FUNDAMENTALS OF COST ACCOUNTING
6th Edition
ISBN: 9781266742040
Author: LANEN
Publisher: MCG
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Chapter 2, Problem 28E
Basic Concepts
For each of the following costs incurred in a manufacturing operation, indicate whether they are included in prime costs (P), conversion costs (C), or both (B):
- a. Assembly line worker’s salary.
- b. Direct materials used in the production process.
- c. Property taxes on the factory.
- d. Lubricating oil for plant machines.
- e. Transportation-in costs on materials purchased.
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Students have asked these similar questions
1. Prime vs conversion cost. For each of the following costs incurred in a manufacturing
operation, indicate whether they are included in prime costs (P), conversion costs (C), or
both (B).
a. Property taxes on the factory C
b. Wages for drivers delivering the final product from production plant to customers C
c. Assembly line worker's salary B
d. Direct materials used in production process P
e. Lubricating oil for plant machines P
f Fixed manufacturing overhead
Identify whether the following items should be included in Direct Materials (DM), Direct
Labor (DL), Manufacturing Overhead (MO) or Period Costs (PC)
(a) Assembly line wages
(b) Raw materials used directly in product
(c) Depreciation on office equipment
(d) Property taxes on factory building
(e) Rent on factory building
(f) Sales commissions
(g) Depreciation on factory equipment
(h) Factory utilities
(i) Wages for factory maintenance workers
0) Advertising
(k) Indirect materials used in production
(1) Factory manager's salary
Identify each of the following costs as either a product cost (PROD) or a period cost (PER). Rent on factory building.
Chapter 2 Solutions
FUNDAMENTALS OF COST ACCOUNTING
Ch. 2 - What is the difference in meaning between the...Ch. 2 - What is the difference between product costs and...Ch. 2 - What is the difference between outlay cost and...Ch. 2 - Prob. 4RQCh. 2 - Is cost-of-goods sold an expense?Ch. 2 - Is cost-of-goods a product cost or a period cost?Ch. 2 - What are the similarities between the Direct...Ch. 2 - What are the three categories of product cost in a...Ch. 2 - Prob. 9RQCh. 2 - Prob. 10RQ
Ch. 2 - What do the terms step costs and semivariable...Ch. 2 - What do the terms variable costs and fixed costs...Ch. 2 - How does a value income statement differ from a...Ch. 2 - Why is a value income statement useful to...Ch. 2 - Materials and labor are always direct costs, and...Ch. 2 - Prob. 16CADQCh. 2 - In evaluating product profitability, we can ignore...Ch. 2 - Prob. 18CADQCh. 2 - The friend in question 2-18 decides that she does...Ch. 2 - Consider a digital music service such as those...Ch. 2 - Consider a ride-sharing service such as Uber or...Ch. 2 - Pick a unit of a hospital (for example, intensive...Ch. 2 - The dean of Midstate University Business School is...Ch. 2 - Prob. 24CADQCh. 2 - Prob. 25CADQCh. 2 - Basic Concepts For each of the following...Ch. 2 - Basic Concepts For each of the following costs...Ch. 2 - Basic Concepts For each of the following costs...Ch. 2 - Basic Concepts Place the number of the appropriate...Ch. 2 - Basic Concepts Intercontinental, Inc., provides...Ch. 2 - Prob. 31ECh. 2 - For each of the following costs incurred in a...Ch. 2 - Basic Concepts For each of the following costs...Ch. 2 - Basic Concepts The following data apply to the...Ch. 2 - Cost AllocationEthical Issues In one of its...Ch. 2 - Cost AllocationEthical Issues Star Buck, a coffee...Ch. 2 - Prepare Statements for a Manufacturing Company The...Ch. 2 - Prepare Statements for a Service Company Chucks...Ch. 2 - Prepare Statements for a Service Company Where2...Ch. 2 - Prepare Statements for a Service Company The...Ch. 2 - Prepare Statements for a Service Company Lead!...Ch. 2 - Prepare Statements for a Manufacturing Company The...Ch. 2 - Basic Concepts The following data refer to one...Ch. 2 - Basic Concepts The following data refers to one...Ch. 2 - Prepare Statements for a Merchandising Company The...Ch. 2 - Prepare Statements for a Merchandising Company...Ch. 2 - Cost Behavior and Forecasting Dayton, Inc....Ch. 2 - Sophia’s Restaurant served 5,000 meals last...Ch. 2 - Prob. 49ECh. 2 - Components of Full Costs Madrid Corporation has...Ch. 2 - Prob. 51ECh. 2 - Components of Full Costs Larcker Manufacturings...Ch. 2 - Prob. 53ECh. 2 - Gross Margin and Contribution Margin Income...Ch. 2 - Gross Margin and Contribution Margin Income...Ch. 2 - Value Income Statement Ralphs Restaurant has the...Ch. 2 - Value Income Statement DeLuxe Limo Service has the...Ch. 2 - Cost Concepts The following information comes from...Ch. 2 - Cost Concepts The controller at Lawrence...Ch. 2 - Cost Concepts Columbia Products produced and sold...Ch. 2 - Prepare Statements for a Manufacturing Company...Ch. 2 - Prepare Statements for a Manufacturing Company...Ch. 2 - Prepare Statements for a Manufacturing Company The...Ch. 2 - Cost Allocation with Cost Flow Diagram Coastal...Ch. 2 - Cost Allocation with Cost Flow Diagram Wayne...Ch. 2 - Cost Allocation with Cost Flow Diagram The library...Ch. 2 - Greenfield Consultants conducts analyses of public...Ch. 2 - Consider the Business Application, “Indirect Costs...Ch. 2 - Find the Unknown Information After a computer...Ch. 2 - Find the Unknown Information Just before class...Ch. 2 - Cost Allocation and Regulated Prices The City of...Ch. 2 - Koufax Materials Corporation produces plastic...Ch. 2 - Reconstruct Financial Statements San Ysidro...Ch. 2 - Westlake, Inc., produces metal fittings for the...Ch. 2 - Finding Unknowns Marys Mugs produces and sells...Ch. 2 - Finding Unknowns BST Partners has developed a new...
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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
- Which of the following costs would be included in the cost of a manufactured product according to the variable costing concept: (A) rent on factory building, (B) direct materials, (C) property taxes on factory building, (D) electricity purchased to operate factory equipment, (E) salary of factory supervisor, (F) depreciation on factory building, (G) direct labor?arrow_forwardAssign each of the following expenses to either the machine cost pool or the factory cost pool: A. property taxes B. heat and air-conditioning C. electricity, machines D. plant depreciation E. electricity, plant F. machine maintenance wagesarrow_forwardConversion costs include all of the following except: A. wages of production workers B. depreciation on factory equipment C. factory utilities D. direct materials purchasedarrow_forward
- Which of the following is a conversion cost? raw materials direct materials administrative expenses factory depreciation expensesarrow_forwardWhich of the following is a prime cost? A. direct labor B. work in process inventory C. administrative labor D. factory maintenance expensesarrow_forwardFreeman Furnishings has summarized its data as shown: Compute the cost of goods manufactured, assuming that the overhead is allocated based on direct labor hoursarrow_forward
- During production, how are the costs in process costing accumulated? A. to cost of goods sold B. to each individual product C. to manufacturing overhead D. to each individual departmentarrow_forwardWhich of the following is the step in which materials, labor, and overhead are detailed? A. determining the units to which costs are assigned B. determining the equivalent units of production C. determining the cost per equivalent units D. allocating the costs to the units transferred out and the units partially completedarrow_forwardOverhead costs are assigned to each product based on __________________. A. the proportion of that products use of the cost driver B. a predetermined overhead rate for a single cost driver C. price of the product D. machine hours per productarrow_forward
- Interview questions are asked to determine a. what activities are being performed. b. who performs the activities. c. the relative amount of time spent on each activity by individual workers. d. possible activity drivers for assigning costs to products. e. All of these.arrow_forwardWhat are factory overhead expenses, and what distinguishes them from other manufacturing costs? What other terms are used to describe factory overhead expenses?arrow_forwardThe activity base for service industries is most likely to be _________________. A. machine hours B. administrative salaries C. direct labor cost D. direct labor hoursarrow_forward
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