A schedule of the cost of finished goods manufactured is a helpful tool in determining the per-unit cost of manufactured products. Explain several ways in which information about per-unit manufacturing costs is used by (a) management accountants and (b) financial accountants.

Early in the year, John Raymond founded Raymond Engineering Co. for the purpose of manufacturing a special flow control valve that he had designed. Shortly after year-end, the company's accountant was injured in a skiing accident, and no year-end financial statements were prepared. However, the accountant had correctly determined the year-end inventories at the following amounts:

As this was the first year of operations, there were no beginning inventories. While the accountant was in the hospital, Raymond improperly prepared the following income statement from the company's accounting records:

Raymond was very disappointed in these operating results. He stated, "Not only did we lose more than $\$ 50,000$ this year, but look at our unit production costs. We sold 10,000 units this year at a cost of $\$ 663,600$; that amounts to a cost of $\$ 66.36$ per unit. I know some of our competitors are able to manufacture similar valves for about $\$ 35$ per unit. I don't need an accountant to know that this business is a failure." a. Prepare a schedule of the cost of finished goods manufactured for the year. (As there were no beginning inventories, your schedule will start with "Manufacturing costs assigned to production:".) Show a supporting computation for the cost of direct materials used during the year. b. Compute the average cost per unit manufactured.

What is a cash budget, and how can this statement be used to help reduce the amount of cash that a firm needs to carry? What are the advantages and disadvantages of daily over monthly cash budgets, and how might a cash budget be used when a firm is negotiating a loan from its bank?

What is marginal cost? Why is the supply curve referred to as a marginal cost curve?

The operating budgets of a company include a ___________.

a. The cash budget.
b. The capital expenditures budget
c. The financing budget
d. The production budget b.

Go to the following Web site for the Coca-Cola Company:

http://www.worldofcoca-cola.com

Select the "Virtual Tour" from the list of activities on the left-hand side of the screen. Choose "Bottle work" to see the bottling operation.

c. Identify at least three types of overhead costs.

Go to the following Web site for the Coca-Cola Company:

http://www.worldofcoca-cola.com

Select the "Virtual Tour" from the list of activities on the left-hand side of the screen. Choose "Bottle work" to see the bottling operation.

b. Identify at least three types of labor. For each type of labor, identify it as direct or indirect.

Go to the following Web site for the Coca-Cola Company:

http://www.worldofcoca-cola.com

Select the "Virtual Tour" from the list of activities on the left-hand side of the screen. Choose "Bottle work" to see the bottling operation.

a. Determine five direct materials that are used to create Coca-Cola.

Briefly describe the computation of the cost of finished goods manufactured as it appears in a schedule of the cost of finished goods manufactured.

Classify each of the following costs as a product cost or period cost. If it is a product cost, classify it as direct (or indirect) materials, direct (or indirect) labor, or overhead.

h. Bolts used by Trek Bicycle Corporation to secure the bike parts to the frame.

Classify each of the following costs as a product cost or period cost. If it is a product cost, classify it as direct (or indirect) materials, direct (or indirect) labor, or overhead.

g. Health care costs for the office workers at the headquarters of Johnson $\&$ Johnson Company.

Classify each of the following costs as a product cost or period cost. If it is a product cost, classify it as direct (or indirect) materials, direct (or indirect) labor, or overhead.

f. Bonus paid to all production employees of General Motors at the end of a profitable fiscal year.

Classify each of the following costs as a product cost or period cost. If it is a product cost, classify it as direct (or indirect) materials, direct (or indirect) labor, or overhead.

e. Insurance paid on the Target warehouse holding merchandise inventory.

Classify each of the following costs as a product cost or period cost. If it is a product cost, classify it as direct (or indirect) materials, direct (or indirect) labor, or overhead.

d. Insurance paid on the Target retail stores in Michigan.