Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Cost Measurement > 2013-09-24 CPA BEC Cost Measurement - CPA BEC Cost Measurement > Flashcards

2013-09-24 CPA BEC Cost Measurement - CPA BEC Cost Measurement Flashcards

1
Q

What is cost accounting

A

involves the measuring, recording and reporting of product cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Cost accounting system

A

consists of accounts for various manufacturing cost.
Important features is the use of perpetual inventory system

Provides immidiate, up to date info on teh cost of a product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Types of cost accounting system

A
  1. Job order costing

2. Processing cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Objective of both Job order and process costing system

A

to provide:

  1. product cost
  2. cost control
  3. intentory valuation
  4. Financial statement presenation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Job order costing system

A

Costs are assigned to each job or to each batch

Each job/batch has its own destinguishing features

Objective is to compute the cost per job

used for uniqu product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Manufecturing cost

A

activities and process taht converts raw material into finished goods

  1. Direct Material
  2. Direct Labor
  3. Manufacturing overhead
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Indirect Matrial

A

Cannot be physically traced to end product

  1. dont become part of the finished good
  2. they can’t be traced becaseu their association wiht finished goods is too small
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Predetermined Variable OH rate

A

Is based on relationship between estimated annual overhead cost and expected annual operating activity.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Predetermined Variable OH rate

A

Estimated annual overhead cost / expected operating activity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Fixed Overhead rate

A

Estimate fixed cost / normal capacity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Manufacturing overhead

A

MO> assigned = underapplied

MO < assigned = overapplied

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Over or underapplied Manufecturing overhead

A

if immaterial - write off to cogs

if material - then charged to WIP, Finished godos and COGS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

fixed overhead over/under applied treatment

A

always chage to cogs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Service department costs are allocated based on

A
  1. Service provided
  2. Service available
  3. Benefit received
  4. Equity
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Cost allocated stages

A
  1. Allocate support department cost to producing department

2. Assignmnet of the allocated cost to individual product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Producing departments’ overhead

A
  1. Overhead directly associated with producing department

2. Overhead allocated to producing department from support departments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Steps to allocating support department’s cost to producing departments

A
  1. Departmentalize the firm
  2. classify each dept as support vs production
  3. Trace overhead cost to each dept
  4. allocate support dept cost to producing
  5. allocate off to individual product through predeterminded OH rate
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Sequential method of allocating cost

A
  1. Support dept of highest cost is allocated to smaller support departments
  2. Small support dept’s cost to producing dept
  3. Nothing gets allocated to the support dept with most cost
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Process cost accounting

A

focuses on teh process involved in mass producing productas that are identical

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Difference between Job Cost vs process cost

A
  1. Number of wqork in process accounts used
  2. Documents used to track cost
  3. the point at which costs are totalled (period of time)
  4. unitl cost computation
21
Q

Similaries of job order and process costing system

A
  1. Manufecturing cost elements are same
  2. Accumulation for cost types
  3. Flow of cost
22
Q

Process costing flow (PECUA)

A
  1. Physical flow analysis
  2. Calculate equivelent units
  3. Determine cost to allocate
  4. Compute Unit cost
  5. allocate cost to EWIP, Goods completed (valuation of inventory)
23
Q

Prime cost

A

DM + DL

24
Q

Coversion cost

A

DL + Overhead

25
Q

Physical flow of unit

A

Units to be accounted for:
Beg Unit + Started into production

Units accounted for:

Transferred out + End. unit

26
Q

Compute Equivelent unit

A

Material:
Transfered out (% X unit)
+ Ending COGS (% X unit)

Conversion Cost (CC)
Transfered out (% X unit)
\+ Ending COGS (% X unit)
27
Q

Computer production cost

A

( Beg DM + DM added)/ DM Equivelent units

CC: (Beg CC + CC added)/ CC equivelent unit

28
Q

Product cost

A 
Manufecturing cost (DM+ DL + OH)
OH = Indirect material, indirect labor, other indirect cost
29
Q

Period cost

A

Non-manufecturing cost
selling expense
Admin expense

30
Q

ABC (activity based costing)

A

An approach for allocating overhead cost to multiple cost pools then is assigns the activity cost pools to product by means of cost drivers

31
Q

Benefits of ABC

A
  1. ABC leads to more cost pools
  2. ABC leads to enhanced control overhead costs
  3. ABC leads to better mgmt decision
32
Q

Limitations of ABC

A
  1. expensive

2. arbitary allocation continues

33
Q

When to use ABC

A
  1. Product lines differ greatly in volume and manufecturing complexity
  2. product lines are numeours, divers, adn require different degress of support cost
  3. overhead cost constitues significant portion of total cost
  4. manufecturing process changed significantly
  5. production managers ignoring data
34
Q

Types of activity level

A

Unit level
batch level
Production level
Facility Level

35
Q

Joint product

A

two products procuded together up to a split off point. Can’t be produced by themselves

36
Q

Valuation methods of joing cost

A
  1. Physical unit
  2. Weighted ave
  3. sales value at split off point
  4. Net realizable value
  5. Constant gross margin %
37
Q

Net realizable value

A

Market price - futher processing cost
= Hypothetical price X # of unit = Hypothetical value

then apply joint cost %

38
Q

When to use Net realizable value

A

use only if sales value @ split off point is not available

39
Q

Sell or further process

A

Futher process only if incremental reveneu is > than incremental cost.

Joint cost should be ignored

40
Q

By-product treatement for Financial reporting

A

Revenue is immaterial
Recoreded a other income or recudction to COGS
Any further cost to by-product is recoreded as reduction to other income or increse of COGS
Recored as ordinary sales

41
Q

Constant Growth Margin

A

(Joint cost + Futher processing cost ) / Final revenue = Gross margin/final revnenue = GM %

Final value - Margin $= COGS - Seperable cost = joint cost to product

42
Q

Cost estimation approaches (4)

A

Industrial engineering
Conference method
account analysis
Quantitative methods

43
Q

4 types of qunatetative methods

A
  1. Scattergrah
  2. High low
  3. Regression
  4. correlation analysis
44
Q

High low method

A

Chage in cost between high and low point / change in activity between high and low point

Give VC per unit

45
Q

Regression analysis

A 
Y = a + bx
Y = estimated total cost
a = fixed cost
b = slope, VC
X quantity
46
Q

R Square

A

Coefficient of determination

the closer it is to 1, the more causal the relationship

47
Q

Reason why OH will be overapplied

A
  1. overhead cost were overestimated
  2. Actual capacity was greate than noral capacity
  3. Actual overhead costs were less than expected
48
Q

Why would overhead be underapplied?

A
  1. overhead costs were underestimated
  2. Actual activity was less than normal capacity
  3. Actual overhead was higher than expected

Cost Measurement (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions