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Exam 1: A: Basic Cost Management Concepts

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Question 111

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Information from the records of the Scully Company for July was as follows: $\begin{array}{llr} \text { Sales } &\$307,500\\ \text { Selling and administrative expenses } &52,500\\ \text {Direct materials used } &66,000\\ \text { Direct labour } &75,000\\ \text { Variable factory overhead} &50,000\\ \text {Factory overhead } &51,250\\\end{array}$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Inventories }$ $\begin{array}{lrr}&\text {July 1}&\text {July 31}\\\text { Direct materials } & \$ 8,000 & \$ 10,500 \\\text { Work in process } & 18,750 & 21,000 \\\text { Finished goods } & 17,250 & 14,250\end{array}$ Scully Corporation produced 20,000 units. -Refer to the figure.What were the prime costs per unit for July?

A) $7.05
B) $8.8125
C) $14.7375
D) $20.00

E) A) and B)
F) B) and C)

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Question 112

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Which cost assignment method would likely assign the cost of heating in a plant that makes chairs and go-carts when the chair product line is the cost object?

A) driver tracing
B) direct tracing
C) allocation
D) arbitration

E) None of the above
F) B) and D)

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Question 113

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Which of the following expenses incurred by a department store is a direct cost for the women's shoe department?

Information from the records of the Tyler Enterprises for March is as follows: $\begin{array} { l r } \text { Sales } & \$ 41,000 \\\text { Direct labour } & 10,000 \\\text { Selling and administrative expenses } & 7,000 \\\text { Direct materials purchases } & 6,000 \\\text { Factory averhead } & 13,500\end{array}$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Inventories }$ $\begin{array}{lcc}& \underline{\text { March 1 }}&\underline{\text { March 31}}\\ \text { Direct materials } & \$ 1,200 & \$ 1,400 \\\text { Work in process } & 2,500 & 2,800 \\ \text { Finished goods } & 2,300 & 1,900 \\\end{array}$ -Refer to the figure.What was the cost of materials used in production?

Which of the following is a cost management subsystem designed to provide accurate and timely feedback concerning the performance of managers and others relative to their planning and control of activities?

Which of the following would be considered a line function?

In regard to services,what is the definition of inseparability?

Which of the following would NOT be a benefit of a cost management system?

How are costs classified when calculating the absorption-costing income for external reporting?

Which of the following items is not relevant to the cost flows of a service organization?

What is the term for a computerized information system that strives to input data once and make it available to people across the company for different purposes?

Inventory balances for the James Enterprises in February are as follows: $\begin{array}{lrr}&\text { February } 1&\text { February } 28\\\text { Raw materials } & \$ 27,000 & \$ 21,000 \\\text { Work in process } & 48,000 & 37,200 \\\text { Finished goods } & 108,000 & 90,000\end{array}$ During February,purchases of direct materials were $36,000.Direct labour and factory overhead costs were $60,000 and $84,000,respectively. -Refer to the figure.What is the cost of goods manufactured?

What is developing a company strategy for responding to anticipated new markets an example of?

Which of the following is NOT a transformational process in an accounting information system?

In a company,engineers have redesigned the production process,lowering production costs,shortening the production cycle time,reducing waste,and improving quality.What managerial activity is occurring in this situation?

Which steps are included in the planning process?

Which of the following is NOT a period cost?

Which of the following costs is an example of a product cost?

Information from the records of the Cain Corporation for August was as follows: $\begin{array}{llr} \text {Sales } &\$1,230,000\\ \text { Selling and administrative expenses } &210,000\\ \text { Direct materials used } &264,000\\ \text { Direct labour } &300,000\\ \text {Factory overhead* } &405,000\\\end{array}$ *variable overhead is $205,000,fixed overhead is $200,000 $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Inventories }$ $\begin{array}{lrr}& \underline{\text {August 1}}& \underline{\text {August 31}}\\\text { Direct materials } & \$ 36,000 & \$ 42,000 \\\text { Work in process } & 75,000 & 84,000 \\\text { Finished goods } & 69,000 & 57,000\end{array}$ -Refer to the figure.What are the variable product costs?

What would wages paid to a janitor in a factory be classified as?