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Chapter 16: Q16-5SE-b (page 885)
Identifying product costs and period costs Classify each cost of a paper manufacturer as either a product cost or a period cost:
b. Cost of computer software to track WIP Inventory
The cost of the computer software to track WIP inventory will come under the product cost.
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Computing cost of goods manufactured
Use the following inventory data for Caddy Golf Company to compute the cost of goods manufactured for the year:
Direct Materials Used $ 12,000
Manufacturing Overhead 21,000
Work-in-Process Inventory:
Beginning Balance 1,000
Ending Balance 5,000
Direct Labor 9,000
Finished Goods Inventory:
Beginning Balance 18,000
Ending Balance 4,000
Match the definition to the key term.
13. Triple bottom line
14. Value chain
15. Just-in-time management
16. Enterprise resource planning
17. Total quality management
a. A cost management system in which a company produces products just in time to satisfy needs.
b. A philosophy designed to integrate all organizational areas in order to provide customers with superior products and services, while meeting organizational goals throughout the value chain.
c. Software system that can integrate all of a company’s functions, departments, and data into a single system.
d. Evaluating a company’s performance by its economic (profits), social (people), and environmental (planet) impact.
e. Includes all activities that add value to a company’s products and services
Computing cost of goods manufactured
Consider the following partially completed schedules of cost of goods manufactured. Compute the missing amounts.
Banner, Inc. Larry’s Bakery Sports Gear
Beginning Work-in-Process Inventory \( (a) \) 40,800 \( 2,200
Direct Materials Used 14,400 35,900 (g)
Direct Labor 10,300 20,100 1,900
Manufacturing Overhead (b) 10,000 900
Total Manufacturing Costs Incurred during the Year 45,200 (d) (h)
Total Manufacturing Costs to Account for 55,400 (e) 8,300
Ending Work-in-Process Inventory (c) (25,500) (2,600)
Cost of Goods Manufactured \) 50,500 \( (f) \) (i)
Identify each cost as a period cost or a product cost. If it is a product cost, further indicate if the cost is direct materials, direct labor, or manufacturing overhead. Then determine if the product cost is a prime cost and/or a conversion cost.
11.Salary of the sales manager
Calculating unit cost per service
Marx and Tyler provides hair-cutting services in the local community. In February, the business cut the hair of 190 clients, earned \(4,800 in revenues, and incurred the following operating costs:
Hair Supplies Expense \) 950
Wages Expense 548
Utilities Expense 190
Depreciation Expense—Equipment 60
What was the cost of service to provide one haircut?
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