Managerial Accounting Ch.1 and Ch.2
Audio Corporation purchased $20,000 of DVDs during the current year. The company had DVD inventory of $15,000 at the beginning of the year. An end of the year audit revealed that the company had DVD inventory of $10,000. The amount that would be reported as cost of goods sold in the income statement for the current year is ________.
$25,000
In a small manufacturing facility, one welder is needed for every 200 hours of machine-hours or fewer in a month. The welder is paid a monthly salary of $2,500. If the total monthly requirement is 1,300 machine-hours, the total salaried employee expense is ________.
17,500
Cyber Devices manufactures PCTV products that enable people to watch television content on their computers. It sells its product to retailers for $50. A tuner component that goes into each of these devices costs $5 to acquire. The total variable cost at an activity level of 1,000 units equals ________.
5,000
D.L Manuf. O/H
Conversion Cost
The traditional income statement uses which of the following cost categories?
Cost of goods sold and selling and administrative expenses.
________ is sometimes called "touch labor."
Direct Labor
D.M D.L
Prime Cost
How should the wages of a sheet metal worker in a fabrication plant be classified?
Product cost
What is the term used when a company applies less overhead to production than it actually incurs?
Underapplied
Sunk Cost
a cost that has already been incurred and that cannot be changed by any decision made now or in the future
The salary of the company's accountant
administrative cost
Manufacturing costs include all of the following categories except ________.
administrative costs
The direct materials required to manufacture each unit of product are listed on a ________.
bill of materials
A normal cost system applies overhead to jobs ________.
by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job
A ___________ is a cost that is incurred to support a number of cost objects but cannot be traced to them individually.
common cost
The adjustment for overapplied overhead ________.
decreases cost of goods sold and increases net operating income
Adventure Holiday sells thousands of tour packages each month through its various branches. A branch manager's salary would be a(n) _________ of the branch.
direct cost
The wages of employees who assemble computers from components
direct labor
Materials that become an integral part of the finished product and whose costs can be conveniently traced to the finished product are called ________.
direct materials
The cost of a hard drive installed in a computer
direct materials
Adventure Holiday sells thousands of tour packages each month through its various branches. A branch manager's salary would be a(n) _________ of selling a tour package
indirect cost
Depreciation on equipment used to test assembled computers beforerelease to customers
manufacturing overhead
The salary of the assembly shop's supervisor
manufacturing overhead
Items such as indirect materials, indirect labor, maintenance and repairs on production equipment, depreciation, and insurance on manufacturing facilities are included in ________.
manufacturing overhead costs
The ________ requires that the costs incurred to generate a particular revenue should be recognized as expenses in the same period that the revenue is recognized.
matching principle
Companies can improve job cost accuracy by using ________.
multiple predetermined overhead rates
Property taxes associated with a company's administrative facility are considered ________.
nonmanufacturing costs
Differential costs are always ________.
relevant in making business decisions
A fixed cost is a cost which ________.
remains constant in total with changes in the level of activity
Sales commissions paid to the company's salespeople
selling
The cost of advertising in the Puget Sound Computer User newspaper
selling
If a firm increases its activity level, ________.
some costs will change, other costs will remain the same
When all of a company's job cost sheets are viewed collectively they form what is known as a ________.
subsidiary ledger
Which of the following is always an irrelevant cost?
sunk cost
In the cost formula (Y = a + bX) that is used to estimate the total manufacturing overhead cost for a given period, the letter "a" refers to the estimated ________.
total fixed manufacturing overhead cost