedfrominventory,butonlyiftaken.
AACSB:Analytic
Difficulty:Moderate
LearningObjective:1
98.Thedifferencebetweenvariablecostsandfixedcostsis(CMAadapted)
a.Unitvariablecostsfluctuateandunitfixedcostsremainconstant.
B.Unitvariablecostsarefixedovertherelevantrangeandunitfixedcostsarevariable.
c.Totalvariablecostsareconstantovertherelevantrange,whilefixedcostschangeinthe
longterm.
d.Totalvariablecostsarevariableovertherelevantrangebutfixedinthelongterm,while
fixedcostsneverchange.
e.Unitvariablecostschangeinvaryingincrements,whileunitfixedcostschangeinequal
increments.
AACSB:Analytic
Difficulty:Moderate
LearningObjective:1
99.Whichoneofthefollowingcostsisclassifiedasaperiodcost?(CIAadapted)
A.Thewagesoftheworkersontheshippingdockswholoadcompletedproductsonto
outgoingtrucks.
b.Thewagesofaworkerpaidforidletimeresultingfromamachinebreakdowninthe
moldingdepartment.
c.Thepaymentsforemployee(fringe)benefitspaidonbehalfoftheworkersinthe
manufacturingplant.
d.Thewagespaidtoworkersforreworkingdefectiveproductsthatfailedthequality
inspectionuponcompletion.
AACSB:Analytic
Difficulty:Moderate
LearningObjective:1
2-37
100.ThefollowingcostdataforthemonthofMayweretakenfromtherecordsofthe
PaducahManufacturingCompany:(CIAadapted)
Baseduponthisinformation,themanufacturingcostincurredduringthemonthwas:
a.$78,500.
b.$80,000.
C.$80,500.
d.$83,000.
$1,000+28,000+47,000+2,000+500+1,500=$80,000
AACSB:Analytic
Difficulty:Moderate
LearningObjective:1
2-38
101.SarasotaCompany,(amerchandisingCo.)hasthefollowingdatapertainingtotheyear
endedDecember31,2006:(CPAadapted)
Whatisthecostofgoodssoldfortheyear?
a.$385,000
B.$460,000
c.$485,000
d.$536,000
e.someotheranswer_______________
$170,000+($450,000+50,000 210,000)=$460,000
AACSB:Analytic
Difficulty:Simple
LearningObjective:1
2-39
102.TheSoutheasternCompany'smanufacturingcostsforthethirdquarterof2008wereas
follows:(CPAadapted)
Whatamountshouldbeconsideredproductcostsforexternalreportingpurposes?
a.$700,000
b.$800,000
c.$880,000
D.$898,000
e.someotheranswer_______________
$700,000+100,000+80,000+18,000=$898,000
AACSB:Analytic
Difficulty:Simple
LearningObjective:1
2-40
MukwonagoIndustrieshasdevelopedtwonewproductsbuthasonlyenoughplantcapacity
tointroduceoneproductduringthecurrentyear.Thefollowingdatawillassistmanagement
indecidingwhichproductshouldbeselected.
Mukwonago'sfixedoverheadincludesrentandutilities,equipmentdepreciation,and
supervisorysalaries.Sellingandadministrativeexpensesarenotallocatedtoindividual
products.
103.ForMukwonago'sProductL,thecostsfordirectmaterial,machining,andassembly
represent
a.Conversioncosts.
b.Periodcosts.
C.Primecosts.
d.Commoncosts.
e.Fixedcosts.
AACSB:Analytic
Difficulty:Simple
LearningObjective:1
2-41
104.Thedifferencebetweenthe$100estimatedsellingpriceforProductWanditstotalunit
costof$88represents
a.Contributionmarginperunit.
B.Grossmarginperunit.
c.Variablecostperunit.
d.Operatingprofitperunit.
e.Netincomeperunit.
AACSB:Analytic
Difficulty:Simple
LearningObjective:1
105.Thetotaloverheadcostof$27forMukwonago'sProductWisa
a.Sunkcost.
b.Opportunitycost.
c.Variablecost.
D.Mixedcost.
e.Fixedcost.
AACSB:Analytic
Difficulty:Simple
LearningObjective:1
106.ResearchanddevelopmentcostsforMukwonago'stwonewproductsare
a.Primecosts.
b.Conversioncosts.
c.Opportunitycosts.
D.Sunkcosts.
e.Avoidablecosts.
AACSB:Analytic
Difficulty:Simple
LearningObjective:1
2-42
107.TheadvertisingcostsfortheproductselectedbyMukwonagowillbe
a.Primecosts.
b.Conversioncosts.
C.Discretionarycosts.
d.Opportunitycosts.
e.Productcosts.
AACSB:Analytic
Difficulty:Simple
LearningObjective:1
EssayQuestions
108.ThefollowinginformationisavailablefortheCyberspaceConsultingCompanyforthe
fiscalyearendedDecember31,2008.
Required:
(a)Computethecostofservicessold.
(b)Computethetotalmarketingandadministrativecosts.
(c)Computenetincome.
(a)$809,000 x=$170,000;x=$639,000
(b)$170,000 x=$65,500;x=$104,500
(c)$$65,500 [(.34($65,500)]=x;x=$43,230
AACSB:Analytic
Difficulty:Simple
LearningObjective:2
2-43
109.ThefollowinginformationisavailablefortheRobertsRetailStoreforthefiscalyear
endedDecember31,2008.
Required:
(a)PrepareacostofgoodssoldstatementforRobertsRetailStore.
(b)ComputethegrossmarginforthefiscalyearendedDecember31,2005.
(a)
(b)
AACSB:Analytic
Difficulty:Simple
LearningObjective:3
2-44
110.Required:
Foreachofthefollowingcostsincurredinamanufacturingcompany,indicatewhetherthe
costsare(a)fixedorvariableand(b)productcostsorperiodcosts.
*Dependsondepreciationmethodused.
AACSB:Analytic
Difficulty:Simple
LearningObjective:4
LearningObjective:5
2-45
112.ThefollowingcostandinventorydataweretakenfromtherecordsoftheBecaCompany
fortheyear2008:
Costsincurred:
Inventories:
Required:
(a)Computethecostofgoodsmanufacturedfor2008.
(b)Prepareacostofgoodssoldstatementfor2008.
2-46
(a)
(b)
AACSB:Analytic
Difficulty:Moderate
LearningObjective:3
2-47
113.TheMatterManufacturingCompanyprovidedyouwiththefollowinginformationfor
thefiscalyearendedDecember31,2005.
Required:
(a)Computethetotalmanufacturingcostsincurredduring2008.
(b)Computethetotalworkinprocessduring2008.
(c)Computethecostofgoodsmanufacturedduring2008.
(d)Computethecostofgoodssoldduring2008.
(e)Computethetotalprimecostsfor2008.
(f)Computethetotalconversioncostsfor2008.
(A)[($250,800+1,750,200 169,400)+1,004,300+2,693,400=x;x=$5,529,300
(B)$101,000+5,529,300=x;x=$5,630,300
(C)$101,000+5,529,300 57,900=x;x=$5,572,400
(D)$307,400+5,572,400 511,000=x;x=$5,368,800
(E)[($250,800+1,750,200 169,400]+1,004,300=x:x=$2,835,900
(F)$1,004,300+2,693,400=x;x=$3,697,700
AACSB:Analytic
Difficulty:Moderate
LearningObjective:3
2-48
Required:ComputethefollowingamountsforJuly2008,assuming30,000baseballswere
producedandsold:
(a)Totalmanufacturingcosts.
(b)Totalconversioncosts.
(c)Periodcostsperunit.
(d)Fullcostsperunit.
(a)[($500,000+250,000+25,000+37,500+50,000)/25,000]=Variablecostsperunit
Variablecostperunit=$34.50
($34.50 30,000)+(50,000+12,500+125,000+68,000+62,500)=Totalmfg.costs
Totalmanufacturingcosts=$1,035,000+318,000=$1,353,000
(b)[($250,000+25,000+37,500+50,000)/25,000]=Conversioncostsperunit
Conversioncostsperunit=$14.50
(14.50 30,000)+(50,000+12,500+125,000+68,000+62,500)=Totalcosts
Totalconversioncosts=$435,000+318,000=$753,000
(c)($149,150+30,000+48,800)/23,500=Periodcostsperunit
Periodcostsperunit=$9.70
($9.70 30,000)+(300,000+48,000)=Totalperiodcosts
Totalperiodcosts=$639,000
$639,000/30,000=Periodcostsperunit
Periodcostsperunit=$21.30
(d)($1,353,000/30,000)+$21.30=Fullcostsperunit
Fullcostsperunit=$66.40
AACSB:Analytic
Difficulty:Complex
LearningObjective:3
LearningObjective:4
LearningObjective:5
2-49
117.(Basedonproblem4inthetext).
Eachcolumnbelowisindependentandforadifferentcompany.Usethedatagiven,which
refertooneyearforeachexample,tofindtheunknownaccountbalances.
(a)($x+16,100 4,850)+$15,300x=$4,050
(b)$2,700+55,550 3,800=x;x=$54,450
(c)$103,300 56,050=x;x=$47,250
(d)$x+30,486 4,928=30,464;x=$4,906
(e)$3,920+13,440 3,248=x;x=$14,112
(f)$x 30,464=18,368;x=$48,832
(g)$68,744+129,688+x=320,424;x=$121,992
AACSB:Analytic
Difficulty:Moderate
LearningObjective:2
LearningObjective:3
2-50
118.(Basedonproblem45inthetext).
ThefollowingdataappearedinHunterCompany'srecordsonDecember31,2008:
OnJanuary1,2008,theFinishedGoodsInventoryaccounthadabalanceof$280,000,andthe
WorkinprocessInventoryaccounthadabalanceof$90,650.Salesrevenuefor2008was
$6,687,500.
Required:Prepareacostofgoodssoldstatementandanincomestatement.
2-51
PanelA:
PanelB:
PanelC:
2-52
AACSB:Analytic
Difficulty:Moderate
LearningObjective:2
LearningObjective:3
2-53

Chap 002 Lanen

Încărcat de

Informații document

Descriere originală:

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Chap 002 Lanen

Încărcat de

Drepturi de autor:

Formate disponibile

Chapter002CostConceptsandBehavior

$500,000 225,000 80,000 60,000=$135,000

$304,000+6,700 3,500 8,400=$298,800

S-ar putea să vă placă și