ACCT Man 1

Canoe Company's manufacturing accounting system uses direct labor hours to apply overhead to goods in process and finished goods inventories. Canoe Company's manufacturing costs for the year were: direct labor, $300,000; direct materials, $50,000; and factory overhead applied, $60,000. They incurred 30,000 direct labor hours and 10,000 indirect labor hours during the year. The overhead application rate was:

$2.00

For the current period, PencilCo started 15,000 units and completed 10,000 units, leaving 5,000 units in process 30 percent complete. How many equivalent units of production did PencilCo have for the period?

11,500

The Milling Department started the month with 35,000 units in its beginning work in process inventory. An additional 472,000 units were transferred in from the prior department during the month to begin processing in the Milling Department. There were 34,000 units in the ending work in process inventory of the Milling Department. How many units were transferred to the next processing department during the month?

473,000

For which situation(s) below would an organization be more likely to use a process costing system of rather than a job- order costing system? A. A plant that produces the "radials" in radial tires. B. A shop that restores old cars to showroom quality. C. A framing shop that takes custom orders. D. A design company that designs custom outdoor kitchens

A

Does not change with changes in the volume of activity within the relevant range.

A fixed cost

Which of the following items represents a difference between financial and managerial accounting? Users of Information, flexibility of practice, timeliness and time dimension of information reported, nature of information, or all of these

All of these

can be easily traced to an object (some materials or labor)

Direct costs

The three major cost components of a manufactured product are

Direct materials, direct labor, factory overhead

Costs that are incurred as part of the manufacturing process but are not clearly associated with specific units of product or batches of production, including all manufacturing costs other than direct material and direct labor costs, are called:

Factory overhead

benefit or revenue lost when choosing on alternative over another (relevant to short term decision analysis)

Opportunity costs

Period costs for a manufacturing company would flow directly to

The current income statement

DM+DL+MOH

Total Job Cost

Units in Beg WIP+Units Started-Units in WIP=

Units C&T/O

The overhead cost applied to a job during a period is recorded with a credit to Factory Overhead and a debit to:

Work in Process Inventory

--costs include labor and overhead

conversion

A job order cost accounting system would best fit the needs of a company that makes:

custom machinery

a difference between two costs (revenue)

differential cost (revenue)

the labor costs that can be directly traced to individual units or batches of products

direct labor

the cost of specific parts or materials that can be directly traced to a product (raw materials)

direct materials

are allocated to objects because they cannot be easily traced (plant depreciation, rent of equipment)

indirect costs

used for unique or custom ordered products

job order cost system

The cost of goods transferred to finished goods is equal to the sum of all of the completed jobs for that period

job order costing

all other costs of production which cannot be directly traced to individual units or batches of products; indirect labor, indirect materials, depreciation, insurance

manufacturing overhead costs

costs that have both a fixed and variable component

mixed cost

require future outlay of cash; possibly relevant to short term decision making

out of pocket costs

-- costs include the direct costs of production; material and labor

prime

used for mass produced items

process cost system

The cost of goods transferred to finished goods equals the number of completed units times the cost per equivalent unit

process costing

costs incurred to obtain customer orders and to deliver finished goods to customers

selling costs

already incurred and can not be avoided or changed (always irrelevant to short term decision analysis)

sunk costs

If overhead applied is less than actual overhead, it is:

underapplied

OH Rate * Actual Activity

MOHA

The following data have been recorded for recently completed Job 674 on its job cost sheet. Direct Materials cost was $2,039. A total of 32 DLHs and 175 MHs were worked on the job. The direct labor wage rate is $14 per labor hour. The company applied overhead on the basis of machine hours. The predetermined overhead rate is $15 per machine hour. The total cost of the job on its job cost sheet is

$5112

Dean Corp uses the weighted-average method in its process costing system. Department 1, the first process, started the month with 19,000 units in its beginning work in process inventory that were 30% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $44,890. An additional 89,000 units were started into production during the month and 84,000 units were completed in Department 1 and transferred to Department 2. There were 24,000 units in the ending work in process inventory of Department 1 that were 15% complete with respect to conversion costs. A total of $678,800 in conversion costs were incurred in the department during the month. What is the cost per equivalent unit for conversion costs for the month?

$8.261

Trapp Corporation uses the weighted-average method in its process costing system. The beginning work in process inventory in its Painting Department consisted of 3,500 units that were 70% complete with respect to materials and 60% complete with respect to conversion costs. The cost of the beginning work in process inventory in the department was recorded as $20,000. During the period, 11,500 units were completed and transferred on to the next department. The costs per equivalent unit for the period were $3.3 for material and $4.1 for conversion costs. The cost of units transferred out during the month was:

$85,100

non-manufacturing costs of staff to support and administrative functions-accounting, data processing, personnel, research and development; expensed in the period which they are used up

General and administrative expenses

costs that stay the same over a range of activity levels (depreciation, rent)

total fixed cost

costs that increase as production activity increases (direct materials, direct labor)

total variable cost