Exam 1: Ch. 14-17

Question 1

Managerial accounting

Answer 1

Financial and non financial info to managers.
Planning and control

Question 2

Direct vs indirect, product vs period

Answer 2

Product- direct (DM and DL) and indirect (FO)
Period- selling and G/A (IS only)

Question 3

Raw materials T account

Answer 3

Beg
Purchases
—-Direct Mat Used
Ending

Question 4

WIP T-accts

Answer 4

Beg
DM
DL
FO
—-COGM
Ending

Question 5

FG T-acct

Answer 5

Beg
COGM
—-COGS
End

Question 6

FO T-acct

Answer 6

Beg
IM
IL
Other FO costs
—-OH applied
End

Question 7

IS

Answer 7

Sales
-COGS
=Gross Profit
- selling & G/A
=Net income/loss

Question 8

Closing underapplied OH

Answer 8

Actual>Applied, debit
Deb COGS
Cred FO

Question 9

Closing overapplied OH

Answer 9

Actual<Applied, Credit
Deb FO
Cred COGS

Question 10

Buy RM journal

Answer 10

Deb RM Inventory
Cred Acc Payable

Question 11

Record DM used journal

Answer 11

Deb WIP Inventory
Cred RM Inventory

Question 12

Record DL used journal

Answer 12

Deb WIP Inventory
Cred Factory Wages Payable

Question 13

Record IM used journal

Answer 13

Deb Factory Overhead
Cred RM inventory

Question 14

Record IL used journal

Answer 14

Deb Factory Overhead
Cred Factory Wages Payable

Question 15

Apply overhead using predetermined rate journal

Answer 15

Deb WIP Inventory
Cred Factory Overhead

Question 16

Record actual overhead costs journal

Answer 16

Deb Factory Overhead
Cred Acc Dep
Cred Rent Payable
Cred Prepaid insurance

Question 17

Record completion of jobs journal

Answer 17

Deb Finished Goods Inventory
Cred WIP Inventory

Question 18

Record COGS for sold jobs journal

Answer 18

Deb COGS
Cred FG Inventory

Question 19

Record sales for sold jobs journal

Answer 19

Deb Acc Receivable
Cred Sales

Question 20

Process costing steps

Answer 20

1. Determine physical flow
2. Compute EUP
3. Compute cost per EUP
4. Assign and reconcile costs

Question 21

Departmental OH rate method

Answer 21

1. Assign OH costs to departmental cost pools
2. Select an allocation base for each department
3. Compute OH allocation rates for each department
4. Use dept. OH rates to assign OH costs to cost objects (products)

Question 22

Building blocks of analysis

Answer 22

Liquidity & efficiency, solvency, profitability, market prospects

Question 23

Tools of analysis

Answer 23

Horizontal- across time
Vertical (common-size)- compare to base amount
Ratio- key relations

Question 24

Prime vs conversion

Answer 24

Prime cost- direct material and labor
Conversion cost- direct labor and factory overhead

Question 25

Product vs period

Answer 25

Product- DM, DL, FO
Period- selling and G/A

Question 26

Cost flows in manufacturing

Answer 26

Balance sheet- RM inventory ending, WIP inventory ending, GD inventory ending
Income statement- COGS

Question 27

Overhead process

Answer 27

1. Set predetermined OH rate
2. Apply estimated OH
3. Record actual OH
4. Close overhead