ACG 2071 Chapter 2 HW

Typically has a single inventory account
Merchandiser
Typically has no inventory
Service company
Typically has several kinds of inventory
Manufacturer
Depreciation of a building
Indirect cost
Cost of costume jewelry on the mannequins in junior department
Direct cost
Cost of bags used to package customer purchases at the main registers for the store
Indirect cost
The Medina Kohl’s store managers salary
Indirect Cost
Cost of the security staff at the Medina salary
Indirect cost
Manager of junior department
Direct cost
Junior department sale clerks
Direct cost
Cost of juniors clothing
Direct cost
Cost of hangers used to display the clothing in the store
Indirect cost
Electricity for the building
Indirect cost
Cost of radio advertising for the store
Indirect cost
Juniors clothing buyers salaries
Indirect cost
Cost of milk purchased from local dairy farmers
Product DM
Depreciation of marketing departments computers
Period
Property tax on dairy processing plant
Product MOH
Gas used to operate refrigerated trucks delivering finished dairy products of grocery store
Period
Company presidents annual bonus
Period
Depreciation on refrigerated trucks used to collect raw milk from local dairy farmers
Product MOH
Plastic gallon containers in which milk is packaged
Product DM
Research and development on improving milk pasteurization process
Period
Television advertisments for Dairy plains products
Period
Lubricants used in running bottling machines
Product MOH
Wages and salaries paid to machine operations at dairy processing plant
Product DL
Calculation of COGS
Beg. inv.
+ purchases
= Cost of goods available for sale
– ending inv.
= COGS
Calculation of Income Statement
Sales Revenue
-COGS
= GP
– Operating expenses
= Operating income
Airplane seat
DM
Production supervisor salaries
IL
Depreciation on forklifts
Other MOH
Machine lubricants
IM
Factory janitors wages
IL
Assembly workers wages
DL
Property tax on corporate marketing offices
Period
Plant utilities
Other MOH
Cost of warranty repairs
Period
Machine operators health insurance
DL
Depreciation on admin. offices
Period
Cost of designing new plant layout
Period
Jet engines
DM
Calculation of Total Manufacturing overhead cost
IL+ IM+ Other MOH
Calculation of Total Inventoriable products
DM+DL+MOH
Calculation of Total Prime Cost
DL+DM
Calculation of Total Conversion Cost
DL+MOH
Interest rate paid on invested funds when deciding how much inventory to keep on hand
Relevant
Cost of computers purchased six months ago when deciding whether to upgrade to computers with a faster processing sped
Irrelevant
The property tax rates in different locales when deciding where to locate the companys hq
Relevant
The type of fuel used by delivery vans when deciding which make and model of van to purchase for the companys delivery van fleet
Relevant
Cost of operating automated production machinery vs the cost of direct labor when deciding whether to automate production
Relevant
The fair market value of old manufacturing equipment when deciding whether to replace it with new equipment
Relevant
Cost of purchasing packaging materials from an outside vendor when deciding whether to continue manufacturing the packaging materials in house
Relevant
Depreciation expense on old manufacturing equipment when deciding whether to replace it with newer equipment
The total amount of the restaurants fixed costs when deciding whether to add additional items to the menu
The cost of land purchased three years ago when deciding whether to build on the land now or wait two more years
Irrelevant
Companies want to run at full capacity to better utilize the resources they spend on ___ costs. The more units they produce, the ____ the ___ cost per unit.
Fixed, lower, average fixed cost
Calculation for monthly profit
Total revenue- total cost
Machine operators health insurance
DL