Cost Accounting (B3:M1-3)

Question 1

what kind of costs are utility costs?

Answer 1

semi variable

Question 2

what is included in conversion costs?

Answer 2

direct labor and overhead

Question 3

what is included in prime costs?

Answer 3

direct labor and direct materials

Question 4

indirect materials and indirect labor fall into what cost category?

Answer 4

overhead

Question 5

what is a mixed cost?

Answer 5

cost that includes both fixed and variable components

Question 6

what is product(ion) cost / total manufacturing cost?

Answer 6

DM, DL, OH applied

Question 7

what is relevant range?

Answer 7

the range of activity within which the relationships of fixed costs and variable costs are meaningful and valid

*fixed cost remains fixed and variable cost per unit does not change

Question 8

what is a cost driver?

Answer 8

a causal factor that increases the total cost of a cost objective

*cause and effect

Question 9

explain the characteristics of fixed and variable costs

Answer 9

fixed: total cost is fixed, but cost per unit varies
variable: total cost varies, but cost per unit is fixed

Question 10

are these costs inventoriable or period: normal spoilage and abnormal spoilage?

Answer 10

normal: inventoriable
abnormal: period

Question 11

weighted-average and FIFO equivalent units are the same when…

Answer 11

no beginning inventory exists

Question 12

process costing

Answer 12

allocates production costs to products/services by averaging cost over total units produced. costs are accumulated by department

Question 13

job order costing

Answer 13

allocates production costs to products/services that are identifiable as separate units

Question 14

operation costing

Answer 14

combines process costing and job order costing

Question 15

when is process costing and job costing used?

Answer 15

process: product is mass produced with same components
job: production of unique goods

Question 16

COGM = ?

Answer 16

COGS + end finished goods - begin finished goods

Question 17

what does it mean when applied OH exceeds actual OH expenses incurred?

Answer 17

OH has been over applied

*OH control account will have a credit balance

Question 18

can ABC be used with process or job costing?

Answer 18

it can be used with both

Question 19

net sales value at split-off = ?

Answer 19

sales price - cost to complete

Question 20

is ABC acceptable for external reporting?

Answer 20

no!

Question 21

how are joint costs most likely to be allocated (methods)?

Answer 21

relative unit volume, relative sales value at split-off, net realizable value

Question 22

what does ABC costing actually do?

Answer 22

assigns indirect costs based on a product’s demand for resource-consuming activities

*allocates costs based on the activity driving those costs

Question 23

when ABC is implemented, what happens to the number of cost pools and allocation bases?

Answer 23

both typically increase

Question 24

what are some factors that should be considered when selecting cost drivers for an ABC system?

Answer 24

behavioral effects, costs of measurement, degree of correlation

Question 25

what is an engineered cost?

Answer 25

bears an observable and known relationship to a quantifiable activity base