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Exam 3: Cost Flows and Cost Terminology

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Question 31

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The cost of providing services might include depreciation on equipment.

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Question 32

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Overhead costs are direct and, as such, are traceable to each product.

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Question 33

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C & C Power Lines is a subcontractor that works on public utilities.Which of the following is a key characteristic that makes it distinctively a service company?

Company's controller is calculating the current month's cost of goods manufactured.Which of the following should be considered as part of the calculation?

Harms Shoe Company applies manufacturing overhead based on the number of units as the cost driver.Information concerning costs for July follows: $\begin{array}{ll}\text { Direct labor costs } & 800 \text { hours @ \$14 } \\\text { Manufacturing overhead } & \$ 8,000 \\\text { Direct materials } & \$ 45,000\end{array}$ How much is the unit product cost if 1,000 units are produced?

The Merchant Tire Company provided the following information for the month of February: $\begin{array} { l c } \text { Cost of goods manufactured } & \$ 147,000 \\\text { Beginning finished goods inventory } & \$ 23,000 \\\text { Cost of goods sold } & \$ 129,000\end{array}$ The company's balance in their finished goods inventory account at the end of February is:

Which of the following is not an example of a service firm?

The SurferDude Company manufactures long and short surfboards.The company incurred manufacturing overhead costs of $210,000 in March.They have decided to allocate these costs based on units produced.In March the company produced 8,000 longboards and 6,000 shortboards.The amount of overhead allocated to each product, respectively, would be: $\begin{array} { l c } \text { Longboards } & \text { Shortboards } \\\text { A } \$ 120,000 & \$ 90,000 \\\text { B. } \$ 90,000 & \$ 120,000 \\\text { C. } \$ 105,000 & \$ 105,000 \\\text { D. } \$ 80,000 & \$ 60,000\end{array}$

In a typical production process, the physical flows for a manufacturer are:

Property taxes on a manufacturing plant is an example of: $\begin{array}{ll}&\text { Product Cost }&\text { Manufacturing }\\&&\text { Overhead }\\A.&\text { No } & \text { Yes } \\B.&\text { No } & \text { No } \\C.&\text { Yes } & \text { No } \\D.&\text { Yes } & \text { Yes }\end{array}$

The Clarke Company provided the following information for the month of December: $\begin{array} { l l } \text { Beginning work-in-process } & \$ 12,000 \\\text { Ending work-in-process } & \$ 9,000 \\\text { Direct labor/materials used } & \$ 14,000 \\\text { Manufacturing overhead } & \$ 7,000\end{array}$ The company's cost of goods manufactured for December is:

The terms cost of goods sold and costs of goods manufactured are used interchangeably.

Office rent is an example of a (an) :

Which of the following are the inputs manufacturers use to make their product?

The following costs were incurred in November: $\begin{array} { l l } \text { Direct materials } \quad \$ 16,000 \\\text { Direct labor } & 8,000 \\\text { Manufacturing overhead } & 10,000 \\\text { Selling expenses } & 4,000 \\\text { Administrative expenses } & 5,000\end{array}$ Prime costs during the month totaled:

The matching principle in GAAP requires that we separate:

Maintenance on factory equipment is a(n) :

Unlike service firms, merchandising firms maintain an inventory of goods that they buy and sell.

Gate Grocery's most popular candy bars cost $0.50 each and sell for $0.75.Management determined that it had purchased 3,000 candy bars in February.It began February with 200 bars and had 150 remaining at the end of February.How much is cost of goods sold for February?

It frequently is vital to modify accounting reports and use non-financial data to estimate the controllable costs and benefits of a decision option.