Question 1

The following information pertains to Ball Company:
  39,800 units are sold during the year for $100 per unit.
Required:
a. What is the average manufacturing cost per unit?
b. What is the amount of ending finished goods inventory?
c. What is the amount of gross margin?

Accepted Answer

The answer of The following information pertains to Ball Company:
...

Question 2

A costing system traces direct costs and allocates indirect costs to products.

Accepted Answer

This is a defining characteristic of a costing system. Direct costs are easily identifiable with specific products, while indirect costs—such as utilities, rent, and administrative expenses—must be allocated to products using a predetermined cost driver, such as machine hours or labor hours.

Question 3

When making strategic decisions about which products to produce, managers do NOT need to know how revenues and costs vary with changes in output level.

Accepted Answer

Managers need to understand the relationship between revenues and costs and how they vary with changes in output level in order to make informed decisions about which products to produce. This information is essential for determining pricing, production volumes, and overall profitability.

Question 4

Management accountants help managers identify which information is relevant to a particular decision.

Accepted Answer

Management accountants are responsible for providing relevant financial and non-financial information to help managers make informed decisions. They analyze data and present it in a way that is useful to decision-makers, helping them identify which information is most relevant to their particular decision.

Quiz 2: An Introduction to Cost Terms and Purposes

The following information pertains to Ball Company: 39,800 units are sold during the year for $100 per unit. Required: a. What is the average manufacturing cost per unit? b. What is the amount of ending finished goods inventory? c. What is the amount of gross margin?

A costing system traces direct costs and allocates indirect costs to products.

When making strategic decisions about which products to produce, managers do NOT need to know how revenues and costs vary with changes in output level.

Management accountants help managers identify which information is relevant to a particular decision.