Study Guide Exam 1

Topics: Management accounting, Cost, Costs Pages: 2 (510 words) Published: October 19, 2014
55 minutes to take the test (20 questions), and it’s on paper not online. Need student ID, but ask if you can use driver’s license. Calculator is provided by teacher. 1. Rancor Inc. had a per-unit conversion cost of $2.50 during April and incurred direct materials cost of $100,000, direct labor costs of $75,000 and overhead costs of $45,000 during the month. How many units did they manufacture during the month? Conversion cost = Direct labor + Over head… $120,000 = 75,000 + 45,000… $120,000 / # of units = $2.50… 48,000 units. 2. Lakeland’s per-unit prime cost was $26 per unit, so how much direct labor cost did they incur during March? Prime cost = Dm + Dl… $26 x 5,000 = 100,000 + ? 130,000… 30,000 3. Total manufacturing costs of 110,000. They incurred 40,000 of direct labor cost and 30,000 of overhead cost during the month. If the materials inventory on January 1st was $3,000 less that the materials inventory on January 31st, what was the cost of materials purchased during the month? BI of DM + purchases DM (Direct Materials) – EI of DM = DM used… DM used + DL + OH = total manufacturing cost: ? (40,000) + 40,000 + 30,000 = 110,000 4. SOMETIMES you need to skip most of the information because you do not need all of it…Conversion costs = direct labor + overhead 5. Prime costs = Direct Materials used + Direct Labor

6. What was the amount of cost of goods manufactured last month? DM used (500,000) + DL (800,000) + OH (450,000) = Total Manufacturing Costs (1,750,000) + BI WIP (0) – EI WIP (0) = Cost of Goods Manufactured (1,750,000). 7. Cost of direct materials used (also called “put into production”): BI of DM (6,200) + purchases (21,000) – EI (7,100) = DM used (20,100). 8. Cost of Goods manufactured (69,600) = DM + DL + OH = TMC + BI WIP – EI WIP 9. Cost of Goods Sold = BI of finished goods + COGM – EI of finished goods = cost of goods sold… 3,300 + 69,600 – 2,700 = 70,200 10. Sales revenue (750 x 68) + cost of goods sold (750 x 34) = gross margin (25,500) –...
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