Exam 1 (Chapter 18-19)
Requirement 2. Classify Lawlor's costs as period costs or product costs. If the costs are product costs, further classify as direct materials, direct labor, or manufacturing overhead. 1. Shaft and handle of weed trimmer 2. Motor of weed trimmer 3. Factory labor for workers assembling weed trimmers 4. Nylon thread used by the weed trimmer (not traced to the product) 5. Glue to hold housing together 6. Plant janitorial wages 7. Depreciation on factory equipment 8. Rent on plant 9. Sales commissions 10. Administrative salaries 11. Plant utilities 12. Shipping costs to deliver finished weed trimmers to customers
1. Direct Materials 2. Direct Materials 3. Direct Labor 4. Manufacturing Overhead 5. Manufacturing Overhead 6. Manufacturing Overhead 7. Manufacturing Overhead 8. Manufacturing Overhead 9. Period Cost 10. Period Cost 11. Manufacturing Overhead 12. Period Cost
Would the following companies most likely use job order costing system or process costing system? 1. Paint manufacturer 2. Print shop 3. Caterer 4. Soft drink bottler 5. Yacht builder
1. Process costing 2. Job order costing 3. Job order costing 4. Process costing 5. Job order costing
Which one of the following companies is most likely to use job order costing?
A law firm
Would an advertising agency use job order or process costing? What about a cell phone manufacturer?
Advertising agency—job order costing ; Cell phone manufacturer—process costing
Manufacturers follow four steps to implement a manufacturing overhead allocation system. The last step is?
Allocate some manufacturing overhead to each individual job.
Which of the following statements is true of costing systems?
An accounting firm would likely use a job order costing system.
When is the predetermined manufacturing overhead rate computed?
Before the period starts
Over Allocated Overhead
Costs occur when the actual manufacturing overhead costs are less than allocated manufacturing overhead costs.
The job cost record summarizes which of the following sets of information for each job?
Direct materials, direct labor, and manufacturing overhead
Service
Does not sell products. They sell time, skills, and knowledge.
Use of the Internet for business functions such as sales and customer service. Enables companies to reach customers around the world.
E-Commerce
Software system that integrates all of a company's functions, departments, and data into a single system.
ERP
Which is not a characteristic of management accounting information?
Emphasizes the external financial statements
Financial Accounting
Focuses on providing information for external decision makers.
Managerial Accounting
Focuses on providing information for internal decision makers.
A system in which a company produces products just when they are needed to satisfy needs. Suppliers deliver materials when they are needed to begin production, and finished units are completed at the right time for delivery to customers.
JIT
An ________ is an estimated manufacturing overhead rate computed at the beginning of the year.
Predetermined manufacturing overhead rate
Merchandising
Resells products previously bought from suppliers.
A philosophy designed to integrate all organizational areas in order to provide customers with superior products and services while meeting organizational objectives. Requires improving quality and eliminating defects and waste.
TQM
Cost accounting systems are used _______.
To accumulate product cost information
Evaluating a company's performance by its economic, social, and environmental impact.
Triple Bottom Line
Manufacturing
Uses labor, equipment, supplies, and facilities to convert raw materials into new finished products.
In the basic flow of inventory through a manufacturing system, which of the following occurs second in the job costing system?
Work in process inventory
A typical manufacturing overhead cost would be
depreciation on the plant.