Managerial Accounting Tutorial Set 1
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Questions and Answers

Which of the following best describes the relationship between product cost and period cost?

  • Period costs are expensed when the production process ends, while product costs are attached to inventory.
  • Product costs are expensed when the products are sold, while period costs are expensed in the period they are incurred. (correct)
  • Product costs are expensed in the period they are incurred, while period costs are attached to inventory.
  • Period costs are associated with manufacturing, while product costs are associated with selling and administration.

    • If a company is evaluating the cost of a single manufactured product, what costs would be categorized as prime costs?

  • Direct labor and manufacturing overhead.
  • Direct materials and direct labor. (correct)
  • Direct materials and manufacturing overhead.
  • Direct labor and indirect materials.

    • Why is manufacturing overhead typically treated as an indirect cost?

  • It can be directly traced to individual units of product with ease.
  • It cannot be specifically and easily assigned to individual units of output. (correct)
  • It includes both direct and indirect costs that are part of the production process.
  • It's the labor used to convert raw materials into finished goods.

    • How would the factory supervisor's salary be classified in relation to the product and the manufacturing division?

    <p>Indirect cost for the product, direct cost for the division. (B)</p> Signup and view all the answers

    Which of the statement is TRUE regarding fixed and variable costs?

    <p>A variable cost varies in total while a fixed cost is constant in total. (A)</p> Signup and view all the answers

    Based on the provided data, what is the total cost of raw materials used in production?

    <p>$180 (D)</p> Signup and view all the answers

    What is the cost of goods manufactured (COGM) for the year, according to the provided data?

    <p>$1,240 (A)</p> Signup and view all the answers

    Given the information, what is the cost of goods sold (COGS) for the year?

    <p>$1,160 (B)</p> Signup and view all the answers

    What is the net income for the year based on the data provided?

    <p>$360 (B)</p> Signup and view all the answers

    Which of the following costs is typically considered a fixed cost?

    <p>Rent on building (C)</p> Signup and view all the answers

    Which of the following costs is typically classified as a variable cost?

    <p>Direct materials (B)</p> Signup and view all the answers

    Naya Ltd. is analyzing costs. Which cost generally remains constant within a range of activity levels, in total?

    <p>Fixed costs like rent (D)</p> Signup and view all the answers

    If Naya Ltd. increases its production volume, which of these costs is most likely to increase proportionally?

    <p>Direct materials (A)</p> Signup and view all the answers

    What is the prime cost for the period?

    <p>$165,000 (B)</p> Signup and view all the answers

    What is the total conversion cost for the period?

    <p>$149,000 (A)</p> Signup and view all the answers

    What is the total production overhead?

    <p>$84,000 (A)</p> Signup and view all the answers

    What is the total production cost?

    <p>$355,000 (C)</p> Signup and view all the answers

    Using the high-low method, what is the variable cost per machine hour?

    <p>GH¢ 5.00 (B)</p> Signup and view all the answers

    What is the estimated monthly fixed power cost, using the high-low method?

    <p>GH¢ 9,500 (B)</p> Signup and view all the answers

    Using the mixed cost equation, what is the cost for 3,600 machine hours?

    <p>GH¢ 34,700 (B)</p> Signup and view all the answers

    Study Notes

    Managerial Accounting Tutorial Set 1

    • Question 1: Define and exemplify product cost, period cost, prime cost, conversion cost, direct cost, and indirect cost.
    • Question 2a: Manufacturing overhead is considered an indirect cost because it's not directly traceable to a specific product.
    • Question 2b: Examples of Direct and Indirect Costs:
      • Direct labor factory costs (direct)
      • Factory supervisor's salary for the product produced (indirect)
      • Factory supervisor's salary for the manufacturing division (indirect)
      • Manufacturing overhead costs for the products produced (indirect)
      • Manufacturing overhead costs for the manufacturing division (indirect)
    • Question 3: Disagree with the statement. A variable cost changes per unit of product, while a fixed cost remains constant in total per unit of product.
    • Question 4: Data from Hajiashikishiki's accounting records for a year is presented. (Data is given, calculations are needed based on the question)
    • Question 5: Classify costs as variable or fixed. (Examples include Rent on building-fixed, Direct labor-variable, Supervisor salaries-fixed, Direct materials-variable, Sales commissions-variable)
    • Question 6: Provides information related to selling expenses, direct materials (Component A, Component B), Direct Wages for Department X and Department Y for Naya Ltd.
    • Question 7: Alomo Gyata Company's utility costs are provided for several months. The task involves calculating the variable and fixed costs per machine hour. (Data on months, hours, cost and volume in machines is given, calculations needed)

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    Lancaster University Ghana Managerial Accounting Tutorial Set 1 PDF

    Description

    Dive into the fundamentals of Managerial Accounting with this quiz. Explore definitions and examples of various cost types such as product cost, period cost, direct and indirect costs. Test your understanding of manufacturing overhead and variable vs fixed costs through practical questions.

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