Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Textbook Question
Chapter 1, Problem 1CMA
Which of the following items would not be considered a
- a. Cream for an ice cream maker.
- b. Sales commissions for a car manufacturer.
- c. Plant property taxes for an ice cream maker.
- d. Tires for an automobile manufacturer.
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Manufacturing firms must calculate their cost of goods sold based on how much they manufacture and how much it costs them to manufacture those goods. This requires manufacturing firms to prepare an additional statement before they can prepare their income statement. This additional statement is the Cost of Goods Manufactured statement.
Once the cost of goods manufactured is calculated, the cost is then incorporated into the manufacturing firm’s income statement to calculate its cost of goods sold.
One thing manufacturing firms must consider in their cost of goods manufactured is that, at any given time, they have products at varying levels of production: some are finished and others are still process.
The cost of goods manufactured statement measures the cost of the goods actually finished during the period, whether or not they were started during that period.
True / False
Even though the income statements for the merchandising firm and the manufacturing firm appear very similar at…
Property taxes on a company’s factory building would be classified as a(n):
a. Product cost
b. Opportunity cost
c. Period cost
d. Variable cost
e. Administrative cost
f. Selling cost
Who among the following is not a cost of a product? The expense of the company's fuel. The cost of power at the manufacturing foreman's office Depreciation on the company's installed plant The price of delivering finished goods to clients.
Chapter 1 Solutions
Managerial Accounting
Ch. 1 - Prob. 1DQCh. 1 - Prob. 2DQCh. 1 - What manufacturing cost term is used to describe...Ch. 1 - Distinguish between prime costs and conversion...Ch. 1 - What is the difference between a product cost and...Ch. 1 - Name the three inventory accounts for a...Ch. 1 - In what order should the three inventories of a...Ch. 1 - What are the three categories of manufacturing...Ch. 1 - How do the manufacturing costs incurred during a...Ch. 1 - How does the Cost of goods sold section of the...
Ch. 1 - Management process Three phases of the management...Ch. 1 - Prob. 2BECh. 1 - Prime and conversion costs Identify the following...Ch. 1 - Product and period costs Identify the following...Ch. 1 - Cost of goods sold, cost of goods manufactured...Ch. 1 - Jakes Cabins is a small motel chain with locations...Ch. 1 - Indicate whether each of the following costs of an...Ch. 1 - Indicate whether the following costs of Procter ...Ch. 1 - Prob. 3ECh. 1 - For apparel manufacturer Abercrombie Fitch, Inc....Ch. 1 - From the choices presented in parentheses, choose...Ch. 1 - Prob. 6ECh. 1 - Classifying costs In a service company A partial...Ch. 1 - Classifying costs The following is a manufacturing...Ch. 1 - Financial statements of a manufacturing firm The...Ch. 1 - Manufacturing company balance sheet Partial...Ch. 1 - Cost of direct materials used in production for a...Ch. 1 - Prob. 12ECh. 1 - Cost of goods manufactured for a manufacturing...Ch. 1 - Income statement for a manufacturing company Two...Ch. 1 - Statement of cost of goods manufactured for a...Ch. 1 - Cost of goods sold, profit margin, and net income...Ch. 1 - Cost flow relationships The following information...Ch. 1 - The following is a list of costs that were...Ch. 1 - The following is a list of costs incurred by...Ch. 1 - A partial list of Foothills Medical Centers costs...Ch. 1 - Manufacturing income statement, statement of cost...Ch. 1 - Statement of cost of goods manufactured and income...Ch. 1 - Prob. 1PBCh. 1 - The following is a list of costs incurred by...Ch. 1 - A partial list of The Grand Hotels costs follows:...Ch. 1 - Several items are omitted from the income...Ch. 1 - Statement of cost of goods manufactured and income...Ch. 1 - Comfort Plus, Inc., has a hotel with 300 rooms in...Ch. 1 - Prob. 2MADCh. 1 - Comparing occupancy for two hotels Sunrise Suites...Ch. 1 - Prob. 4MADCh. 1 - Prob. 5MADCh. 1 - Prob. 1TIFCh. 1 - Communication Todd Johnson is the Vice President...Ch. 1 - For each of the following managers, describe how...Ch. 1 - The following situations describe scenarios that...Ch. 1 - Geek Chic Company provides computer repair...Ch. 1 - Which of the following items would not be...Ch. 1 - Prob. 2CMACh. 1 - A firm has 100,000 in direct materials costs,...Ch. 1 - In practice, items such as wood screws and glue...
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- Insurance expense incurred on a factory building would be treated as a a. selling cost b. period cost c. direct cost d. product cost Which of the following is not a commonly used approach to setting transfer prices? a. cost price approach b. market price approach c. negotiated price approach d. revenue price approach Which of the following is not true in regard to direct materials for a bakery? a. Eggs would probably be a direct material. b. Paper cupcake liners, that become part of the product, must be accounted for as direct materials. c. Flour and sugar would probably be direct materials. d. Oil to lubricate factory machines would not be a direct material. Planning for capital expenditures is necessary for all of the following reasons except a. fixed assets may fall below minimum standards of efficiency b. amounts spent for office equipment may be immaterial c. expansion may be necessary to meet increased demand d. machinery and other fixed assets wear outarrow_forwardWhich of the following statements is true of raw materials? ) a) They are categorized as consumer products. b) They are the goods and services that hold little interest for consumers. (c) Thev include products used in producing other products. © d) Thev are large capital purchases designed for a long productive life.arrow_forwardClassify the following manufacturing costs of Business Solutions as either (a) variable (V) or fixed (F)and (b) direct (D) or indirect (I). Taxes on assembly workshoparrow_forward
- Please solve this MCQs How would property taxes paid on a factory building be classified in a manufacturing company? Variable, period cost. Fixed, product cost. Fixed, period cost. Variable, product cost.arrow_forward) Explain the difference between a product cost and a period cost. How does the product cost of a manufacturer differ from the product cost of a merchandiser?arrow_forwardThe largest expense of most manufacturing firms is?a. Salaries Expenseb. Amortization Expensec. Rent Expensed. Cost of Goods Soldarrow_forward
- You are the owner of your own company. You want to employ new workers and also buy a delivery van. Finally, you decide to employ new workers instead of buying a deliver van. Which economic concept is implicit in the above statement? Economic cost Accounting cost Opportunity cost Marginal costarrow_forwardWhich of the following costs at a manufacturing company would be treated as a product cost under variable costing? Multiple Choice direct material cost property taxes on the factory building sales manager's salary sales commissionsarrow_forwardA by-product is best described as * a. A product that s produced from materials that would otherwise be considered scrap. b. A product that has a lower selling price than the main product. c. A product manufactured along with the main product, a sales value that does not cover its cost of production. d. A product that usually yields a small amount of revenue when compared to the revenue from the main product.arrow_forward
- An example of an uncontrollable cost would include all of the following except ________. A) hourly rate of pay for the company's purchasing manager B) federal income tax rate paid by the company C) real estate taxes charged by the county in which the business operates D) per-gallon cost of fuel for the company's delivery trucksarrow_forwardWhich of the following costs is most likely to be classifled as a fixed cost? Multiple Cholce Direct materials Sales commissions Direct labor Property taxes Shipping costsarrow_forwardI. The Cost of Goods Sold of a Merchandising company will include cost of Materials, Labor and Factory Overhead. II. A Merchandising company's Cost of Goods Sold will include Purchases.A. Statement I is false while statement II is true.B. Both statements are true.C. Both statements are false.D. Statement I is true while statement II is false.arrow_forward
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