Chapter 1-5 Exam 1 Review Flashcards
What are the variable costs? (6)
Indirect Materials, Direct Materials, Direct Labor, Utilities, Factory equipment, sales commission
Manufacturing Overhead is
Depreciation expenses on equipment used in production.
What are some MOH components? (5)
Rent of the factory building, wages/salaries of manufacturing managers, wages/salaries of managing staff, property tax, utilities of the factory.
Sales
-VE
———
=
CM
Sales -VE ---------- CM -FE -------- =
Net Operating Income
Sales - ? -------- GM - ? -------- NOI
- COGS
2. S&AE
T/F Job Order Costing is used for manufacturing companies, but not service companies.
False
T/F Job order costing is used in a situation where many different products, each with unique features, are produced each period.
True
T/F Regarding Absorption Costing: It relies on a predetermined overhead rate to apply direct materials cost of units to products
False
T/F Regarding Absorption Costing: It assigns all manufacturing costs, both fixed and variable, to the unit of product.
True
Predetermined Overhead Rate:
Estimated Total Overread Costs/
Estimated total units in the allocation base
T/F- Finished goods inventory includes actual manufacturing overhead costs assigned to jobs completed during
False
The cost of goods manufactured in the—-
the amount transferred from work in progress to finished goods
Journal entry to record the purchase of raw materials includes a debit in?
Raw Materials
T/F Operating leverage is a measure of how sensitive fixed costs are to a given percentage change in dollar sales.
False, NOI not fixed costs
