Horngren's Cost Accounting, Student Value Edition (16th Edition)
16th Edition
ISBN: 9780134476032
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Textbook Question
Chapter 2, Problem 2.40P
Interpretation of statements (continuation of 2-39)
- 1. How would the answer to Problem 2-39 be modified if you were asked for a schedule of cost of goods manufactured and sold instead of a schedule of cost of goods manufactured? Be specific.
Required
- 2. Would the sales manager’s salary (included in marketing, distribution, and customer-service costs) be accounted for any differently if the Howell Corporation were a merchandising-sector company instead of a manufacturing-sector company?
- 3. Using the flow of
manufacturing costs outlined in Figure 2-9 (page 44), describe how the wages of an assembler in the plant would be accounted for in this manufacturing company. - 4. Plant supervisory salaries are usually regarded as manufacturing
overhead costs. When might some of these costs be regarded as direct manufacturing costs? Give an example. - 5. Suppose that both the direct materials used and the plant and equipment
depreciation are related to the manufacture of 1 million units of product. What is the unit cost for the direct materials assigned to those units? What is the unit cost for plant and equipment depreciation? Assume that yearly plant and equipment depreciation is computed on a straight-line basis. - 6. Assume that the implied cost-behavior patterns in requirement 5 persist. That is, direct material costs behave as a variable cost and plant and equipment depreciation behaves as a fixed cost. Repeat the computations in requirement 5, assuming that the costs are being predicted for the manufacture of 1.2 million units of product. How would the total costs be affected?
- 7. As a
management accountant , explain concisely to the president why the unit costs differed in requirements 5 and 6.
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Students have asked these similar questions
I. 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.
Which of the following would not be a period cost?
Group of answer choices
Sales commissions.
Accounting costs.
Sales salaries.
Tamper-proof packaging.
Legal costs.
Which of the following is NOT a period cost?
Select one:
O a.
manufacturing costs.
Ob general and administrative costs.
Oc marketing costs.
Od. research and development costs.
Which of the following is NOT one of the questions management accountants might attempt to help answer in
the formulation of strategy?
Select one:
a.
What substitute products exist in the marketplace?
Ob. Who are our most important customers?
Does the strategy comply with GAAP (Generally Accepted Accounting Principles)?
Od.
Will adequate cash be available to implement the strategy?
Chapter 2 Solutions
Horngren's Cost Accounting, Student Value Edition (16th Edition)
Ch. 2 - Define cost object and give three examples.Ch. 2 - Define direct costs and indirect costs.Ch. 2 - Prob. 2.3QCh. 2 - Name three factors that will affect the...Ch. 2 - Define variable cost and fixed cost. Give an...Ch. 2 - What is a cost driver? Give one example.Ch. 2 - What is the relevant range? What role does the...Ch. 2 - Explain why unit costs must often be interpreted...Ch. 2 - Prob. 2.9QCh. 2 - What are three different types of inventory that...
Ch. 2 - Distinguish between inventoriable costs and period...Ch. 2 - Define the following: direct material costs,...Ch. 2 - Describe the overtime-premium and idle-time...Ch. 2 - Define product cost. Describe three different...Ch. 2 - What are three common features of cost accounting...Ch. 2 - Prob. 2.16MCQCh. 2 - Comprehensive Care Nursing Home is required by...Ch. 2 - Frisco Corporation is analyzing its fixed and...Ch. 2 - Year 1 financial data for the ABC Company is as...Ch. 2 - The following information was extracted from the...Ch. 2 - Computing and interpreting manufacturing unit...Ch. 2 - Direct, indirect, fixed, and variable costs....Ch. 2 - Classification of costs, service sector. Market...Ch. 2 - Classification of costs, merchandising sector....Ch. 2 - Classification of costs, manufacturing sector. The...Ch. 2 - Variable costs, fixed costs, total costs. Bridget...Ch. 2 - Variable and Fixed Costs. Consolidated Motors...Ch. 2 - Variable costs, fixed costs, relevant range. Gummy...Ch. 2 - Prob. 2.29ECh. 2 - Cost drivers and functions. The representative...Ch. 2 - Total costs and unit costs, service setting....Ch. 2 - Total and unit cost, decision making. Gayles...Ch. 2 - Inventoriable costs versus period costs. Each of...Ch. 2 - Computing cost of goods purchased and cost of...Ch. 2 - Cost of goods purchased, cost of goods sold, and...Ch. 2 - Flow of Inventoriable Costs. Renkas Heaters...Ch. 2 - Cost of goods manufactured, income statement,...Ch. 2 - Cost of goods manufactured, income statement,...Ch. 2 - Income statement and schedule of cost of goods...Ch. 2 - Interpretation of statements (continuation of...Ch. 2 - Income statement and schedule of cost of goods...Ch. 2 - Terminology, interpretation of statements...Ch. 2 - Labor cost, overtime, and idle time. David...Ch. 2 - Missing records, computing inventory costs. Ron...Ch. 2 - Comprehensive problem on unit costs, product...Ch. 2 - Prob. 2.46PCh. 2 - Cost classification; ethics. Paul Howard, the new...Ch. 2 - Prob. 2.48P
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 1.) Explain one difference between manufacturing and merchandising business.2.) Why is it that product costs are distinguished from period costs? 3.) Explain why financial statement analysis is important.arrow_forwardWhich of the following is NOT an objective of determining product costs for manufacturing firms? A) To determine selling prices B) to reduce operating leverage C) to make decisions D) to do financial reportingarrow_forwardWhich of the following would not be considered a component of the "cost" of Goods Sold?a. Salesforce Salariesb. Transportation for purchasec. Import duties or raw materiald. Factory electricity expensearrow_forward
- One key difference appears when comparing the income statements of a manufacturing company to a merchandising company. What is that difference? Cost of goods manufactured is subtracted from sales to get gross profit on a manufacturing income statement, while cost of goods purchased is subtracted from sales to get gross profit on a merchandising income statement. O Manufacturing companies use cost of goods manufactured and merchandising companies use cost of goods purchased. Manufacturing companies use work in process, raw materials, and finished goods inventory balances to calculate cost of goods sold, while merchandising companies use only merchandise inventory balances. Cost of goods sold equals the cost of merchandise purchased for a merchandising company, while cost of goods sold equals the cost of raw materials purchased for a manufacturing company.arrow_forwardWhat affect would closing an OVERAPPLIED Manufacturing Overhead account to Cost of Goods Sold have on the accounting records? Group of answer choices A. Cost of Goods Sold would increase B. Net Income would decrease C. Cost of Goods Sold would decrease Both A & Barrow_forwardWhich of the following is not a period cost? Group of answer choices Sales commissions. Public relations costs. The salary of a company's chief financial officer (CFO). Legal costs. Wages of assembly-line workers.arrow_forward
- Which of the following is not a revenue driver factor which affects sales volume for a manufacturing firm? Multiple Choice Price changes. Customer service. Delivery dates. Productivity. Discounts.arrow_forwardplease answer in detail with complete explanationarrow_forwardI need the answer as soon as possiblearrow_forward
- How does a manufacturing company calculate the cost of goods sold? How is this different from a merchandising company?arrow_forwardHow does the Cost of goods sold section of the income statement differ between merchandising and manufacturing companies?arrow_forwardWhich one of the following is correct about manufacturing statement? Select one: a. It is one of the reports for the use of financial analysts outside the company. b. It can only be prepared on a yearly basis. c. It does not include information about raw materials cost. d. It reports Cost of Goods Sold. Clear my choicearrow_forward
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