# Chapter 002, Managerial Accounting and Cost Concepts

| October 3, 2018

34.
An opportunity cost is:

A.
the difference in total
costs which results from selecting one alternative instead of another.
B.
the benefit forgone by
selecting one alternative instead of another.

C. a cost which may be saved by not adopting an alternative.

D.
a cost which may be shifted
to the future with little or no effect on current operations.

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Chapter 002, Managerial Accounting and Cost Concepts

39. Buford Company rents out a small unused portion of its factory to
another company for \$1,000 per month. The rental agreement will expire next
month, and rather than renew the agreement Buford Company is thinking about
using the space itself to store materials. The term to describe the \$1,000 per
month is:

A. sunk cost. B. period cost.

C.
opportunity cost. D. variable cost.

40.
The following costs were
incurred in August:
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Conversion costs during the month totaled:

A.
\$127,000

B. \$51,000

C.
\$52,000

D.
\$75,000

41. The following costs were incurred in August:
.0/msohtmlclip1/01/clip_image002.jpg”>

Prime costs during the month totaled:

A.
\$39,000

B. \$59,000

C.
\$96,000

D.
\$38,000

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Chapter 002, Managerial Accounting and Cost Concepts

42. During the month of August, direct labor cost totaled \$13,000 and
direct labor cost was 20% of prime cost. If total manufacturing costs during
August were \$88,000, the manufacturing overhead was:
A. \$75,000
B. \$23,000 C. \$65,000 D. \$52,000

43. In August direct labor was 60% of conversion cost. If the
manufacturing overhead for the month was \$54,000 and the direct materials cost
was \$34,000, the direct labor cost was:
A. \$36,000
B. \$22,667 C. \$51,000 D. \$81,000

44. Williams Company’s direct labor cost is 25% of its conversion
cost. If the manufacturing overhead for the last period was \$45,000 and the
direct materials cost was \$25,000, the direct labor cost was:

A. \$15,000
B. \$60,000 C. \$33,333 D. \$20,000

45.
Green Company’s costs for
the month of August were as follows: direct materials,

\$27,000; direct labor, \$34,000; selling, \$14,000; administrative,
\$12,000; and manufacturing overhead, \$44,000. The beginning work in process
inventory was \$16,000 and the ending work in process inventory was \$9,000. What
was the cost of goods manufactured for the month?
A. \$105,000
B.
\$132,000

C. \$138,000

D.
\$112,000

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Chapter 002, Managerial Accounting and Cost Concepts

46. Consider the following costs incurred in a recent period:
.0/msohtmlclip1/01/clip_image003.jpg”>

What was the total amount of the period costs listed above for the
period?

A.
\$78,000

B. \$71,000

C.
\$46,000

D.
\$37,000

47. The Lyons Company’s cost
of goods manufactured was \$120,000 when its sales were \$360,000 and its gross
margin was \$220,000. If the ending inventory of finished goods was \$30,000, the
beginning inventory of finished goods must have been:
A. \$20,000
B.
\$50,000

C. \$110,000

D.
\$150,000

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