Module 1
based on the following information, compute the cost of goods sold for Spengler Merchandising Corporation Sales 400,000 Purchases 300,000 Beginning Inventory 50,000 Ending inventory 90,000 Selling exp 70,000 Admin Exp. 30,000 Accts. Rec. 110,000
$260,000 (beginning inv + purch. - ending inv. =cogs)
a company purchased a 12 month insurance policy on October 1 at a cost of $1,200. On the December 31 annual financial statements:
$300 is reported as a expense and $900 is reported as an asset
based on the following information, calculate net income for Dana's Dress Shop using the traditional format. Sales 360,000 Gross margin 140,000 Contrib. margin 110,000 Total selling & admin exp 60,000
80,000 (Gross margin - total selling & admin exp.)
Costs that can be easily and conveniently traced to a specific product are called ____ costs
Direct
A cost that can be easily and conveniently traced to a specific cost object is a(n) ____ cost of that cost objective; whereas costs that cannot be easily and conveniently traced to that specific cost object are ____ costs
Direct ; Indirect
A laptop computer manufacturer would consider the computer's processor chip to be a(n) ____ cost
Direct Material
true or false: labor costs that can be specifically traced to a product are indirect labor costs
False
Which of the following statements are true?
a direct cost can be easily and conveniently traced to a specific cost object. a regional sales manager's salary would be a direct cost of the regional office in which the sales manager works.
the contribution approach to constructing income statements
aids in decision making distinguishes between fixed and variable costs
Cost objects include
anything for which cost data is desired organizational subunits customers
indirect labor costs include
assembly-line supervisor salary factory security guard wages
A type of indirect cost incurred to benefit more than one cost object is a(n) ____ cost
common
a type of indirect cost incurred to benefit more than one cost object is a(n) ____ cost
common
nonmanufacturing costs include
company president's salary sales commissions
sales revenue minus variable expenses equals ____ ___.
contribution margain
direct labor and overhead costs incurred to change raw materials into finished products are known as ___ cost
conversion
any item for which cost data is desired is called a(n) ____.
cost objective
In an automobile manufacturing plant, the assembly-line workers are classified as ____ ____ cost
direct labor
prime costs are:
direct materials direct labor
other names for manufacturing overhead include
factory overhead factory burden indirect manufacturing costs
manufacturing overhead costs include
indirect materials, factory supervisors' salaries, and factory depreciation
direct materials and direct labor are both ____ costs
manufacturing
indirect materials and indirect labor as classified as
manufacturing overhead
a dress manufacturer would consider the cost of relatively inexpensive items like thread to be part of
manufacturing overhead indirect matierals
the accrual concept that cost incurred to generate a revenue are expensed in the same period that revenue is known as the ____ principle
matching
There are two broad classifications of costs: Manufacturing and ____ costs
nonmanufacturing
which of the following are true?
period costs are expensed in the same period in which they are incurred sales commissions are period costs
inventoriable costs is another term for ____ costs.
product
an income statement focusing on product and period costs has been prepared using a ____ format, while a(n) ____ format income statement makes a distinction between fixed and variable costs.
traditional and contribution
True or false: The finished product of one company can become raw materials for another company
true
units that are participial complete are found in
work in progress