Accounting Test 2
What is a good activity measure for for allocating Product level costs
# of parts, # of engineering hours
What is a good activity measure for for allocating Batch level costs
# of parts, or # of engineering hours
The formula for the cost per equivalent unit using the weighted average method is ______
(Cost of beginning work in process inventory - Cost added during the period) / Equivalent unites of production
Units in beginning WIP + units started or transferred in =
Units in ending WIP + units completed and transferred out
What are cost pools used for
choosing an appropriate activity measure for allocating overhead
The equivalent units of production computed under the weighted-average method takes into account the percentage completed of the beginning inventory.
False
True or false: Traditional cost systems tend to undercost standard products and overcost specialty products
False
Cost reconciliation report
Look this up later
How to Calculate Cost per equivalent unit
Look this up later
What are the manufacturing accounts for Job-order and process costing
Manufacturing Overhead, Raw Materials, Work in Process, and Finished goods
What drives Facility level costs
Must be carried out no matter the products that are produced
What are equivalent units in productin used for
Partially completed united that are still in WIP in order to find Unit product cost per department
The weighted-average method includes cost for ______
Prior and current periods
Measures of activity in the denominator (# of machine setups, or # of inspetions, ...) =
Activity Measures
Answer to formulas ("mini POHRs") =
Activity Rates
What are the three types of costing
Activity-Based, Job-Order, Process
What is Activity-Based costing
Attempts to assign overhead cost more accurately based by diving overhead into cost pools
How to calculate Units completed and transferred out
Beginning WIP + Added into WIP - Ending WIP
When computing the equivalent units of production under the weighted-average method, partially completed _______ inventory is ignored
Beginning work in process
How is unit product cost computed in Job-Order costing
(Total cost of a job / # of units in a job)
How is unit product cost computed in Process costing
(total department cost / units produced in department)
Equivalent units of production under the weighted-average method equal ______
Equivalent units in ending work in process plus units transferred out
Cost per equivalent unit are used to value _____
Both units in ending inventory and units transferred to the next department
What is process costing good for
Companies that continually manufacture many unites of a type of product
What is Job-Order costing good for
Companies that manufacture many different products each period
Equivalent units of production =
Completed and transferred out + Equivalent Unites in End WIP
What is a good activity measure for for allocating Unit level costs
Direct Labor Hours, or Machine Hours
How do you calculate Activity rate in activity-based costing
Dividing the total cost of each activity by it's total cost driver
What drives Product level costs
The nature or complexity of the product
What drives Batch level costs
The number of batches
What drives unit level costs
The number of units produced
What is a good activity measure for for allocating Facility level costs
They are arbitrarily allocated using some method like DLH or MH
What are the 4 cost pools
Unit, Batch, Product, and Facility
A product requires processing in two departments, A and B. Products start in Dept. A. Costs transferred out of Dept. A will be transferred to _____
Work in Process - Dept. B
