product costing

Question 0

what are product costs

Answer 0

recorded as an asset in the inventory until the product is sold

Question 1

what is product costing

Answer 1

determining the costs of products in inventory or sold to customers

Question 2

what are period costs

Answer 2

costs that are recorded as expenses in the period in which they are incurred

e.g. sg&a expenses
interest expenses

Question 3

types of product costs

Answer 3

direct materials

direct labour

manufacturing overhead

Question 4

what is an overhead

Answer 4

includes all manufacturing costs except for materials and labour

like property taxes, insurance

Question 5

what are balance sheet inventories for cost accounting

Answer 5

raw materials

work in progress

finished goods

Question 6

predetermined overhead rate

Answer 6

estimated total manufacturing overhead cost for the coming period / estimated total units in the allocation base for the coming period

Question 7

overhead applied

Answer 7

POHR x actual activity

Question 8

if manufacturing overhead is under applied

Answer 8

applied OH is less than actual OH

Question 9

if manufacturing overhead is overapplied

Answer 9

applied OH is greater than actual Ohm

Question 10

under and overapplied overhead for smaller amounts (close to cost of goods sold) - where to allocate

Answer 10

COGS

Question 11

under and overapplied overhead allocation

Answer 11

work in progress, finished goods or cost of goods sold

Question 12

purchase of raw materials on account

Answer 12

purchase of materials is recorded in raw materials (debited)

Question 13

cost of raw materials is transferred to…

Answer 13

use of direct materials is recorded in work in process (debited) and raw materials (credited)

Question 14

direct costs for the month….

Answer 14

direct labor cost increase work in process (debited) and increase wages payable (credited, liability)

Question 15

actual manufacturing overhead costs incurred for the month….

Answer 15

actual overhead costs, as incurred, increase manufacturing overhead (debited) and increase accounts payable or accrued wages payable

Question 16

manufacturing overhead is applied to work in process using POGR and actual activity

Answer 16

manufacturing overhead is applied to WIP (debited) using POHR and actual activity rate

Question 17

if actual and applied manufacturing overhead are not equal at the end of fiscal period….

Answer 17

adjustment is required.

Question 18

when is the manufacturing overhead account cleared?

Answer 18

at the end of the year

Question 19

cost of goods sold transfered from work in process to finished goods

Answer 19

when the goods are completed, they are moved from work in process (balance sheet, credited) to finished goods inventory (balance sheet, debited)

Question 20

cost of goods sold is transfered from finished goods inventory to COGS in income statement

Answer 20

when the goods are sold, they are transfered from balance sheet (credited) to cogs in income statement (debited)

Question 21

absorption costing

Answer 21

all manufacturing costs are absorbed in the cost of the product

Question 22

variable costing

Answer 22

direct materials, direct labor, variable manufacturing overhead treated as product costs

fixed manufacturing overhead, variable and fixed selling and administrative expenses treated as period costs

Question 23

ABC method

Answer 23

allocates overhead costs to products