m acc test 1

Question 1

managers three main responsibility’s

Answer 1

planning, decision-making, and controlling

Question 2

planning

Answer 2

establishing goals and specifying how to achieve them

Question 3

decision-making

Answer 3

gathering feedback to ensure plans are properly executed or modified

Question 4

controlling

Answer 4

selecting a course of action from competing alternatives

Question 5

the differences between managerial accounting and financial accounting

Answer 5

mgl accounting uses internal users (employees, managers), management sets rules, financial accounting uses external users (auditors, creditors, investors), uses strict GAAP rules

Question 6

the 4 standards of the IMA Statement of Ethical Professional Practice

Answer 6

credibility, confidentiality, competence, integrity

Question 7

credibility

Answer 7

reliability

Question 8

confidentiality

Answer 8

mouth shut on non public info

Question 9

competence

Answer 9

academic knowledge

Question 10

integrity

Answer 10

morality, avoiding conflict of interest

Question 11

What is a cost object?

Answer 11

anything for which cost data are desired-including products, customers, plants, office locations, and departments, classified as direct or indirect

Question 12

direct cost

Answer 12

easily traced to a specified cost object, salary of sales manager

Question 13

indirect cost

Answer 13

cannot be easily traced to a specified cost object, common cost

Question 14

What are the three manufacturing (product) costs

Answer 14

two direct costs (direct materials and direct labor) and one indirect cost (manufacturing overhead)

Question 15

Non-manufacturing (period) costs?

Answer 15

two categories, selling costs and administrative costs

Question 16

What are conversion costs

Answer 16

the sum of direct labor and manufacturing overhead, the two costs incurred to convert direct materials into a finished product

Question 17

What are Prime costs

Answer 17

sum of direct materials cost and direct labor costs

Question 18

Cost classifications for predicting cost behavior

Answer 18

variable, fixed, and mixed

Question 19

Variable costs

Answer 19

varies in total in direct proportion to changes in the level of activity, cost of goods sold for a merchandising company, direct materials, direct labor, variable elements of manufacturing overhead such as indirect materials, supplies, and power, and variable elements of selling and administrative expenses such as commissions and shipping

Question 20

Fixed costs

Answer 20

remains constant in total regardless of changes in the level of activity, manufacturing overhead includes fixed costs like depreciation, insurance, property taxes, rent, and supervisory salaries, selling and administrative costs include administrative salaries, advertising, and depreciation of nonmanufacturing assets

Question 21

Mixed Costs

Answer 21

both variable and fixed costs elements, semivariable costs

Question 22

absorption costs

Answer 22

all manufacturing costs, both fixed and variable are assigned to units of product-units are said to be fully absorb manufacturing costs, conversely all nonmanufacturing costs are treated as period costs and not assigned to products

Question 23

What is job-order costing

Answer 23

used by companies that make different products, each with unique features, costs are traced and allocated to jobs and then the costs of the jobs are divided by the number of units in the job to arrive at an average cost per unit, also called the unit product cost

Question 24

the various documents used during the manufacture of a product

Answer 24

bill of materials, job cost sheet, time tickets

Question 25

bill of materials

Answer 25

a document that lists the quantity of each type of direct materials needed to complete a unit of product

Question 26

job cost sheet

Answer 26

records the materials, labor, and manufacturing overhead costs charged to that job

Question 27

time ticket

Answer 27

provides an hour by hour summary of the employees activities throughout the day, direct labor charges are automatically posted to job cost sheets, any indirect labor time is treated as part of manufacturing overhead and is not posted

Question 28

allocation base

Answer 28

a measure, such as direct labor hours that is common to all products and used to assign overhead costs to them, direct labor hours, direct labor costs, machine hours, units of product

Question 29

predetermined overhead rate

Answer 29

computed by dividing the total estimated manufacturing overhead cost for the period by the estimated total amount of the allocation base, computed before the period using a four step process

Question 30

How are overhead costs assigned to jobs in production

Answer 30

the process of assigning overhead costs to jobs, formula for determining amount of overhead costs to apply yo a particular job: overhead= predetermined overhead rate * amount of the allocation base incurred by the job, apply throughout accounting period

Question 31

Identify and apply the four steps to applying overhead using one plantwide overhead rate

Answer 31

Find estimated OH costs, Identify the allocation base, and the estimated amount of the allocation base, Calculate the predetermined OH rate., Apply overhead by multiplying the rate by actual amount of the allocation base

Question 32

identify and apply the four steps to applying overhead using the departmental approach

Answer 32

Find estimated OH costs for each department, identify the allocation base, and the estimated amount of the allocation base for each department, Calculate the predetermined OH rate for each department, Apply overhead by multiplying the rate by actual amount of the allocation base for each department.

Question 33

Which steps for applying overhead are performed at the beginning of the year, and which are performed throughout the year

Question 34

How do you calculate the total cost/manufacturing cost of a job

Answer 34

direct materials + direct labor + manufacturing overhead

Question 35

Identify the three inventory accounts for a manufacturer, and the flow of costs through the inventory accounts

Answer 35

raw materials, work in process, and finished goods

Question 36

raw materials

Answer 36

any materials that go into the final product, when used in production as direct materials, their costs are transferred to work in process inventory

Question 37

work in process

Answer 37

consists of units of product that are only partially complete and will require further work before sale, to transform direct materials into completed jobs, direct labor is added to WIP and manufacturing overhead cost is applied to WIP by multiplying the predetermined overhead rate by the actual quantity of the allocation base consumed by each job, when jobs are completed their costs are transferred from WIP to finished goods

Question 38

finished goods

Answer 38

completed units of product that havent been sold

Question 39

costs of goods manufactured

Answer 39

the amount transferred from WIP to FG includes the manufacturing costs associated with units of product finished during the period, beginning WIP + total mfg costs production (DM AND DL AND TOTAL GIVEN)p- ending WIP

Question 40

balance sheet

Answer 40

raw materials (raw materials inventory), manufacturing overhead (direct labor, WIP, FG)

Question 41

income statement

Answer 41

selling and administrative (costs of goods sold, selling and administrative expenses)

Question 42

purchase of materials

Answer 42

debit raw materials, credit accounts payable

Question 43

issuance of raw materials

Answer 43

debit WIP, debit MO, credit RM

Question 44

direct and indirect labor costs

Answer 44

debit WIP, debit MO, credit salaries and wages payable

Question 45

record MO applied to job

Answer 45

debit WIP, credit MO

Question 46

administrative salaries

Answer 46

debit salaries expense, credit salaries and wages payable

Question 47

completed job

Answer 47

DM + DL + MO: debit FG, credit WIP

Question 48

rent and utlities

Answer 48

debit MO, credit accounts payable

Question 49

goods sold on account

Answer 49

debit COGS and credit finished goods, debit AR and credit sales

Question 50

depreciation

Answer 50

debit MO, credit accumulated dep

Question 51

other MO costs accrued

Answer 51

debit MO, credit AP

Question 52

costs of goods sold

Answer 52

debit COGS, credit FG

Question 53

sales on account

Answer 53

debit AR, credit sales; x * % = y; x + y = number used

Question 54

schedule of costs of goods manufactured

Answer 54

contains 3 elements of product costs- direct materials, direct labor, and MO- and it summarizes the portions of those costs remaining in ending WIP inventory and transferred out to FG,

Question 55

schedule of costs of goods sold

Answer 55

contains 3 product costs, direct materials, direct labor, and MO- and summarizes the portions of those costs remaining in ending FG inventory and transferred out to COGS

Question 56

costs of DM on schedule of costs of goods manufactured

Answer 56

cost of indirect materials is subtracted from raw materials used in production

Question 57

costs of goods available for sale

Answer 57

beginning FG + costs of goods manufactured

Question 58

unadjusted COGS

Answer 58

costs of goods available for sale = ending FG

Question 59

adjusted COGS

Answer 59

unadjusted COGS + underapplied overhead (or - overapplied)

Question 60

cost of direct materials used in production

Answer 60

beginning RM + purchases of RM - ending RM - indirect materials

Question 61

over or under applied formula

Answer 61

predetermined overhead rate * actual total allocation base = total manufacturing overhead; actual total MO cost - total MO applied = under/over applied

Question 62

underapplied overhead

Answer 62

debit COGS, credit MO; estimated < actual

Question 63

overapplied overhead

Answer 63

debit MO, credit COGS; estimated > actual