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Accounting Final
Chapter 10
| Question | Answer |
|---|---|
| What does a manufacturing business records its costs of products as? | cost of goods sold |
| cost of goods sold-sales= | gross profit |
| materials and finished products are recorded on the balance sheet as | inventories |
| inventories are... | current assets |
| If the benefit is used immediately then the cost is an... | expense |
| If the benefit is deferred then the cost is an... | asset |
| As an asset is used an expense such as.... is recognized | depreciation expense |
| What is the cost of a manufactured good? | 1. Direct materials 2. Direct Labor 3. Factory Overhead |
| How do you classify a direct material cost? | 1. An integral part of the finished product 2. A significant portion of the total cost of the product |
| How do you classify a direct labor cost? | 1. An integral part of the finished product 2. A significant portion of the total cost of the product |
| Costs other than direct materials cost and direct labor cost that are incurred in the manufactoring process are combined and classified as | factory overhead cost |
| Prime costs | direct materials and direct labor costs |
| conversion costs | direct labor and factory overhead |
| Product costs | direct materials, direct labor, factory overhead |
| period costs | selling (marketing the product) and administrative expenses (managing the company) |
| product costs are recorded as... | inventory (balance) costs of goods sold (income) |
| period costs are recorded as... | expenses |
| measure, record, and report product costs | cost accounting systems |
| 2 main types of cost accounting systems | 1. job order cost system 2. process cost system |
| provides product costs for each quantity of product that is manufactured | job order cost system |
| Each quantity of product that is manufactured is recorded as a... | job |
| provides product costs for each manufacturing department or process | process cost system |
| Predetermined factory overhead rate= | estimated total factory overhead costs/ estimate activity base |
| Factory overhead is increased for the... | actual overhead |
| Factory overhead is decreased for the... | applied overhead |
| If the applied overhead is less than the actual overhead incurred, it has | a positive balance or underapplied factory overhead |
| If the applied overhead is more than the actual overhead incurred, it has | a negative balance or overapplied factory overhead |
| The time spent in converting raw materials into a finished unit of product | value-added lead time |
| the time spent while the unit of product is waiting to enter the next production process or is moved from one process to another. | non-value added lead time |
| products are manufactured only as they are needed | pull manufacturing |
| products are manufactured on a schedule | push manufacturing |
| uses computers to electronically communicate orders, relay information, and make or receive payments from one organization to another | electronic data interchange |
| electronic tags placed on or embedded within products that can be read by radio waves that allow instant monitoring of product location | radio frequency indentification devices |
| used to plan and control internal and supply chain operations | enterprise resource planning |
| activity rate= | budgeted activity cost/activity-base usage |
| activity cost allocated to patient= | patient activity usage X activity rate |
| advertising expenses, sales salaries expenses, commissions expenses, office salaries expense, office supplies expense, depreciation expense (office building and equipment) | period costs |
Created by:
kec0010
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