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Exam 2: Different Costs for Different Purposes

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Question 31

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Answer the following questions using the information below: $\begin{array}{|lr|}\hline \text { Beginning finished goods, } 1 / 1 / 2018 & \$ 40,000 \\\hline \text { Ending finished goods, } 12 / 31 / 2018 & 33,000 \\\hline \text { Cost of goods sold } & 250000 \\\hline \text { Sales revenue } & 600,000 \\\hline \text { Operating expenses } & 120,000 \\\hline\end{array}$ -What is operating profit for 2018?

A) $230 000
B) $157 000
C) $107 000
D) $123 000

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Question 32

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Direct manufacturing labour includes wages and fringe benefits paid to machine operators.

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Question 33

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Improvements in information-gathering technology make it possible to consider more and more costs as ________ costs.

For last year,Ulladula Enterprises reported revenues of $420 000,cost of goods sold of $108 000,cost of goods manufactured of $101 000,and total operating costs of $70 000.Gross margin for last year was:

Costs are defined as variable or fixed with respect to a specific activity and for a given time period.

Retail sector companies purchase ________ products and then sell them without changing their Basic form.

Which statement is TRUE?

Rodney Marsh is paid $10 an hour for straight-time and $15 an hour for overtime.One week he worked 45 hours,which included 5 hours of overtime,and 3 hours of idle time caused by material shortages.Compensation would be reported as:

Manufacturing sector companies purchase and then sell tangible products without changing their basic form.

Misallocated indirect costs may lead to promoting products that are not profitable.

Acquisition costs of direct materials include freight-in charges,and custom duties.

Classifying a cost as ______ is easier if a company's facility (or some part of it) is used exclusively for a specific cost object,such as a specific product or a particular customer.

Which of the following formulae determine cost of goods sold in a retail sector company?

For last year,Deniliquin Manufacturing reported the following: $\begin{array}{|l|r|}\hline\text { Revenue } & \$ 420000 \\\hline \text { Beginning inventory of direct materials, January 1 } & 22000 \\\hline \text { Purchases of direct materials } & 146000 \\\hline \text { Ending inventory of direct materials, December 31 } & 16000 \\\hline \text { Direct manufacturing labour } & 40000 \\\hline \text { Indirect manufacturing costs } & 35000 \\\hline \text { Beginning inventory of finished goods, January 1 } & 104000 \\\hline \text { Cost of goods manufactured } & 36000 \\\hline \text { Ending inventory of finished goods, December 31 } & 140000\\\hline\end{array}$ - What was Deniliquin's cost of goods sold?

Inventoriable costs are expensed on the income statement:

Inventoriable costs and period costs flow through the income statement of a service company in a similar way to those of a manufacturing company.

'Total manufacturing costs' consists of which of the following?

If a worker is paid for 8 hours,but is idle for 1 of those 8 hours,the 1 hour of idle time would be considered a component of direct labour.

Cost of goods manufactured refers to the cost of goods brought to completion,whether they were started before or during the current accounting period.

________ is the band of normal activity level or volume in which there is a specific relationship between the level of activity or volume and the cost in question.