Final Study Flashcards
4 ways Job-order and process costing are different?
1) Different job vs. a single product
2) Costs accumulated by job vs. department
3) Job cost sheet vs. department production report
4) Unit costs computed by job rather than department
Compare normal and actual costing
Normal: Budgeted MOH costs and reconciliation
Actual: Actual MOH costs
What is under-/over-applied overhead and what should be done in each situation?
Under: Applied MOH < actual, Decrease COGS
Over: Applied MOH > actual, Increase COGS
What comes out of the Employee time ticket and where do they go?
1) DL -> Job cost sheets
2) InD -> MOH account
Where is MOH applied?
WIP account (in job cost sheet) with an adjustment if necessary
What are conversion costs?
DL + MOH
Weighted average vs. FIFO? 3 points each
WA: 1) combines WIP with current period 2) simple 3) Not useful for cost when beginning inventories high FIFO: 1) Separates WIP from Current 2) Detailed 3) Useful for cost control when inventory levels substantial
What are equivalent units of production?
Units completed/tranferred + Equivalent units remaining in WIP
What are transferred in costs?
Costs accumulated from earlier processes and transferred-in
What is an activity cost pool?
A cost bucket where activity related costs are accumulated
What are the 4 activity levels, and an example of each activity measure
Unit: Machine-hours
Batch: Number of setups
Product: Hours of design
Facility: Direct Labour Hours
2 Benefits of ABC and 1 limitation
Ben: More accurate, more effective management
Lim: Cost of implementation might exceed benefits
What are the 4 categories of Quality costs and an example of each?
Prevention: Training
Appraisal: Inspection
Internal Failure: Rework
External: Warranty
What is the central concept of a flexible budget?
With actual activity, it shows what costs and revenue should have been
How do you find the standard cost for DL/DM/MOH cost per unit?
Standard Quantity (hours) per unit x Standard rate (price) = Standard cost per unit
What is a static budget?
A budget for a single planned activity level
What 2 factors go into price variance? What is the formula?
1) AQ x AP
2) AQ x SP
PV = AQ(AP-SP)
What 2 factors go into quantity variance? What is the formula?
1) AQ x SP
2) SQ x SP
QV = SP(AQ-SQ)
Who is responsible for price variance?
Purchasing department for that materials
Who is responsible for quantity variance?
Production department
What 2 factors go into labour rate variance? What is the formula?
1) AH x AR
2) AH x SR
LRV = AH(AR-SR)
What 2 factors go into Labour efficiency variance? What is the formula?
1) AH x SR
2) SH x SR
LEV = SR(AH-SH)
What is the variable overhead spending variance formula?
VOSV = AH(AR-SR)
What is the variable overhead efficiency variance?
VOEV = SR(AH-SH)
