Cost Methods Flashcards
the cost accountant records JE to…
adjust the financial acc JEs and move product costs out of expense accounts into inventory accounts
the fianancial accountant records..
manufacturing costs as an expense when occured
financial accountant DM JE
DM $
AP or cash $
the FA reports DL
wage exp $
wages payable $
the FA reports MOH
___ exp $
___ exp $
Ap, cash, or AD $
the financial accountant reports period costs…
as occured
product costs are expenses to CGS when…
sold
for the actual method, the CA first does these JEs
WIP $ actual
DM $ actual
WIP $ actual
wage exp $ actual
WIP $ actual
____ exp $
____ exp $
the company wants _____ WIP
minimal
production is completed when…
products move from production line (WIP) to finished goods warehouse
CGM =
beg WIP
+ DM
+ DL
+ MOH
- end WIP
CGM is moved from _____ to _____
WIP; FG
when goods are sold to customers…
FG are removed from warehouse and shipped to customers and CGS is expensed
CGS is expenses when…
the product is sold and shipped
CGS =
beg FG
+ CGM
- end FG
steps for calculating MOH for NM
- actual
- estimated
- true up
estimated moh =
MOH rate x actual activity
in the t/up chart, when the subtotal is on the debt side, it is….
underapplied
underapplied JE
CGS $
MOH $
in the t/up chart, when the subtotal is on the credit side, it is….
over applied
overapplied JE
MOH $
CGS. $
underapplied means the company must…
add more costs
overapplied means the company must….
decrease costs
for the standard method, how do you estimate? =
est cost per 1 x actual units made
actual method is used when…
the company makes one product or the same products
the normal method is used when a company…
has more than one product, tracks actual DM and DL incurred
for the normal and standard methods, MOH is applied to…
each product
standard method is used by companies…
with lots of products and do not track DM or DL per product
in the normal and standard methods, the TOTAL estimated MOH must be adjusted to equal the…
TOTAL actual MOH incurred
