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Exam 2: Basic Managerial Accounting Concepts

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Question 1

True/False

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An opportunity cost is the benefit given up or sacrificed when one alternative is chosen over another.

A) True
B) False

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Question 2

Multiple Choice

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Figure 2-3. Bartlow,Inc.had the following income statement for the month of May. Refer to Figure 2-3.What was the administrative expense percent?

A) 17%
B) 19%
C) 16%
D) 15%

E) All of the above
F) A) and D)

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Question 3

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Costs that can be easily and accurately traced to a cost object are called __________.

Figure 2-1. Concam Inc.manufactures television sets.Last month direct materials (electronic components,etc.) costing $500,000 were put into production.Direct labor of $800,000 was incurred,overhead equaled $450,000,and selling and administrative costs totaled $360,000.The company manufactured 8,000 television sets during the month.Assume that there were no beginning or ending work in process balances. Refer to Figure 2-1.The total per unit prime cost was:

Figure 2-3. Bartlow,Inc.had the following income statement for the month of May. Refer to Figure 2-3.What was the selling expense percent?

Expired costs are called assets.

Extrema Company supplied the following data at the end of the current year. Required:

Production costs that are not attached to units that are sold are reported as:

Figure 2-3. Bartlow,Inc.had the following income statement for the month of May. Refer to Figure 2-3.What was the gross margin percent?

Prime cost is the sum of direct materials cost and direct labor cost.

Assigning costs to cost objects

Product costs are expensed

See the following separate cases. Required: Solve for the missing amounts (A,B,C,D,E,F)

Product costs consist of

Figure 2-5. In July,Econo Company purchased materials costing $21,000 and incurred direct labor cost of $18,000.Overhead totaled $32,000 for the month.Information on inventories was as follows: Refer to Figure 2-5.What was the cost of direct materials used in July?

Rancor Inc.had a per-unit conversion cost of $2.50 during April and incurred direct materials cost of $100,000,direct labor costs of $75,000,and overhead costs of $45,000 during the month.How many units did they manufacture during the month?

Explain the difference between a cost that is included in valuing inventory and a cost that is not included in valuing inventory.

Figure 2-5. In July,Econo Company purchased materials costing $21,000 and incurred direct labor cost of $18,000.Overhead totaled $32,000 for the month.Information on inventories was as follows: Refer to Figure 2-5.What were the total manufacturing costs in July?

Product costs are carried in inventory until the goods are finished.

Figure 2-4. Junko Company makes financial calculators.During the year Junko manufactured 97,000 financial calculators.Finished goods inventory had the following units on hand: Refer to Figure 2-4.If each financial calculator had a per-unit product cost of $112,what was the cost of Finished goods inventory on December 31?