Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 2, Problem 2.4SE
Classify costs as direct or indirect (Learning Objective 3)
Classify each of the following costs as a direct cost or an indirect cost, assuming that the cost object is the Juniors Department (clothing and accessories for teenage and young women) in the Stow Kohl’s department store. (Kohl’s is a chain of department stores and has stores located across the United States.)
- a. Juniors Department sales clerks
- b. Cost of Juniors clothing
- c. Cost of hangers used to display the clothing in the store
- d. Electricity for the building
- e. Cost of radio advertising for the store
- f. Juniors clothing buyers’ salaries (these buyers buy for all the Juniors Departments of Kohl’s stores)
- g.
Depreciation of the building - h. Cost of costume jewelry on the mannequins in the Juniors Department
- i. Cost of bags used to package customer purchases at the main registers for the store
- j. The Stow Kohl’s store manager’s salary
- k. Cost of the security staff at the Stow store
- l. Manager of Juniors Department
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Click to watch the Tell Me More Learning Objective 4 video and then answer the questions below.
1. Which of the following represents the computation of direct materials cost per equivalent unit?
Total direct cost for the period divided by total equivalent units of direct materials.
Total equivalent units of direct materials divided by total direct cost for the period.
Total direct cost for the period divided by total units of direct materials.
Total units of direct materials divided by total direct cost for the period.
2. What is the conversion cost per equivalent unit, when the total conversion cost for the period is $1,225 and the total units of packaged drinking water produced during the same period is 5,000 gallons (70 percent complete).
$0.17 per gallon
$0.35 per gallon
$2.86 per gallon
None of these choices are correct.
Click to watch the Tell Me More Learning Objective 2 video and then answer the questions below.
1. The first step in preparing a cost of production report is to _____.
compute equivalent units of production
determine the units to be assigned costs
determine the cost per equivalent unit
allocate costs to units transferred out and partially completed units
2. The last step in preparing a cost of production report is to _____.
compute equivalent units of production
determine the units to be assigned costs
determine the cost per equivalent unit
allocate costs to units transferred out and partially completed units
E-LEARNING SERVICES
SQU LIBRARIES
-LEARNING SYSTEM (ACADEMIC)
Process costing:
Time left 1:55:02
O a. allocates applied manufacturing overhead cost to product cost.
O b. is normally used by companies which produce shoes.
O C. All the given answers are correct.
O d. uses the manufacturing accounts, including Manufacturing Overhead, Raw Materials, Work
in Process, and Finished Goods.
O e. assigns direct materials cost, direct labor cost, and manufacturing overhead costs to
products to compute product cost per unit.
Company XYZ made total sales revenue of $200,000. The variable manufacturing costs were
$75,000 while the fixed manufacturing costs were $20,000. The variable selling and administrative
expenses were $45,000 while the fixed selling and administrative expenses were $10,000. How
much was the total contribution margin ($)?
O a.
125,000
O b. 105,000
Fi
O C.
145,000
O d. None of the given answers
O e. 80,00O
Chapter 2 Solutions
Managerial Accounting (5th Edition)
Ch. 2 - (Learning Objective 1) Which of the following...Ch. 2 - (Learning Objective 2) Which of the following is...Ch. 2 - (Learning Objective 3) A cost that can be traced...Ch. 2 - (Learning Objective 4) Period costs are often...Ch. 2 - (Learning Objective 4) Conversion costs consist of...Ch. 2 - (Learning Objective 4) Which of the following is...Ch. 2 - Prob. 7QCCh. 2 - (Learning Objective 5) Which of the following...Ch. 2 - Prob. 9QCCh. 2 - Prob. 10QC
Ch. 2 - Short Exercises S2-1 Identify types of companies...Ch. 2 - Identify type of company from balance sheets...Ch. 2 - Classify costs by value chain function (Learning...Ch. 2 - Classify costs as direct or indirect (Learning...Ch. 2 - Prime costs Cost objects Product costs Assigned...Ch. 2 - Prob. 2.6SECh. 2 - Classify product costs and period costs (Learning...Ch. 2 - Classify a manufacturers costs (Learning Objective...Ch. 2 - Classify costs incurred by a dairy processing...Ch. 2 - Determine total manufacturing overhead (Learning...Ch. 2 - Prepare a retailers income statement (Learning...Ch. 2 - Compute Cost of Goods Sold for a merchandiser...Ch. 2 - Calculate direct materials used (Learning...Ch. 2 - Compute Cost of Goods Manufactured (Learning...Ch. 2 - Describe other cost terms (Learning Objectives 6...Ch. 2 - Classify costs as fixed or variable (Learning...Ch. 2 - Prob. 2.17SECh. 2 - Classify costs along the value chain for a...Ch. 2 - Classify costs along the value chain for a...Ch. 2 - Value chain and sustainability efforts (Learning...Ch. 2 - Prob. 2.21AECh. 2 - Construct an income statement using product and...Ch. 2 - Work backward to find missing amounts (Learning...Ch. 2 - Prepare a retailers income statement (Learning...Ch. 2 - Compute direct materials used and Cost of Goods...Ch. 2 - Compute Cost of Goods Manufactured and Cost of...Ch. 2 - Continues E2-26A: Prepare income statement...Ch. 2 - Determine whether information is relevant...Ch. 2 - Prob. 2.29AECh. 2 - Classify costs along the value chain for a...Ch. 2 - Classify costs along the value chain for a...Ch. 2 - Value chain and sustainability efforts (Learning...Ch. 2 - Classify and calculate a manufacturers costs...Ch. 2 - Construct an income statement using product and...Ch. 2 - Work backward to find missing amounts (Learning...Ch. 2 - Prob. 2.36BECh. 2 - Compute direct materials used and Cost of Goods...Ch. 2 - Compute Cost of Goods Manufactured and Cost of...Ch. 2 - Continues E2-38B: Prepare income statement...Ch. 2 - Determine whether information is relevant...Ch. 2 - Prob. 2.41BECh. 2 - Classify costs along the value chain (Learning...Ch. 2 - Determine ending inventory balances (Learning...Ch. 2 - Prepare income statements (Learning Objective 5)...Ch. 2 - Prob. 2.45APCh. 2 - Prob. 2.46APCh. 2 - Classify costs along the value chain (Learning...Ch. 2 - Determine ending inventory balances (Learning...Ch. 2 - Prepare income statements (Learning Objective 5)...Ch. 2 - Prob. 2.50BPCh. 2 - Prob. 2.51BPCh. 2 - Calculate operating income (Learning Objective 5)...Ch. 2 - Prob. 2.53ACT
Knowledge Booster
Learn more about
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
- Match each of the following cost items with the value chain business function where you would expect the cost to be incurred: Cost Item 1. Labor time to repair products under warranty 2. Radio commercials 3. Labor costs of delivering customer orders 4. Testing of competitor's product 5. Direct manufacturing labor costs 6. Development of order tracking system for online sales 7. Design cost of new product brochures 8. Hours spent designing childproof bottles 9. Training costs for representatives to staff the customer call center 10. Installation of robotics equipment in manufacturing plant Business Functionarrow_forwardE18-17 Comparing job order costing versus process costing Learning Objective 1 For each of the following products or services, indicate if the cost would most likely be determined using a job order costing system or a process costing system. a. Soft drinks b. Automobile repairs c. Customized furniture d. Aluminum foil e. Lawn chairs f. Chocolate candy bars g. Hospital surgery h. Pencilsarrow_forwardApplying Excel - Data Visualization: Exercise (Part 2 of 2) On the Data Visualization - Student tab in your Excel spreadsheet, update the price per unit for all four products for Office Warehouse Inc. with the data below: Products Available Paper Pens Sticky Notes Envelopes Required: Create a Pivot Table and determine the following information while analyzing the data: 2. Which product has the highest total units ordered and the highest total sales? (Enter your Units Ordered to the nearest whole unit and your Total Sales to 2 decimal places.) Units Ordered Total Sales Price per Unit $20.00 per case: $ 9.00 per box $9.00 per package $ 4.50 per box Product Totalarrow_forward
- Cost Identification Following is a list of cost terms described in the chapter as well as a list of brief descriptive settings for each item. Cost terms: a. Opportunity cost b. Period cost c. Product cost d. Direct labor cost e. Selling cost f. Conversion cost g. Prime cost h. Direct materials cost i. Manufacturing overhead cost j. Administrative cost Settings: 1. Marcus Armstrong, manager of Timmins Optical, estimated that the cost of plastic, wages of the technician producing the lenses, and overhead totaled 30 per pair of single-vision lenses. 2. Linda was having a hard time deciding whether to return to school. She was concerned about the salary she would have to give up for the next 4 years. 3. Randy Harris is the finished goods warehouse manager for a medium-sized manufacturing firm. He is paid a salary of 90,000 per year. As he studied the financial statements prepared by the local certified public accounting firm, he wondered how his salary was treated. 4. Jamie Young is in charge of the legal department at company headquarters. Her salary is 95,000 per year. She reports to the chief executive officer. 5. All factory costs that are not classified as direct materials or direct labor. 6. The new product required machining, assembly, and painting. The design engineer asked the accounting department to estimate the labor cost of each of the three operations. The engineer supplied the estimated labor hours for each operation. 7. After obtaining the estimate of direct labor cost, the design engineer estimated the cost of the materials that would be used for the new product. 8. The design engineer totaled the costs of materials and direct labor for the new product. 9. The design engineer also estimated the cost of converting the raw materials into their final form. 10. The auditor for a soft drink bottling plant pointed out that the depreciation on the delivery trucks had been incorrectly assigned to product cost (through overhead). Accordingly, the depreciation charge was reallocated on the income statement. Required: Match the cost terms with the settings. More than one cost classification may be associated with each setting; however, select the setting that seems to fit the item best. When you are done, each cost term will be used just once.arrow_forwardTechPro offers instructional courses in e-commerce website design. The company holds classes in a building that it owns. Identify each of TechPro’s costs below as (a) variable or fixed and (b) direct or indirect by selecting the appropriate dropdowns. Assume the cost object is an individual class. Variable or Fixed Direct or Indirect 1. Instructional manuals for students 2. Advertising Fixed Indirect 3. Salesperson salary 4. Sales commissions 5. Computer printer ink 6. Depreciation on classroom buildingarrow_forwardCASE QUESTIONS AND ANSWERS1. Identify the services and/or programs to be included in thecost and profitability analysis. Infant childcareToddler childcarePre-K childcareRent - School districtRent - Head Start 2. Examine the costs listed in Table 2.a. Identify the direct costs associated with each serviceor program.Labor costs are the only direct costs associated withthe programs. Food costs would be direct costs tothe kitchen area but indirect to the end services.b. Which costs would be organization- or facility-sustainingcosts? Provide an argument for or against assigningthese costs to services or programs. The costs that would be considered to be organizationsustaining costs include depreciation, buildinginsurance, and interest expense on the mortgage debt.Both ACDC and the tenants use the facility and,thus, should participate in the costs associated withacquiring the space. 3. Identify the broad activity categories and create cost poolsby assigning the costs from Table 2 to the…arrow_forward
- Cost classifications College Carriers manufactures backpacks that are sold to students for use as book bags.Required: Identify a specific item in this company’s manufacturing, selling, or administrative processes for which the cost would be classified asa. Raw material.b. Direct labor.c. Variable manufacturing overhead.d. Fixed manufacturing overhead.e. Fixed administrative expense. f. Fixed indirect selling expense.g. Variable direct selling expense.arrow_forwardMatch each of the following cost items with the value chain business function where you would expect the cost to be incurred: Cost Item 1. Purchase of raw materials 2. Advertising 3. Salary of research scientists 4. Delivery expenses 5. Reengineering of product assembly process 6. Replacement labor expense for warranty repairs 7. Manufacturing supplies 8. Sales salaries 9. Purchase of CAD (computer-aided design) software 10. Salary of website manager Business Functionarrow_forward(ACADEMIC) E-LEARNING SERVICES SQU LIBRARIES SQU PORTALATTENDANCE urses / ACCT2121_yasserg_Spring21 / Midterm Exam One / Midterm Exam One Time left 1:49:27 Which of the following is correct with respect to closing out overapplied manufacturing overhead to Cost of Goods Sold versus closing it out to Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold? None of given answer is correct. O a. O b. The balance in the Work-in-Process account after allocation will be the same under either method. O C. Cost of Goods Sold will be lower if the overapplied overhead is closed out by allocating it to the inventory accounts as well as to Cost of Goods Sold. O d. The balance in the Work-in-Process account after allocation will be higher if the overapplied overhead is closed out by allocating it to all appropriate accounts. e. Operating income will be higher if all the overapplied overhead is closed out to Cost of Goods Sold. The total conversion cost for company XYZ was five…arrow_forward
- S18-1 Comparing job order costing versus process costing Learning Objective 1 Identify each costing system characteristic as job order costing or process costing. a. One Work-in-Process Inventory account b. Production cost reports c. Cost accumulated by process d. Job cost sheets e. Manufactures homogenous products through a series of uniform steps f. Multiple Work-in-Process Inventory accounts g. Costs transferred at end of period h. Manufactures batches of unique products or provides specialized servicesarrow_forwardMementos Academy is assessing whether to outsource its student enrolment processes. The general process followed by staff in the enrolment office is to first validate students’ prior academic record (e.g., secondary school results) and send an offer of enrolment, provide degree advice and enter students’ study program details into the student record system, and collect fees. The following table shows the costs associated with these three processes: Cost Validation Student records Fees collection Staff salaries 70,400 43,900 39,700 Data processing 9,200 32,500 7,900 Telephone 1,700 4,600 3,000 Postage - 1,500 4,000 Consumables 3,700 45,900 11,800 Electricity 1,600 3,100 3,000 Equipment depreciation 12,200 35,800 31,900 Insurance…arrow_forwardIn a team of two or three students, interview the manager/owner of a local business. In this interview, ask the manager/owner the following questions: A. Does the business collect and use cost information to make decisions? B. Does it have a specialist in cost estimation who works with this cost data? If not, who is responsible for the collection of cost information? Be as specific as possible. C. What type of cost information does the business collect and how is each type of information used? D. How important does the owner/manager believe cost information is to the success of the business? Then, write a report to the instructor summarizing the results of the interview. Content of the memo must include date of the interview, the name and title of the person interviewed, name and location of the business, type of business (service, merchandising, manufacturing) and brief description of the goods/services provided by the business, and responses to questions A-D.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningManagerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage LearningPrinciples of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY