BEC MCQ Homework 1.3 Flashcards
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Equivalent units of production in the first quarter Under the Weighted average units Cost inventory valuation method
1) Complete the equivalent units of production
2) Compute the unit cost of production
3) Apply the equivalent units to the ending inventory
Units completed+ Completed portion of WIP
PROOF is BASE
Under FIFO method
Under FIFO method The equivalent units is compromised of three parts:
The completion of units of hand at the beginning of the period
The units started and completed during the period and the units partially completed at the end of the period.
The basic assumption of ABC costing is
Products or services require the performance of activities, and activities consume resources
Cost of goods sold for November is
Beginning blance of finished goods
Plus goods transferred to finished goods
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Finished Goods Available
COGS(Squeeze)
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Ending finished goods
Goods Transferred to Finished goods
Beginning bal of WIP
Plus total manufacturing cost
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Goods available to transfer
Goods transferred to finished goods(Squeeze)
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Ending Balance of WIP
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Under Weighted Average method what are the equivalent units
Units completed+ Ending WIP*Percentage completed
Treatment of normal and abnormal spoilage
Normal spoilage is inventoriable cost that is add to cost of inventory and abnormal spoilage is period cost that is expense it
ABC Costing
Multiple cause and effect releationships
To calculate the equivalent Units of production
The difference is how you treat the opening inventory and closing inventory opening inventory if they ask just the Total equivalent units of production Work in process if given 60% then take 40% for calculation Work in process Given * 40 % to complete Units started and completed: Units completed and transferred out- Units in beginning inventory () Add workin process at end Equivalent units of production
Conversion cost unit of inventory
In the closing inventory take the percentage of COnversion cost inventory
Engineered cost
Fixed cost that bears an observable and known releationship to a quantifiable activity base
Target Cost
Is carefully predetermined standard cost
process costing
is a method of allocating production costs to products and services by averaging the cost over the total units produced. Costs are usually accumulated by department rather than job
Operation costing
is a hybrid system that allows the company to use job order product costing for some costs of production process costing for others
Activity costing
ABC costing is a system that accumulates all costs of overhead for each of the activities for the organization then allocate those activity cost to the cots objects that caused the activity
Activity based costing is an accounting system that collects financial and operating data on the underlying nature and extent of cost drivers.
Revolution occurring in cost accounting
Using cost drivers as application bases to increase the accuracy of reported product costs.
Using throughput time as an application base to increase awareness of the costs associated with legthned throughput time
Using several machine cost pools to measure product costs on the basis of time in a machine center
Overapplied overhead
overhead overapplied occurs when the amount of overhead applies exceeds the actual amount of overhead incurred
Plant wide rate
plant wide rates will propably be used if manufacturing operations are all automated, basically labor based, if manufacturing overhead is the largest component of the product
Direct costing or variable or marginal costing
capitalizes only the variable production costs to inventory when fixed cost are expensed
relevant cost
Relevant costs are costs which are relevant to a particular decision
product cost
Product cost is assigned to goods that were either purchased or manufactured for resale
period cost
period costs are costs that are expensed during a period.
