Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 2, Problem 42P
The following cost data for the year just ended pertain to Sentiments, Inc., a greeting card manufacturer:
*All services are provided to manufacturing departments.
§Cost of idle time is an overhead item; it is not included in the direct-labor wages given above.
†The rental of sales space was made necessary when the sales offices were converted to storage space for raw material.
Required:
- 1. Compute each of the following costs for the year just ended: (a) total prime costs, (b) total
manufacturing overhead costs , (c) total conversion costs, (d) total product costs, and (e) total period costs. - 2. One of the costs listed above is an opportunity cost. Identify this cost, and explain why it is an opportunity cost.
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The following cost data for the year just ended pertain to Sentiments, Incorporated, a greeting card manufacturer:
Direct material
Advertising expense
Depreciation on factory building
Direct labor: wages
Cost of finished goods inventory at year-end
Indirect labor: wages
Production supervisor's salary
Service department costs*
Direct labor: fringe benefits
Indirect labor: fringe benefits
Fringe benefits for production supervisor
Total overtime premiums paid
Cost of idle time: production employees
Administrative costs
Rental of office space for sales personnelt
Sales commissions
Product promotion costs
Required:
1. Compute each of the following costs for the year just ended:
All services are provided to manufacturing departments.
$Cost of idle time is an overhead item; it is not included in the direct-labor wages given above.
*The rental of sales space was made necessary when the sales offices were converted to storage…
1
For each of the following costs, identify the cost behavior as variable, mixed, or fixed:
1. Wages of assembly line workers
2. President's salary.
3. Plant utilities,
4. Sales force commissions
5. Shipping costs
6. Factory rent.
7. Research and development expenses
8. Property taxes
9. Advertising.
10. Supplies used in production
Chapter 2 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 2 - Distinguish between product costs and period...Ch. 2 - Why are product costs also called inventoriable...Ch. 2 - What is the most important difference between a...Ch. 2 - List several product costs incurred in the...Ch. 2 - Prob. 5RQCh. 2 - Why is the cost of idle time treated as...Ch. 2 - Explain why an overtime premium is included in...Ch. 2 - Prob. 8RQCh. 2 - Give examples to illustrate how the city of Tampa...Ch. 2 - Distinguish between fixed costs and variable...
Ch. 2 - How does the fixed cost per unit change as the...Ch. 2 - Prob. 12RQCh. 2 - Prob. 13RQCh. 2 - Would each of the following characteristics be a...Ch. 2 - List three direct costs of the food and beverage...Ch. 2 - List three costs that are likely to be...Ch. 2 - Which of the following costs are likely to be...Ch. 2 - Distinguish between out-of-pocket costs and...Ch. 2 - Define the terms sunk cost and differential cost.Ch. 2 - Distinguish between marginal and average costs.Ch. 2 - Prob. 21RQCh. 2 - Two years ago the manager of a large department...Ch. 2 - Indicate whether each of the following costs is a...Ch. 2 - For each case below, find the missing amount.Ch. 2 - A foundry employee worked a normal 40-hour shift,...Ch. 2 - A loom operator in a textiles factory earns 16 per...Ch. 2 - Consider the following costs that were incurred...Ch. 2 - Alexandria Aluminum Company, a manufacturer of...Ch. 2 - Prob. 30ECh. 2 - A hotel pays the phone company 100 per month plus...Ch. 2 - Prob. 32ECh. 2 - Orbital Communications, Inc. manufactures...Ch. 2 - The state Department of Education owns a computer...Ch. 2 - Prob. 35ECh. 2 - List the costs that would likely be included in...Ch. 2 - Consider the following cost items: 1. Salaries of...Ch. 2 - The following selected information was extracted...Ch. 2 - Prob. 39PCh. 2 - Mason Corporation began operations at the...Ch. 2 - Determine the missing amounts in each of the...Ch. 2 - The following cost data for the year just ended...Ch. 2 - The following data refer to San Fernando Fashions...Ch. 2 - Highlander Cutlery manufactures kitchen knives....Ch. 2 - Cape Cod Shirt Shop manufactures T-shirts and...Ch. 2 - Heartland Airways operates commuter flights in...Ch. 2 - San Diego Sheet Metal, Inc. incurs a variable cost...Ch. 2 - Hightide Upholstery Company manufactures a special...Ch. 2 - For each of the following costs, indicate whether...Ch. 2 - Indicate for each of the following costs whether...Ch. 2 - Water Technology, Inc. incurred the following...Ch. 2 - The following terms are used to describe various...Ch. 2 - Several costs incurred by Bayview Hotel and...Ch. 2 - Refer to Exhibit 23, and answer the following...Ch. 2 - Roberta Coy makes custom mooring covers for boats....Ch. 2 - The Department of Natural Resources is responsible...Ch. 2 - Prob. 57PCh. 2 - Prob. 58PCh. 2 - CompTech, Inc. manufactures printers for use with...Ch. 2 - You just started a summer internship with the...
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