305 Midterm Chapter 3

Question 1

What are the 5 cost flow sections?

Answer 1

(1) Raw material inventory
(2) Factory Labor
(3) MOH
(4) WIP Inventory
(5) Finished Goods Inventory

Question 2

what are the Steps + formulas to calculate MOH Applied (chapter 3 questions)

Answer 2

Step 1: Calculate your predetermined MOH Rate (PMOH)
PMOH: (estimated MOH)/(Expected Activity)

Step 2: Calculate the Apply MOH based on actual amounts
AMOH: PMOH * Actual Activity Used

Step 3: Make adjustment
Adjustment: Actual MOH - Applied MOH = (+) increase COGS, OR, (-) Decrease COGS

Question 3

Adjustment of MOH COGS Methods for (1) Under, (2), Over

Answer 3

Under: Debit COGS, Credit MOH
Over: Debit MOH, Credit COGS

Question 4

When would you use COGS method vs Proration Method?

Answer 4

COGS Method is Immaterial (not a lot of money)
Proration Method is Material (A lot of money)

Question 5

What information do you need to make a Job Cost Sheet?

Answer 5

Job Cost Sheet
BWIP
DM Used
DL
AMOH
——————
= Total Cost
/ Units Produced
——————
= Cost per unit

Question 6

What information do you need to make a Normal costing income statement?

Answer 6

Normal Costing Income Statement
Sales
Unadjusted COGS
+BFG
+COGM
-EFG
————-
= Unadjusted COGS
Under applied (+) or (-) over applied
—————
= Adjusted COGS
= Gross Profit
- Period Expenses
————————-
= Operating income
- Taxes (OI x Tax Rate)
= Net Income

Question 7

What steps are required to job order costing questions?

Answer 7

Step 1. Calculate the PMOH
PMOH: (estimated MOH)/(Expected Activity)

Step 2. Prepare Job Cost sheet for JCS - Unfinished or Started Sheet

BWIP (DM + DL + (DL * PMOH))
DM
DL
AMOH (DL * PMOH)
———-
TC
Status

& JCS - Jobs in BGF
DM
DL
AMOH
TC

Step 3. Status
A) For jobs that are unfinished or just started:
1. Complete = COGM –> ( Sold = COGS or Not Sold = EFG)
2. Unfinished = EWIP

Step 4. Answer Questions

Question 8

How do you calculate the adjusted COGS

Answer 8

Add the COGS sums from job cost sheet + (Underapplied AMOH - Overapplied AMOH)

Question 9

P = Predetermined = ?

Answer 9

BUDGETED VALUES ONLY

Question 10

If applied overhead is allocated to inventory vs not allocated, which methods do you use?

Answer 10

Allocated = Proration
Not allocated = COGS

Question 11

What is another term for requisitions?

Answer 11

Materials used (DM used + Indirect used)

Question 12

AMOH formula

Answer 12

AMOH = PMOH *Actual DL

Question 13

When AMOH is given, use it to work backwards to find PMOH or Actual DL

Question 14

When calculating algebra from a T score, Add everything on the [. ] and subtract everything from the [. ]

Answer 14

Left, Right

Question 15

In regards to Factory Labour, how do you calculate factory wages & wages assignned?

Answer 15

DL + IL. Both are the same answer

Question 16

BWIP = $0 if job [. ]

Answer 16

started

Question 17

How do you calculate is the overhead over or under applied?

Answer 17

MOH
Actual Applied

Factory Rent X X
Factory Supplies X
Indirect Labor X
= SUM
Under or over?

Question 18

How do you prepare a COGS Schedual?

Answer 18

UCOGS
+ Underapplied MOH
ACOGS

Question 19

When asked the selling price given a % markup, what is the formula you use?

Answer 19

Selling Price = Cost of Job * (1+Markup%)

Question 20

When asked what is the net income for the year, what do you use to solve?

Answer 20

Normal Costing Income Statement

Question 21

DM + DL + AMOH From previous periods is what concept?

Answer 21

BWIP

Question 22

What is the formula to Calculate the adjusted gross profit?

Answer 22

Sales(UCOGS*%) - ACOGS = GP

Question 23

What is the formula for calculating accounts payable

Answer 23

Beg AP (account payable)
+ Purchases RM
- Cash Payments
————————-
= End AP

Question 24

What is the formula for calculating Raw Material

Answer 24

Beg RM
+ Purchases RM
- RM Used (DM Used + IM Used)
————————
= End RM