Yes | | D | No | No | | (Points : 5) | Choice A. Choice B. Choice C. Choice D. | 2. (TCO F) Process costing would be appropriate for each of the following except: (Points : 5) | custom furniture manufacturing. oil refining. grain milling. newsprint production. | 3. (TCO F) Assume there was no beginning work in process inventory and the ending work in process inventory is 70% complete with respect to conversion costs. Under
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unit of product? (FALSE) variable would be true 5.) In a manufacturing firm all costs are product costs? (FALSE) 6.) Wages paid to production supervisors would be considered direct labor? (FALSE) 7.) Advertising is a product cost as long as it promotes specific products? (FALSE) 8.) Managerial accounting places less emphasis on non monetary data than financial accounting? (FALSE) 9.) Direct material cost combines with manufacturing overhead cost is known as conversion cost? (FALSE) direct labor 10
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Martin Email Instructor __________________________ ACTIVITY BASED COSTING SYSTEM Two stage process Activity pools Activity categories With & Without ABC example What is Activity based costing (ABC)? Activity based costing (ABC) assigns manufacturing overhead costs to products in a more logical manner than the traditional approach of simply allocating costs on the basis of machine hours. Activity based costing recognizes that the special engineering‚ special testing‚ machine setups‚ and others
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Fouch Company makes 30‚000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials 15.70 Direct labor 17.50 Variable manufacturing overhead 4.50 Fixed manufacturing overhead 14.60 Unit product cost 52.30 An outside supplier has offered to sell the company all of these parts it needs for $51.90 a unit. If the company accepts this offer‚ the facilities now being used to make the part could be used to make
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variances. Recognize the features of a standard cost system. Account for standard costs in a departmentalized factory. Distinguish between actual and applied factory overhead. Standard Costing •The purpose of standard cost accounting is to control costs and promote efficiency. •It is not another accounting method for accumulating manufacturing costs‚ but is used in conjunction with such methods as job order‚ process‚ or backflush costing. •Standard costing is based on predetermination of what it should
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connected manufacturing processes or departments; Used for large volume production of uniform products. Example: Chemicals Oil refining Textiles Paints Paper Flour Rubber Steel Food processing Supply to Customer http://www.bajajhindustan.com/sugarp rocess.html Illustration 3-2 FLOW OF COST IN PROCESS COSTING SYSTEM Process Costing Materials Inventory Work in Process‚ Mixing Dept Manufacturing Wages Work in Process‚ Molding Dept Finished Goods Manufacturing Overhead Work
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with the actual materials costs‚ the actual direct labor costs‚ and manufacturing overhead based on a predetermined manufacturing overhead rate. These three costs are referred to as product costs and are used for the cost of goods sold and for inventory valuation. Standard costing values its manufactured products with a predetermined materials cost‚ a predetermined direct labor cost‚ and a predetermined manufacturing overhead cost. These standard costs will be used for valuing the manufacturer’s
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30% Cost of Goods Available for Sale $1‚020‚000 Prime Costs $545‚000 Manufacturer Overhead 65% of Conversion cost Direct Materials $325‚000 Beginning Inventory numbers: Raw Materials $41‚000 Works in Process $56‚000 Finished Goods $35‚000 Formulas: Prime cost = Direct Materials cost + Direct Labor cost Conversion cost = Direct Labor cost + Manufacturing overhead cost (65% conversion) Prime cost = 325‚000 + $220‚000 545‚000 ( Data given) Trying
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the incident of the special monitors that supplies by outsiders‚ all of its other feathers‚ built-in software‚ communication‚ high tech design and PC compatibility‚ seems attractive for consumers. The forecasting sales volume is 5000 units and manufacturing 1000 units in Montreal and left 4000 units on Toronto. However‚ since the requirement number and prices of EWU (Equivalent Work Units) are different in these two factories‚ this would lead different results of net incomes. The original distribution
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Q1: There are two different types of cost accounting systems: Job order cost systems and process cost systems. How does management decide whether to use a job order cost system or a process cost system in any given manufacturing situation? Explain. Job order cost system is used in situations where many different products are produced each period. For example‚ a Levi Strauss clothing factory would typically make many different types of jeans for both men and women during a month. A particular order
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