Finals Flashcards
(14 cards)
What is the formula for calculating raw materials in a balance sheet?
Raw Materials = Beginning Balance + Purchases - Ending Balance - Transfer out
Transfer out = Direct Materials + Indirect Material
What does MOH stand for in managerial accounting?
Manufacturing Overhead
MOH includes all product costs except direct material and direct labor.
What are Direct Materials (DM)?
Raw materials that become an integral part of the finished product and whose costs can be conveniently traced to the final product
Examples include aircraft engines on a Boeing 777 and the paper used for textbooks.
What is Direct Labor (DL)?
Labor cost that can be expediently traced to a product
Examples include wages of assembly line workers.
What is included in Manufacturing Overhead (MOH)?
All costs of manufacturing a product except for the costs already included in DM and DL, including:
* Indirect materials
* Indirect labor costs
* Maintenance and repairs on production equipment
* Heat and light
* Property taxes
* Depreciation and insurance on manufacturing facilities
Examples: factory overhead, direct labor overtime premium, lubricants for production equipment.
What is the definition of Relevant Range in cost behavior?
The range of activity within which fixed and variable costs behavior remains the same.
What happens to total fixed costs within the relevant range?
Total Fixed Costs remain the same.
How does the per unit cost of fixed costs change as the activity level increases?
Per Unit decreases as activity level increases.
What are Committed Fixed Costs?
Fixed costs that are long-term and cannot be easily changed
Examples include parking garage expenses, warehouse buildings, and long-term leases.
What are Discretionary Fixed Costs?
Fixed costs that can be adjusted in the short term
Examples include advertising costs, R&D costs, and management training.
What is the behavior of Variable Costs per unit?
Variable cost per unit remains constant.
What happens to total variable costs as activity level increases?
Total Variable Costs increase.
Fill in the blank: Direct labor is also known as _______.
touch labor.
True or False: Manufacturing Overhead includes costs that can be easily traced to the finished product.
False.
