Direct costs:are incurred to benefit a details accounting duration.are incurred because of a particular decision.have the right to be easily traced to a particular price object. are the variable expenses of creating a product.

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Which of the following would certainly the majority of likely NOT be included as manufacturing overhead in a furniture factory?The price of the glue in a chair.The amount passist to the individual that stains a chair.The workman"s compensation insurance of the supervisor that oversees production.The manufacturing facility utilities of the department in which production takes location.
The salary passist to the president of a company would be classified on the revenue statement as a(n):governmental expense.direct labor cost.production overhead expense.selling price.
Wperiods phelp to the supervisor of the warehome where raw materials and also parts are temporarily stored before being supplied in production is thought about an instance of:Direct LaborPeriod CostA)YesYesB)YesNoC)NoYesD)NoNo
All of the following are examples of product prices except:depreciation on the company"s retail outlets.salary of the plant manager.insurance on the manufacturing facility tools.rental costs of factory tools.
Prime cost is composed of:direct labor and manufacturing overhead.direct materials and manufacturing overhead.straight products and also direct labor.direct products, straight labor and also production overhead.
Within the appropriate selection, variable costs have the right to be meant to:differ in complete in direct propercentage to changes in the task level.remajor consistent in total as the activity level transforms.boost on a per unit basis as the task level rises.increase on a per unit basis as the activity level decreases.
An example of a committed resolved price is:management training seminars.a irreversible devices lease.research and development.declaring.
Which prices will certainly readjust with a decrease in activity within the pertinent range?Total fixed expenses and full variable cost.Unit resolved costs and also full variable expense.Unit variable expense and also unit solved price.Unit addressed price and also full fixed price.
Fixed costs expressed on a per unit basis:boost through rises in task.decrease via rises in task.are not impacted by activity.should be ignored in making decisions considering that they cannot adjust.
In the standard expense formula Y = a + bX, what does the "Y" represent?total expense. total solved cost. full variable expense. variable cost per unit.
A price incurred in the previous that is not appropriate to any type of present decision is classified as a(n):duration expense.possibility expense.sunk expense.differential expense.
All of the following deserve to be differential expenses except:variable costs.sunk expenses.possibility expenses.resolved prices.
Contribution margin is:Sales less cost of products offered.Sales much less variable production, variable offering, and variable administrative expenses.Sales less variable production cost.Sales less all variable and also fixed costs.
Which of the following ideologies to preparing an earnings statement consists of a calculation of the gross margin?TraditionalApproachContributionApproachA)YesYesB)YesNoC)NoYesD)NoNo
The following prices were incurred in May:Direct materials$41,000 Direct labor$13,000 Manufacturing overhead$46,000 Selling expenses$18,000 Administrative expenses$15,000Conversion prices throughout the month totaled:$54,000$133,000$59,000$87,000
Kesterson Corporation has gave the complying with information:Cost per UnitCost per PeriodDirect materials$6.20 Direct labor$3.10 Variable manufacturing overhead$1.35 Fixed production overhead $14,000Sales commissions$1.50 Variable governmental expense$0.40 Fixed selling and governmental cost $4,500If 6,000 systems are produced, the complete amount of straight manufacturing cost incurred is closest to:$55,800$63,900$80,700$64,800
$55,800Direct materials$6.20+Direct labor 3.10=Direct manufacturing expense per unit (a)$9.30Number of units developed (b) 6,000Total direct production cost (a) × (b)$55,800
Pedregon Corporation has offered the complying with information:Cost per Unit Cost per PeriodDirect materials$6.35 Direct labor$3.75 Variable manufacturing overhead$1.50 Fixed production overhead $15,000Sales commissions$0.50 Variable administrative expense$0.55 Fixed offering and governmental cost $4,500If 4,000 devices are offered, the total variable cost is closest to:$58,400$66,200$50,600$46,400
$50,600Direct materials$6.35Direct labor 3.75Variable production overhead 1.50Sales commissions 0.50Variable administrative price 0.55Variable price per unit sold$12.65Variable price per unit sold (a)$12.65Number of units offered (b) 4,000Total variable expenses (a) × (b)$50,600
Mark is an engineer that has designed a teleinteractions gadget. He is encouraged that tbelow is a large potential industry for the gadget. Accordingly, he has actually decided to quit his present project and also begin a company to manufacture and also market the device.The cost of the raw products that will certainly be provided in production the computer board is:a sunk cost.a fixed expense.a duration cost.a variable cost
Dizzy Amusement Park is open from 8:00 am till midnight eexceptionally day of the year. Dizzy charges its patrons a everyday entrance fee of $30 per perchild which gives them unlimited access to all of the park"s 35 rides.For liability insurance, Dizzy pays a set monthly fee plus a little additional amount for eexceptionally patron entering the park. The expense of liability insurance would certainly ideal be described as a:fixed expense.combined expense. step-variable expense.true variable cost
Northwest Hospital is a full-service hospital that provides whatever from major surgical procedure and emergency room treatment to outpatient clinics.Required:For each of the complying with expenses incurred at Northwest Hospital, suggest whether it would certainly many likely be a direct price or an instraight price of the stated price object.
Ex.Catered food served to patientsA certain patientDirect Cost1.The wages of pediatric nursesThe pediatric departmentDirect Costselected answer correct2.Prescription drugsA specific patientDirect Costschosen answer correct3.Heating the hospitalThe pediatric departmentIndirect Costselected answer correct4.The salary of the head of pediatricsThe pediatric departmentDirect Costselected answer correct5.The salary of the head of pediatricsA particular pediatric patientIndirect Costselected answer correct6.Hospital chaplain"s salaryA specific patientIndirect Costschosen answer correct7.Lab tests by exterior contractorA certain patientDirect Costselected answer correct8.Lab tests by external contractorA specific departmentDirect Cost
The COMPUTER Works assembles practice computers from components provided by assorted manufacturers. The firm is extremely tiny and also its assembly shop and also retail sales save are hoprovided in a single facility in a Redmond, Washington, industrial park. Listed listed below are some of the costs that are incurred at the company.Required:For each price, suggest whether it would certainly the majority of most likely be classified as direct materials, direct labor, manufacturing overhead, offering, or an bureaucratic price.1.The cost of a hard drive installed in a computer.multiple option 1Direct labor costDirect materials expense Manufacturing overhead costSelling costAdministrative cost2. The cost of proclaiming in the Puobtain Sound Computer User newspaper.multiple option 2Direct labor costDirect materials costManufacturing overhead costSelling expense Administrative cost3.The weras of employees who assemble computers from components.multiple alternative 3Direct labor expense Direct products costManufacturing overhead costSelling costAdministrative cost4.Sales commissions passist to the company"s salesworld.multiple alternative 4Direct labor costDirect products costManufacturing overhead costSelling expense Administrative cost5.The salary of the assembly shop"s supervisor.multiple option 5Direct labor costDirect products costManufacturing overhead cost Selling costAdministrative cost6.The salary of the company"s accountant.multiple alternative 6Direct labor costDirect materials costManufacturing overhead costSelling costAdministrative cost7.Depreciation on equipment used to test assembled computer systems prior to release to customers.multiple choice 7Direct labor costDirect materials costManufacturing overhead cost Selling costAdministrative cost
1. Direct products cost2. Selling cost3. Direct labor cost4. Selling cost5. Manufacturing overhead cost6. Administrative cost7. Manufacturing overhead cost
Suppose that you have actually been provided a summer project as an intern at Issac Aircams, a agency that manufactures innovative spy camperiods for remote-regulated army reconnaissance aircraft. The company, which is privately owned, has approached a bank for a loan to assist finance its expansion. The bank calls for financial statements prior to giving the loan.Required:Classify each cost listed below as either a product price or a duration cost for the objective of preparing financial statements for the bank.
1.Depreciation on salespersons" cars.Period Costselected answer correct2.Rent on devices used in the manufacturing facility.Product Costselected answer correct3.Lubricants supplied for machine maintenance.Product Costschosen answer correct4.Incomes of personnel who work-related in the finiburned products wareresidence.Period Costselected answer correct5.Soap and also paper towels supplied by factory workers at the finish of a shift.Product Costselected answer correct6.Factory supervisors" salaries.Product Costselected answer correct7.Heat, water, and also power consumed in the factory.Product Costschosen answer correct8.Materials used for boxing products for delivery overseas. (Units are not normally boxed.)Period Costschosen answer correct9.Advertising expenses.Period Costschosen answer correct10.Workers" compensation insurance for manufacturing facility employees.Product Costschosen answer correct11.Depreciation on chairs and tables in the manufacturing facility lunchroom.Product Costschosen answer correct12.The wperiods of the receptionist in the bureaucratic offices.Period Costschosen answer correct13.Cost of leasing the corporate jet provided by the company"s executives.Period Costschosen answer correct14.The price of renting rooms at a Florida retype for the yearly sales conference.Period Costschosen answer correct15.The expense of packaging the company"s product.Product Cost
Northeast Hospital"s Radiology Department is considering replacing an old ineffective X-ray machine via a state-of-the-art digital X-ray machine. The brand-new machine would carry out better high quality X-rays in much less time and also at a lower price per X-ray. It would also call for much less power and would certainly use a shade laser printer to produce easily readable X-ray imperiods. Instead of investing the funds in the brand-new X-ray machine, the Laboratory Department is lobbying the hospital"s monitoring to buy a new DNA analyzer.Required:Classify each item as a differential cost, a sunk expense, or an possibility expense in the decision to replace the old X-ray machine via a brand-new machine. If namong the categories apply for a details item, choose "None".
Ex.Cost of X-ray film supplied in the old machineDifferential Cost1.Cost of the old X-ray machineSunk Costschosen answer correct2.The salary of the head of the Radiology DepartmentNoneselected answer correct3.The salary of the head of the Laboratory DepartmentNoneschosen answer correct4.Cost of the new shade laser printerDifferential Costschosen answer correct5.Rent on the space occupied by RadiologyNoneselected answer correct6.The price of preserving the old machineDifferential Costselected answer correct7.Benefits from a brand-new DNA analyzerOpportunity Costselected answer correct8.Cost of electrical energy to run the X-ray machinesDifferential CostNote: The costs of the salaries of the head of the Radiology Department and Laboratory Department and the rent on the area populated by Radiology are neither differential expenses, nor chance costs, nor sunk prices. These costs carry out not differ between the alternatives and also therefore are irpertinent in the decision, yet they are not sunk prices bereason they occur later on.

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Cherokee Inc. is a merchandiser that gave the adhering to information:Amount Number of systems offered 20,000Selling price per unit$30Variable selling cost per unit$4Variable governmental price per unit$2Total solved selling expense$40,000Total solved administrative expense$30,000Beginning merchandise inventory$24,000Ending merchandise inventory$44,000Merchandise purchases$180,000Required:1. Prepare a conventional earnings statement.2. Prepare a contribution format revenue statement.
1. Salesselected answer correct$600,000schosen answer correctCost of items soldschosen answer correct160,000schosen answer correctGross marginschosen answer correct440,000selected answer correctSelling and administrative expenses:Selling expensesselected answer correct$120,000schosen answer correctAdministrative expensesselected answer correct70,000selected answer correctnot attemptednot attemptednot attemptednot attempted190,000Net operating incomeselected answer correct$250,0001.Sales: ($30 per unit × 20,000 units) = $600,000Cost of products sold: ($24,000 + $180,000 - $44,000) = $160,000Selling expenses: (($4 per unit × 20,000 units) + $40,000) = $120,000Administrative expenses: (($2 per unit × 20,000 units) + $30,000) = $70,0002. Salesselected answer correct$600,000schosen answer correctVariable expenses:Cost of items soldselected answer correct160,000selected answer correctSelling expensesschosen answer correct80,000schosen answer correctAdministrative expensesschosen answer correct40,000schosen answer correctnot attemptednot attemptednot attemptednot attempted280,000Contribution marginschosen answer correct320,000selected answer correctFixed expenses:Selling expensesselected answer correct40,000selected answer correctAdministrative expensesselected answer correct30,000selected answer correctnot attemptednot attemptednot attemptednot attempted70,000Net operating incomeschosen answer correct$250,0002. Cost of items sold: ($24,000 + $180,000 - $44,000) = $160,000Selling expenses: ($4 per unit × 20,000 units) = $80,000Administrative expenses: ($2 per unit × 20,000 units) = $40,000
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