Module 2 accounting
Facility-sustaining cost
A cost incurred to maintain the company's capacity to operate
Batch-related costs
A cost that varies with the number of batches regardless of how many units are in each batch
Cells
A group of machines arranged to reduce travel time of product between machines
life-cycle pricing
A pricing strategy where the company attempts to set a selling price that will cover the costs of the product over its life
Target pricing
A pricing strategy where the company first determines the selling price of the product and then decides whether to enter the market
Machine set up
Adjustments made to machines in preparation for new production run
FOB shipping point indicated that goods in transit being to the: Seller Buyer Common carrier either the buyer or seller depending upon the terms of the bill of lading
Buyer
Direct labor
Cost of salaries for workers who actually manufacture the product
Purchase discounts
Discount given buyer for paying amount due early
Sales allowances
Discounts given to unhappy customers by seller (seller books)
Purchase returns
Goods return by buyer on buyers books
FOB destination
Legal title transfers to customer when goods are received
Manufacturing overhead
Manufacturing cost not directly associated with the production of a product
The document listing the quantities of materials and parts needed by the production department is referred to as a: Operations lists Bill of lading Production order Materials requisition
Materials requisition
Goods shipped from seller's warehouse on Nov. 10, 2010, arrived at the buyer's warehouse on Nov 16, 2010. The invoice for the goods arrived at the buyer's accounting department on Nov 13, 2010 and was paid on Nov 20, 2010. IF the goods were sold FOB shipping point, the buyer took legal title on: Nov 20, 2010 Nov 13, 2010 Nov 10, 2010 Nov 16, 2010
Nov 10, 2010
Sri-State corporation ordered materials from down-state manufacturing on October 1, 2006. Down-state shipped the materials by rail on October 5 and the railroad notified Tri-state on October 12, that the goods had arrived. Tri-state picked up the materials on October 13. The terms of the sale are FOB shipping point. On what date should Try-state consider this a purchase? October 1 October 5 October 12 October 13
October 5
Purchase allowances
Reduction in price of goods purchased as a result of dissatisfaction by customer (buyers books)
Selling margin
Selling price less cost
Bill of Lading
Shipping document that describes agreement between business and common carrier
Goods shipped from a seller's warehouse on April 10 using the terms FOB shipping point. On the way to the buyer's warehouse the truck hauling the good wrecked and the goods were destroyed. Who will get the insurance check covering the loss? The seller The Buyer The seller and buyer split the loss The delivery company
The buyer
Direct labor
The cost of employees who manufacture products
Indirect material
The cost of production materials that either cannot be traces to the product or whose cast is not enough to warrant tracing
Predatory pricing
The practice of selling products below cost in an attempt to drive out competition, control the market, and then raise prices
Price gouging
The practice of setting excessively high prices
Cost-volume-profit analysis
The study of how cost and profits change in response to changes in the volume of goods and services provided to customers
Price Fixing
When a group of companies agree to limit supply and charge identical prices
A document sent by the purchasing department to order a specific quantity of goods or services called a: Vendor invoice Purchasing report purchasing order purchase requisition
purchase order
The purchase order originates with the: Vendor Receiving department purchasing department manufacturing department needing the goods or services
purchasing department
A sales invoice originates with the: Vendor Purchasing department Sales department Accounting department
sales department
dumping
selling products below cost in a foreign market
Which of the following is part of the revenue process? 1. Provide customer support 2. Pay supplier for inventory 3. Convert raw material into inventory for sale 4. Order inventory for resale
1. Provide customer support
Determining the company's needs for goods and services is associated with which of the following processes? 1. Revenue process 2. Expenditure process 3. Conversion process 4. Evaluation process
1. Revenue Process
Delivery of goods is associated with which of the following process? 1. Revenue process 2. Expenditure process 3. Conversion process 4. Evaluation process
1. Revenue process
Determining the credit and payment policies for customers is part of the: 1. revenue process 2. Collection process 3. Expenditure process 4. Conversion process
1. Revenue process
Which of the following is part of the conversion process 1. Storing finished manufacturing goods until they are sold 2. Accepting orders for manufactured good s 3. Paying salaries for the sales personnel who sell the product 4. Pay the freight to deliver the product to the customer
1. Storing finished manufacturing goods until they are sold
Which of the following is not part of the conversion process? 1. Machine set up 2. Paying for the raw materials used in productions 3. Storing the raw material used in productions 4. Storing finished manufactured goods until sold
2. Paying for the raw materials used in productions
Which of the following is not a part of the revenue process? 1. Receive and accept order for goods and services 2. Receive goods and services 3. Receive payments for goods and services rendered 4. Provide customer support
2. Receive goods and services
Manufacturing products is associated with which of the following processes? 1. Revenue process 2. Expenditure process 3. Conversion process 4. Evaluation process
3. conversion process
Which of the following is not part of the expenditure process? 1. Receiving goods and services 2. Paying suppliers 3. Ordering goods ans services 4. Using equipment to manufacture products
4. Using equipment to manufacture products
Product-sustaining cost
A cost that varies with the number of product lines
Unit related cost
A cost that varies with the number of products produced
Skimming pricing
A pricing strategy in which the company sets its initial selling price is high in an attempt to appeal to those individuals who want to be the first to have the product and who are not concerned about the price
Penetrating pricing
A pricing strategy where a company sets its initial selling price low in an attempt to fain a share of the markets from competitors
Manufacturing overhead
All cost other than direct materials and direct labor that are incurred to manufacture products
Markup
An additional amount over cost that is added to determine selling price
Direct materials
Crude oil purchased to produce gasoline
Goods shipped from a seller's warehouse on June 10, 2010, arrived at the buyers warehouse on June 16, 2010. The invoice for the goods arrived at the buyer's accounting department on June 13, 2010 and was paid on June 20, 2010. If the goods were sold FOB destination, the buyer took legal title on: June 20, 2008 June 13, 2008 June 10, 2008 June 16, 2008
June 16, 2008
FOB shipping point
Legal title transfer when goods leave the seller's place of business
Incremental cost
The additional cost associated with an alternative
