Mng Ch1

Question 1

3 types of manufacturing costs

Answer 1

Direct materials
Direct labor
Manufacturing overhead

Question 2

How to calculate raw materials used

Answer 2

Raw materials inventory beg. 
\+Raw materials purchase
———————————-
Raw materials available for use
- raw materials inventory end
———————————————
Raw materials used

Question 3

How to calculate total cost wip

Answer 3

Beg wip
+ total current manufacturing cost
————————————————
Total cost of wip

Question 4

How to calculate cost of goods manufactured

Answer 4

Total wip
-ending wip
——————
Cost of goods manufactured

Question 5

What goes into the different subgroups

Answer 5

Direct labor- must be traced in an economically feasible way to the assembly of products
Direct materials- wood metal… can be observed directly in made item
Manufacturing overhead- indirect materials and labor, factory electricity, janitors, factory taxes, factory insurance… anything related to the factory but not directly related to the product

Question 6

Cost of goods available for sail

Answer 6

Finished goods inventory beg.
+ cost of goods manufactured
——————————————-
Cost of goods available for sale

Question 7

Cost of goods sold

Answer 7

Cost of goods available for sale
- finished goods inventory end
—————————————
Cogs

Question 8

Gross profit

Answer 8

Revenue

-cogs

Question 9

Cost accounting

Answer 9

Measuring reporting and recording of product costs.

Question 10

2 types of cost accounting systems

Answer 10

Job order (company assigns cost to each job or batch of goods)
Process cost (used when a company manufacturers a large volume of similar products)

Question 11

4 major steps to job order cost flow

Answer 11

Manufacturing costs
WIP
FGI
Cogs

Question 12

Job cost sheet

Answer 12

Form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job

Question 13

Predetermined overhead rate

Answer 13

Estimated annual overhead/estimated annual operating activity

Question 14

What are the source documents for direct materials, direct labor, manufacturing overhead?

Answer 14

Materials requisition
Time ticket
Calculation of pdoh

Question 15

Journal entry for goods costing 15 and we’re sold for 20

Answer 15

Cogs. 15
FGI. 15
AR. 20
Sales Rev 20

Question 16

Journal entry for paying manufacturing overhead

Answer 16

Manufacturing overhead xx

Cash. Xx

Question 17

Process cost system

Answer 17

A cost accounting system where costs are tracked through a series of connected manufacturing processes or departments, rather than by individual jobs as in job order cost systems

Question 18

Similarities through job order cost and process cost system

Answer 18

Track manufacturing cost
Accumulate costs in the same accounts
Assign accumulated accounts to the same accounts

Question 19

Main difference between job order cost and process cost systems

Answer 19

In job order only 1 wip account is used
In job order cost system costs are changed to individual jobs and summarized in a job cost sheet
Costs are totaled at end of job in JC but end of period in PC

Question 20

How to calculate equivalent units

Answer 20

Units completed and transferred out+equivalent units in ending wip= equivalent units of production

Question 21

Prime cost

Answer 21

DM+DL

Question 22

Conversion cost

Answer 22

DL+OH

Question 23

Conversion costs for each month

Answer 23

Units transferred out + (units * conversion cost %)

Question 24

How to determine total units to be accounted for

Answer 24

WIP beginning + started into production

Question 25

How to determine total units accounted for

Answer 25

Units completed and transferred out + ending wip

Question 26

Compute unit materials cost

Answer 26

Total materials cost / equivalent units of materials

Question 27

Unit conversion cost

Answer 27

Total conversion cost/ equivalent units of conversion costs

Question 28

Total manufacturing cost per unit

Answer 28

Unit materials cost/unit conversion cost

Question 29

Difference between product and period costs

Answer 29

Product are only incurred if product is acquired or produced.
Period are associated with passage of time

Question 30

Assign overhead to production using a predetermined rate

Answer 30

Take rate given and multiply by the amount of direct labor casts

WIP. Xx
MO. Xx