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ACCT 2110; Test 1

Managerial Accounting; Test 1; Ch 15-17; SG

QuestionAnswer
Manufacturing consist of... activities & processes that convert raw materials into finished goods
Manufacturing cost are usually classified as follows (3): direct materials, direct labor, & manufacturing overhead.
__ __ are the basic materials and parts that are to be used in the manufacturing process. Raw Materials
Raw materials that can be physically and directly associated with the finished product during the manufacturing process are called... direct materials
__ __ is the work of factory employees that can be physically & directly associated with converting raw materials into finished goods. Direct labor
The ways of maintenance people, timekeeper, & supervisors are usually identified as __ __. Their efforts have no physical association with the finished product. indirect labor.
Like indirect materials, indirect labor is part of... manufacturing overhead
__ __ consists of costs that are directly associated with the manufacture of the finished product. (These cost may also be manufacturing costs that cannot be classified as direct materials or direct labor). Manufacturing Overhead
Manufacturing overhead includes (5): indirect materials, indirect labor, depreciation on factory buildings & machines insurance, taxes, & maintenance on factory facilities
In order to assist in carrying out management functions, most companies prepare organizational charts to show the... interrelationships of activities, & the delegation of authority within the company.
The __ __ __ has overall responsibility for managing the business chief executive officer (CEO)
The __ __ __ is responsible for all the accounting and finance issues the company faces. chief financial officer (CFO)
The following questions need answering in order for the 3 management functions to perform effectively (4): (1) What costs are involved in making the product or providing a service? (2) If production volume is decreased, will costs decrease? (3) What impact will automation have on total costs? (4) How can costs best be controlled?
What is the order of the management functions? Stockholders -> Board of Directors -> Chief Executive Officer & President -> General Counsel/Secretary -> VP -> VP Operations -> VP HR -> VP Finance/Chief Finance Officer -> Treasurer -> Controller
If the total manufacturing costs are greater than the cost of goods manufactured... Work in Process Inventory has increased
The Cost of Goods Manufactured is calculated as follows: Beginning WIP + Direct Materials Used + Direct Labor + Manufacturing Overhead – Ending WIP.
Managerial accounting information pertains to... subunits of the entity
Under- or overapplied overhead is usually considered to be an... adjustment to cost of goods sold
Underapplied overhead means that (4): Manufacturing overhead has a debit balance. The overhead assigned to work in process is less than the overhead incurred. Underapplied overhead is debited to Cost of Goods Sold. The actual is greater.
Overapplied overhead means that (4): Manufacturing overhead has a credit balance. The overhead assigned to work in process is greater than the overhead incurred. Overapplied overhead is credited to Cost of Goods Sold. The actual is less.
On the cost of goods manufactured schedule, the cost of goods manufactured agrees with the amount transferred from... Work in Process Inventory to Finished Goods during the period.
__ __ __ shows the cost of raw materials on hand (asset). Raw Materials Inventory
The costs of raw materials purchased are ___ to Raw Materials Inventory when the materials are received. debited
When you take materials out of Raw Materials Inventory & put in it WIP Overhead, Raw Materials Inventory is ___. credited
A __ __ __ is used when a series of connected manufacturing processes or departments produce a large volume of similar products. (deals with similar products) process cost system
Process costing accounts for and accumulates product-related costs for a... period of time.
Job order & process cost systems are similar in (3) ways: The manufacturing cost elements. The accumulation of the costs of materials, labor, and overhead. The flow of costs (although the methods of assigning costs differ significantly).
Job order & process cost systems are different in (4) ways: The number of work in process accounts used. Documents used to track costs. The point at which costs are totaled. Unit cost computations.
A production cost report will show... quantity & cost data for a production department.
Companies use a process cost system to supply cost to... similar products that are massed produced in a continuous fashion.
In a __ __ __ , fewer materials requisition slips are usually required because materials are used for processes. process cost system
In a __ __ __, more materials requisition slips are used because materials are used for specific jobs. job order costing
Cost of goods sold is obtained from... the finished goods inventory records.
Cost accounting involves the (3): measuring, recording, & reporting of product costs.
A __ __ __ consists of accounts for the various manufacturing costs. These accounts are fully integrated into the general ledger of a company. cost accounting system
An important feature of a cost accounting system is the use of a __ __ __. Such a system provides immediate, up-to-date information on the cost of a product. perpetual inventory system
There are (2) basic types of cost accounting systems: job order & process cost
What is an essential accounting record in assigning costs to jobs? a job cost sheet.
A __ __ __ is a form used to record the costs chargeable to a specific job & to determine the total & unit cost of the completed job. (Postings are made daily) job cost sheet
The job cost sheet summarizes the... (Jobs completed are transferred to finished goods to await sale) cost of jobs completed and not completed at the end of the accounting period
Job cost sheets constitute the.... subsidiary ledger for the Work in Process Inventory account.
Equivalent units of production measure the... work done during the period, expressed in terms of fully completed units.
The equivalent units of production concept is used to determine the... cost per unit of completed product.
Equivalent units of production are determined by... apply the percentage of work done to the physical units of output.
The method of computing equivalent units is referred to as the... weighted average method.
What method is most widely used in practice? weighted average method
What is the formula for Equivalents Units of Production? Units Completed & Transferred Out + Equivalent Units of Ending Work in Process
The Cost of Goods Manufactured sheet is as follows: $WIP-B DM $RMI-B (1) RM purchased (1) RM AFS (1) (Less: RMI-E) (1) $DMU [2] DL [2] MO [2] TMO TCWIP (Less: WIP-E) $CGM
The Income Statement (Partial) sheet is as follows: *subtract sales revenue - cost of goods sold $Sales Rev <3> CGS $FG-B CGM CGAFS (Less: FG-E) CGS <3> $GP <3>
The (Partial) Balance sheet is as follows: Current Assets Inventories $FG (1) *ending WIP (1) *ending RM (1) *ending $TCA
Ex 16-2; Prepare summary journal entries to record (i) the requisition slips, (ii) the time tickets, (iii) the assignment of manufacturing overhead to jobs, and (iv) the completion of Job No. 429 (i) WIPI, MO (RMI) (ii) WIPI, MO (FL) (iii) WIPI [LTT 431 * OR] (MO) (iv) FGI, WIPI [429 top + 429 MRS + 429 LTT + <LTT 429 *OR>]
Ex 16-6; job cost sheet with part a (1-3) & b. (a) Source: DM - MRS, DL - TT, & MO - POR. POR: MO / DL. TC: add the columns up separately for DM + DL + MO = n, then n / Quantity. (b) FGI = n (WIPI = n)
Ex 17-13, Production Cost Report (Quantities -- 1): *CCP = #/# complete UTBAF WIP-B (1) Started into Produc.(1) TU (1) UAF TO (1-3) WIP-E (1-3) [WIP-E * CCP = 3rd column)
Ex 17-13; Production Cost Report (Cost -- 2): UC a $TC (2-4) [M + M = M; CC + L + OH = CC] b EU (2-3) $UC a / b (2-4) CTBAF $WIP-B (4) Started into produc. (4) $TC (4)
Ex 17-13; Production Cost Report (Cost Reconciliation Schedule -- 3): CAF $TO (4) [TO * TUC) WIP-E $M (3) [WIP-E M * MUC] CC (3) [WIP-E CC * CCUC] add M + CC (4) $TC (4)
Created by: ibenoit95