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Exam 16: Cost Concepts and Cost Allocation

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Question 81

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Which of the following is not an example of indirect materials?

A) Wood in a desk
B) Nails in a desk
C) Screws in a desk
D) Lubricants for machinery

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Question 82

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Cost of Goods Sold is decreased for underapplied overhead.

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Question 83

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Sugar is an indirect cost in the manufacture of candy.

Period costs are not considered when costing products for inventory.

Which of the following is not a reason to classify costs as either product or period costs?

Which of the following is not included in the purchase cost of merchandise inventory?

Fill in the missing data for Company B: $\begin{array}{|l|r|}\hline&\text { Company B }\\\hline \text { Direct materials used } & \$ 9,000 \\\hline \text { Direct labor cost } & 4,000 \\\hline \text { Overhead } & \text { (a) } \\\hline \text { Total manufacturing costs } & 25,000 \\\hline \text { Work in process inventory, Jan. 1 } & 1,000 \\\hline \text { Work in process inventory, Dec. } 31 & 3,500 \\\hline \text { Sales revenue } & 40,000\\\hline \text { Finished goods inventory, Jan. } 1 & \text { (b) } \\\hline \text { Cost of goods manufactured } & \text { (c) } \\\hline \text { Cost of goods available for sale } & \text { (d) } \\\hline \text { Finished goods inventory, Dec. } 31 & 4,000 \\\hline \text { Cost of goods sold } & 26.500\\\hline \text { Gross margin } & \text { (e) } \\\hline \text { Operating expenses } & \text { (f) } \\\hline \text { Net operating income } &5,500\\\hline\end{array}$

The following are costs for a selected period: direct materials put into production,$94,000; direct labor cost of converting materials into product,$200,000; total indirect costs of manufacturing the product,$40,000.What is the per unit cost of manufacturing 20,000 units in this period?

Which of the following account balances is not reported on the balance sheet?

Direct labor is a fixed cost because it always occurs.

Total manufacturing costs are equal to

Conversion costs consist of

The costs of materials used in production are transferred from the Materials Inventory account directly to the Finished Goods Inventory account.

Which of the following is an activity that causes changes in the amount of a cost pool?

Overhead costs are not

Job 29 consists of 300 units and has total manufacturing costs of direct materials,$4,500; direct labor,$7,500; and overhead,$3,600. a. What is the unit product cost? b. What are the prime costs per unit? c. What are the conversion costs per unit?

A cost driver is a cost pool that increases with activity.

Cost of goods manufactured appears on the income statement of a manufacturing company in a similar manner as purchases appear on the income statement of a merchandising company.

Direct materials,direct labor,and overhead costs will most likely become part of the Cost of Goods Sold account balance in case of manufacturing companies.

Sleney Company applies overhead on the basis of direct labor dollars,using a rate of $1.65 per labor dollar.How much overhead would be applied to products in January if $18,600 of labor costs were incurred and 2,200 labor hours were worked?