Accounting

Perteet Corp. relevant range of activity is 3,000 units to 7,000 units. When ir produces and sells 5,000 units, its average costs per unit are as follows: If 4,000 units are produced, the total amount of manufacturing overhead cost is closest to:

5,000(Fixed manufacturing overhead 3) + (Variable manufacturing overhead 1.60) 4,000= 21,400

Vignana Corporation manufactures and sells hand-painted clay figurines of popular sports heroes. Shown below are some of the costs incurred by Vignana for last year: Cost of clay used in production $65,000 Wages paid to the workers who paint the figurines $90,000 Wages paid to the sales manager's secretary $22,000 Cost of junk mail advertising $47,000 What is the total of the conversion costs above?

90,000

Which of the following costs is classified as both a prime cost and conversion cost?

Direct Labor

The following costs were incurred in May: Direct materials $33,000 Direct labor $13,000 Manufacturing overhead $23,000 Selling expenses $16,000 Administrative expenses $34,000 Prime costs during the month totaled:

Direct material and direct labor= 46,000

Total Product Cost for listed above=

Direct materials Utilities, factory Indirect labor Depreciation of production equipment Direct labor

A decrease in production will ordinarily result in a decrease in fixed production costs per unit.

False

A decrease in production will ordinarily result in a decrease in fixed production costs per unit?

False

As activity decreases within the relevant range, fixed costs remain constant on a per unit basis?

False

Conversion cost is the same thing as manufacturing overhead?

False

Fixed cost expressed on a per unit basis do not change with changes in activity?

False

If the activity level increases, then one would expect the fixed cost per unit to increase as well?

False

In a manufacturing company, all cost are period cost?

False

Indirect cost, such as manufacturing overhead, are variable cost?

False

Prime cost equals manufacturing overhead cost?

False

The variable cost per unit depends on how many units are produced?

False

Wages paid to production supervisors would be classified as manufacturing overhead and are an indirect cost?

False

Which of the following statements is correct in describing manufacturing overhead?

Manufacturing overhead consists of all manufacturing cost expect for prime cost

The cost of direct materials are classified as:

No-Conversion cost Yes- Manufacturing Cost Yes- Prime Cost

A direct cost is a cost that can be easily traced to the particular cost object under consideration?

True

A factory supervisor's salary would be classified as an indirect cost with respect to a unit of product?

True

A fixed cost is a cost whose cost per unit varies as the activity level rises and falls?

True

A variable cost remains constant if expressed on a unit basis

True

Conversion cost equals product cost less direct materials cost?

True

Conversion cost is the sum of direct labor cost and manufacturing overhead cost?

True

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

True

The cost of napkins put on each person's tray at a fast food restaurant is a variable cost with respect to how many people are involved?

True

The sum of all manufacturing costs expect for direct materials and direct labor is called manufacturing overhead?

True

The three cost elements ordinarily included in product costs are direct materials, direct labor, and manufacturing overhead?

True

Overheads=

Utilities, factory Indirect Labor Depreciation of production equipment

A factory supervisors wages are classified as:

Yes-Indirect labor Yes-Manufacturing overheads

Manufacturing Overhead includes:

all manufacturing costs except direct labor and direct materials

All of the following are examples of product costs expect:

depreciation on the company's retail outlets

Materials used in a factory that are not an integral part of the final product, such as disposable gloves to protect workers hands, should be classified as:

manufacturing overhead

Rotonga Manufacturing Company leases a vehicle to deliver its finished products to customers. Which of the following terms correctly describes the monthly lease payments made on the delivery vehicle?

period and fixed cost

Property Taxes on a company's factory building would be classified as an:

product cost

Which of the following would most likely not be included as manufacturing overhead in a furniture factory?

the amount paid to the individual who stains a chair

Product cost are also known as inventoriable cost?

true