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…
Which 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 expense
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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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 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_forwardHow does a manufacturing company calculate the cost of goods sold? How is this different from a merchandising company?arrow_forwarda. Road Warrior Motor is a company that manufactures and sells cars. Indicate whether each of the following should be considered a product cost or a period cost for the company. If you identify the item as a product cost, also indicate whether it is a direct material cost, direct labor cost, or overhead cost. Write “1” under the correct answer. For example, the answer to item 0 is “product cost” and “overhead cost.” 0. Property taxes on factory building. 1. Cost of buying the metal needed to manufacture cars. 2. Depreciation on the furniture used in the sales showroom. 3. Cost of electricity used in the factories. 4. Salaries of factory workers who manufacture cars. 5. Salaries of factory security guards. 6. Salaries of office workers in the financial department. 7. Depreciation on the warehouse used to store raw materials. 8. Income taxes paid to the government. b. The company manufactured 100 cars in January 2023 and has not sold any of them by the end of January. If the company…arrow_forward
- Which of the following manufacturing costs is an indirect cost of producing a product? a.commissions for sales personnel b.memory chips for a microcomputer manufacturer c.oil lubricants used for factory machinery d.hourly wages of an assembly workerarrow_forwardWho of the agreed in advance is not a cost of the product? The cost of the factory's fuel The manufacturing foreman's office's power costs Depreciation on factory-installed equipment The price of delivering completed goods to clients.arrow_forwardWhat types of costs are customarily included in the cost of manufactured products under (a) the absorption costing concept and (b) the variable costing concept? 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? Marley Company has the following information for March: Sales $912,000 Variable cost of goods sold 474,000 Fixed manufacturing costs 82,000 Variable selling and administrative expenses 238,100 Fixed selling and administrative expenses 54,700 Determine (a) the manufacturing margin, (b) the contribution margin, and (c) operating income for Marley Company for the month of March.arrow_forward
- 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 costarrow_forwardwhich of the following is a product cost for a manufacturing company : a- insurance on the corporate headquarters building b- property taxes on a factory c- depreciation on a salesperson vehicle d- the salary of a sales managerarrow_forwardInsurance 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_forward
- Which of the following are parts S,G&A for General Motors? Cost of purchasing assembly line robots Cost of steel and aluminum Salaries of workers on assembly line Salaries of marketing/advertising people Interest expense on bonds Cost of insurance for headquarters Federal income tax Salary of CFOarrow_forwardWhich of the following costs would be considered a period rather than a product cost in a manufacturing company? Manufacturing equipment depreciation. Property taxes on corporate headquarters. Direct materials costs. Electrical costs to light the production facility.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
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Cost Classifications - Managerial Accounting- Fixed Costs Variable Costs Direct & Indirect Costs; Author: Accounting Instruction, Help, & How To;https://www.youtube.com/watch?v=QQd1_gEF1yM;License: Standard Youtube License