Week 1 Assignment from the textbook
Nancy Schwartz
ACC/400
January 25, 2016
Lee Kroll

BE16.9
Star Repairs Co. does all the repair work for a medium-sized manufacturer of handheld computer games. The games are sent directly to Star, and after the games are repaired, Star bills the gam manufacturer for cost plus a 20 percent markup. In the month of February, purchases of parts (replacement parts) by Star amounted to $97,000, the beginning of inventory of parts was $38,500, and the ending inventory of parts was $15,250. Payments to repair technicians during the month of February totaled $52,500. Overhead incurred was $121,000.

a. What was the cost of materials used for repair work during the month of February? $38,500 + $97,000 – $15,250 = $120,250

b. What was the prime cost for February? $120,250 + $52,500 = $172,750

c. What was the conversion cost for February? $52,500 + $121,000 = $173,500

d. What was the total repair cost for February? $120,250 + $52,500 + 121,000 = $293,750

E16.1
Listed below are eight technical accounting terms introduced or emphasized in this chapter:

Work in Process Inventory Cost of finished goods manufactured Conversion costs Cost of Goods Sold Period costs Management accounting Product costs Manufacturing overhead

Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer “None” if the statement does not correctly describe any of the terms.

a. The preparation and use of accounting information designed to assist managers in planning and controlling the operations of a business. Management accounting

b. All manufacturing costs other than direct materials used and direct labor. Manufacturing overhead

c. Direct materials and direct labor used in manufacturing a product.