accounting for planning and control

Which of the following would be the best cost driver for the assembling cost pool?

# of parts

calculation for direct materials

1. beginning raw materials inventory 2. plus, purchases of direct materials 3. plus materials available for use 4. less, ending raw materials inventory 5. direct materials used

Who are the ERP

Enterprise Resource Planning. Integrated systems for data analysis. ex. SAP and Oracle

be able to calculate gross profit

Gross Profit = Gross Sales - Cost of goods sold

Which of the following provides an example of a conformance cost?

Inspection cos

who are they IMA

Institute of management accountants. they put together the exam for the CMA certification.

product-level cost?

Research & development Design time Parts administration

manufacturing overhead includes

all manufacturing costs except direct labor and direct materials

3-25A 630k/90k= 7$ per machine hour. then $7 times 56,500= 395,500k overhead applied. what happened? over or under allocated

calculate the actual overhead by recognizing what goes in overhead and what does not. then recognize wither it was under or over allocated. under allocated. 508k. 508-395.5k= 395500.

Costs of goods manufactured

calculated as beginning work process inventory + manufacturing costs incurred - ending work in process inventory. represents the cost of those goods that were completed and moved to finished goods inventory during the period

to allocate for example DL $ then take

estimated overhead (1,400,000) divided by estimated DL $(1,000,000). whatever that equals is per DL $ (1.40)

A limitation of activity-based costing (ABC) is

excessive cost and time required to implement and maintain activity-based costing (ABC

Quality at the source

is the term that refers to shifting the responsibility for quality adherence to the operators at each step in the value stream, rather than relying on supervisors or quality control experts to discover errors

Conversion Costs

manufacturing overhead + direct labor

Activity cost allocation rate x Cost driver (actual use) =

manufacturing overhead allocated

training personal is an example of

of a prevention cost

conformance costs

prevention and appraisal costs

treasurer is

primarily responsible for raising capital (through issuing stocks and bonds) and investing funds.

appraisal costs is an example of

product testing

design is a

product-level cost

batch-level cost would be a

setup cost

conversion costs

the combination of direct labor and manufacturing overhead costs

The cost driver of the costs in the particular activity pool is

the cost allocation base

Work in progress

units of product that are only partially complete and will require further work before they are ready for sale to the customer

variable costs

wages (not salaries), and direct material. some overhead will be variables or fixed. dependent on units sold

characteristic of 5S Workplace Organizations?

-Managers ensure all equipment and tools are thoroughly cleaned. -Managers eliminate infrequently used tools and supplies out of the workplace. -Managers use visual management tools, such as color-coding, to create logical orders of tools, supplies, and equipment.

cogs sheet for manufacturing

1. beginning work in process inventory plus. 2 manufacturing costs incurred 3. direct materials used 3. direct labor 4. manufacturing overhead -5. total manufacturing costs to account for less. 6. ending work in process inventory -7.cost of goods manufactured

Which of the following statements best describes the relationship among activity-based costing and cost distortion among products?

Activity-based costing typically causes the least cost distortion between products because of the way indirect costs are allocated to the product.

Main Controllers

Chief Accountant, treasurer (handles cash and investments), controller (record keeper of money, accounting)

managerial acountants

DO NOT prepare the financial statements for an organization.

conversion costs

Direct Labor + Manufacturing Overhead

Prime Costs

Direct Materials + Direct Labor

Direct Costs

Direct labor costs, precise and traceable. (product costs). research and development is not a product cost.

controlling is

Evaluating the results of business operations against the plan and making adjustments to keep the company pressing toward its goals is a feature of controlling

What are the three types of companies?

Merchandise, Manufacturer, and Service

Three responsibilities of management

Planning (setting goals), controlling (bigger picture), Directing (day to day)

a batch-level cost.

Setting up a machine to change from producing one product to another is an example of

Sustainability in business (three pillars)

Social, Environmental, and Economic. (triple bottom line is: profit, people, planet)

Which of the following statements is TRUE regarding total quality management (TQM) programs?

TQM programs emphasize nonfinancial measures.

Who is usually responsible for general financial accounting, managerial accounting, and tax reporting?

The controller is usually responsible for general financial accounting, managerial accounting, and tax reporting.

Which of the following situations indicate that a manager should consider using activity-based costing (ABC)?

The cost system is outdated

process costing

a cost system that assigns costs to each process, or work center, in the production cycle, and then calculates the average cost for all units produced (mass production)

job costing

a costing system that accumulates, tracks, and assigns costs for each job produced by a company (services like janitors)

an administration expense is known as

a period cost

Decision-making is integrated throughout

all managerial accounting responsibilities. Managerial accountants plan, direct, and control (identifying alternative courses of action and choosing amongst them).

Other Indirect Manufacturing Costs

all manufacturing overhead costs aside from indirect materials and indirect labor. so utilities, plant insurance, and depreciation expenses are examples

The CFO is responsible for

all of the company's financial concerns

differential cost

an example of a relevant cost to a decision

an overhead expense is

and indirect expense to the labor. (indirect costs) ex. administration, electricity, cleaning, property taxes

cost objects

anything for which you want to know the costs. unit, product line, plant. factory is. includes all of the following BUT does not include direct materials

To which category of a quality-related cost report would inspecting parts belong?

appraisals cost

Product Costs

are incurred by manufacturers. Direct Materials,Direct Labor, and manufacturing overhead. first goes into inventory

An enterprise resource planning (ERP) system

assists companies in streamlining their operations, responding quickly to changes, and replacing hundreds of separate software systems

to determine actual money allocated for DL hours

at the year end, you see how many DL hours actually occurred. (51700) multiply that by what the number was per DL hours. (28) what ever that equals is total overhead allocated or applied. (1,447,600.0)

variable costs

change in total in direct proportion to change in volume

operating income

company's earnings before interest and income taxes

Providing decision support that is accurate, clear, concise, and timely is in accordance with which standard of ethical professional practice?

competence

competence

continually growing in expertise, and working well in specialized field. working up to the standards

sunk costs

costs that have already been incurred and cannot be recovered. ie depreciation expense

Indirect costs:

costs that need to be allocated. (period costs) ex. cleaning and administration

fixed costs

costs that remain the same regardless of units sold

estimated overhead is

credit in the overhead account

how do you decrease inventory

credit it

if you under allocate estimated overhead

credit overhead, and debit COGS

actual overhead is

debited to the overhead account

prime costs

direct labor and direct materials

credibility

disclosing all information thats relevant, and in an inappropriate manner

A relevant facility-level cost driver for heating costs is

floor space

Activity-based costing (ABC)

focuses on activities performed to produce a product

Decision-making is defined as

identifying alternative courses of action and choosing amongst them

Managerial Accounting

is a tool for INTERNAL players

warranty cost

is an external failure cost

insurance expense

is an uncontrollable expense.

which of the following is a benefit of employee empowerment?

lean companies focus on reducing employee empowerment to reduce waste

Activity based-costing (ABC) causes

least cost distortion because managers allocate indirect costs to the products based on activity type and product usage. Cost distortion is solely a result of the way a manager allocates indirect costs such as manufacturing overhead

allocation of overhead in three ways

machine hours direct labor hours direct labor dollars

period costs

not related to the manufacturing to the product. like marketing and research and development. will always be expensed in the period in which they are incurred and never become a part of inventory. (selling, marketing, and administrative)

Managerial accountants' three primary responsibilities include:

planning, directing, controlling

costs of goods manufactured

represents the cost of those goods that were completed and moved to Finished Goods Inventory during the period.

internal failure is an example of

rework costs

job order

services provided, people working a service,

Which is NOT an example of a product-level cost

set up time

Planning involves

setting goals and objectives for the company and determining how to achieve them.

Quality at the source refers to

shifting the responsibility for quality adherence to the operators at each step in the value stream, instead of relying on supervisors or quality control experts to discover errors.

integrity

telling the truth in business. not being shady

Confidentiality

the act of holding information in confidence, not to be released to unauthorized individuals

process

things used for jobs, ex oil refinery

assembly and inspecting is a

unit-level cost

A reduction of manufacturing delivery speed is a

value-added activity

if you over allocate overhead you

you (reduce overhead) by crediting to COGS to close out

Sox act of 2002

you cannot be auditing the people you counsel