Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Cost Acct > EXAM 3 > Flashcards

EXAM 3 Flashcards

1
Q

When managers make decisions, they need to 1) ___ the 2) ___ (and __) among the 3) al___ actions.

So managers need to 4) _____ the costs associated with that alternative

A

1) compare
2) cost (and benefits)
3) alternative
4) estimate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Cost estimates can be an important element in helping managers make 1) ____ that add 2) ___ to the company

What adds value to the firm (2 points)?
-improves 3) ____ and ____ etc.

A

1) decisions
2) value
3) profitability and better decisions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

The most important characteristic of cost for decision making is how they 1) ___ (how they 1.0) ___ with activity)

Therefore, the basic idea in cost estimation is to 2) ____ the relation between 3) ___ and the 4) ____ affecting them, the cost 5) ____

A

1) behave
1.0) vary
2) estimate
3) costs
4) variables
5) drivers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the 2 key terms of cost behavior?

What’s the formula of the cost equation?

___ = ___ +___

A

variable costs and fixed costs

Formula = TC = F + VX

TC = total costs
F = fixed costs (don’t vary with activity levels)
V = variable costs (per unit of activity)
X = volume of activity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Variable costs 1) ___ proportionately with activity levels and fixed costs 2) ___

A

1) change
2) do not

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are 3 general methods to estimate the relation between cost behavior and activity levels?

1) E _____ ___
2) Ac____ ___
3) S_____ ____ (like regression analysis)

A

-Engineering estimates
-Account Analysis
-Statistical methods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

For the general methods to estimate the relation between cost behavior and activity levels (Engineering estimates, Account Analysis, Statistical methods

It’s a good idea to use 1) ____ than 2) ___ method so that results can be 3) ___

A

1) use more
2) one
3) compared

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Define Engineering Estimates

cost estimates are based on 1) m__ and then 2) p__the 3)___invovled in a task

activities involved is 4) la____, r___, and i____

A

1) measuring
2) pricing
3) work
4) labor, rent, insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Engineering Estimates also estimates the 1) __ and ___ for each activity

A

1) time and cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What are the advantages of the Engineering Method

  1. it can 1) ____ each 2) ___ required to perform operation
  2. permits 3) ____ with other centers with 4) si___ operations
  3. doesn’t require 6) ___ from 7) ___ activities in the organization
    -it can be used to estimate costs for totally 8) __ activities
A

1) detail
2) step
3) comparison
4) similar
6) data
7) prior
8) new

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are the disadvantages of Engineering Estimates ?

  1. can be 1) ____ to use
  2. based on 2) ___ conditions
A

1) expensive
2) optimal

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

A company that uses engineering estimates often can identify where 1) ___ exists in operation

A

slack

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Define Account Analysis

1) r___ each 2) a_____making up the total 3) ___ being analyzed.

A

1) reviews
2) account
3) cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Account analysis 1) __ each 2) ___ account used to record costs that are of 3) __, if it’s 4) __ or ___ (depending on the relationship with the cost activity)

A

1) reviews
2) cost
3) interest
4) fixed or variable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What’s a key step in account analysis ?

Identifying the relation between the 1) __ and the 2) __

A

1) activity
2) cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Account analysis is a useful way to 1) est___ c__

it uses the 2) ___ and 3) __ of managers and accountants who are familiar with company 6) __. and the way cost 7) ___ to 8) __ in activity level

A

1) estimate costs
2) experience
3) judgment
6) operations
7) react
8) changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Account analysis relies heavily on 1) ___, which can be a disadvantage/advantage depending on the 2) ___ of the person making the estimate.

The decisions based on the cost estimate can have a major 3) ____ co______ for the people making them

A

1) personal judgment
2) bias
3) economic consequence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is an advantage of the Analysis Method?

1) __ and 2) ___ are familiar with company 3) ___ and the way 4) ___ react to 5) __ in activity levels

There’s a card for this before this is just saying it again (but study it!)

A

1) managers
2) accountants
3) operations
4) costs
5) changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What are the disadvantages of the Analysis Method?

-managers and accountants may be 1) __

-decisions often have major 2) ___ ____ for managers and accounts

There’s a card for this before this is just saying it again (but study it!)

A

1) bias
2) economic consequences

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Define Statistical Cost Estimation

analyze costs within a 1) ___ ___, which is the 2) __ within a cost estimate may be 3) ___

A

1) relevant range
2) limits
3) valid

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Statistical Cost Estimation

Relevant range for projection is usually between 1) ___ and __ limits (bounds) of 2) __ activity levels for which data is 3) ___

A

1) upper and lower
2) past
3) available

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

A graph that you can use for statistical cost estimation is

A

a scattergraph

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Scattergraph

-the slope of the line represents the estimated 1) ____ costs per unit. The intercept with the vertical axis represents an estimate of the 2) ___ costs

A

1) variable
2) fixed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Scattergraph

-the slope is referred to as the variable per unit because it represents the 1) ___ in costs that occurs as a result of changes in 2) ____

-the intercept is referred to as the fixed costs because it represents the cost incurred at a 3) ____level

A

1) change
2) activity
3) zero

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Define High-low cost estimation

method to estimate cost based on 1) __ cost observations, which are the 2) __ and __ 3) __ levels

A

1) two
2) highest and lowest
3) activity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

SB 5-2

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Define Regression

designed to generate a 1) __- that 2) ___t fits a set of data points

uses 3) a___ ____ points

A

1) line
2) best
3) all data

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Regression techniques…

-it uses all data points, the resulting estimates have a 3) ___ base than those based on a few select points (like high and low activity levels)

-generates 4) __ that helps a manager determine how well the estimated 5) re____ equation describes the relations between 6) ___ and __

A

3) broader
4) info
5) regression
6) costs and activities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Obtaining Regression Estimates

-the most important step in obtaining regression estimates for cost estimation is to establish the 1) e___ of a logical 2) r____ between 2.0) ac___ and the cost to be 2.1) es____
these activities are referred as 3) ___, which are the 4) ___ terms/____ variable or the 5) __ (RHS) of a regression equation
the cost to be estimated is called the 6) ___ ___, the 7) ___ term or the 8) ___ (LHS) of the regression equation

A

1) existence
2) relation
2.0) activities
2.1) estimated
3) predictors
4) X terms/independent variable
5) right-hand side
6) dependent variable
7) Y term
8) the left-hand side

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

The independent variable in regression is the 1) ____ term or 2) ____r
-the activity that 3) p___ the 4) c___ in cost

The dependent variable in regression is the 5) ___ term
-cost to be 6) ___

A

1) X
2) predictor
3) predicts
4) change
5) Y
6) estimated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Define Correlation Coefficient

-1) m__ the 2) p__ of the data points to the 3) __ line
-which is referred as 4) ___

other definition
-the 5) m___ the 6) li____r rel____ between 7) va___s

A

1) measures
2) proximity
3) regression
4) R

5) measure
6) linear relationship
7) variables

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Correlation Coefficient (R)

-the closer R is to 1.0, the 1) __ the data 2) __ are to the regression line (the more we 2.0) ___ it)

-the closer R is to zero, the 3) __ the 4) __ to the regression line (the more we 4.0) ___ like it)

A

1) closer
2) points
2.0) like
3) poorer
4) fit
4.0) don’t

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Correlation Coefficient is also called

A

R, Multiple R

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Define Coefficient of Determination

-interpreted as the proportion of the variation in the 1) ____ variable (__ terms) by the 2) ___ side (__ terms, the ___ variable) of the regression equation

-referred as the 3) ____ (___)

-it’s the 4) _____ of the correlation coefficient

A

1) dependent variable (Y terms)
2) right hand side (X terms, the independent variable)
3) R-squared (R^2)
4) square

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

When the correlation coefficient is squared and adjusted for the number of independent variables used to make the estimate, it is called ____

A

adjusted R^2

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

The most commonly used regression technique is called 1) ___ ___ of ____ regression (OLS)

-this technique, the regression line is computed so that the 2) ___ of the squares of the 3) __ distances from each point to the regression line is 4) __
-therefore, it’s important to beware of 5) ___data points that vary significantly from the usual

A

1) ordinary least of squares regression (OLS)
2) sum
3) vertical
4) minimized
5) including

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Because the regression program seeks to minimize square differences, the inclusion of these extreme points or “outliers” can significantly affect the results

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Define t-statistic

it’s used to 1) __ the 2) __ of the coefficient

-the general rule of thumb, a t-statistic greater than 4) __ is considered 5) __. If it is significant, the cost is 6) ___ totally 7) ___

A

1) test
2) significance
4) 2.0
5) significant
6) NOT
7) fixed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

How is t-statistic calculated?

– the value of the estimated 1) co___ (___), 2) ____by its estimated 3) s___ ___r (SEb)

A

1) coefficient (b)
2) divided
3) standard error (SEb)
-it’s a little b

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

Define Adjusted R-squared (R^2)

the correlation coefficient squared and adjusted for the number of 1) ___ used to make the estimate

this adjustment to R^2 recognizes that as the number of independent variables increases, R^2 (unadjusted) will 2) _____

don’t learn it

A

1) independent variable
2) increase

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

Adjusted R-squared (R^2)

Statisticians believe that R^2 is a 1) ___ measure of the association between 2) __ and ___ than the 3) un__ ____ value when more than one 4) ___ predictor is used

don’t learn it

A

1) better
2) X and Y
3) unadjusted R^2
4) X

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

Define Multiple Regression

when more than 1) o____ p____ (__) is in the model

X1: ___ hours
X2: ___ costs

What’s the equation ?
Total costs = ___(__) + ____(__) + ___ costs

A

1) one predictor (X)

Total Costs = Variable costs(X1) + Variable Costs(X2) + fixed costs

X1: laborhours
X2: materials costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

What are the more common problems with using regression estimates?

  • attempting to 2) ___ a 3) ___ equation to a 4)___ data
  • failing to 6) ___ 7) ___ observations (called 8) “___”)

-including 9) __ with apparent, but spurious relations to the 10) __ variable

-using data that 11) ___ fit the 12) as __ of regression analysis

A

2) fit
3) linear
4) nonlinear
6) exclude
7) unrepresentative
8) outliers
9) predictors
10) dependent
11) don’t
12) assumptions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

What are the practical implementation problems

-1) __ relations
-2) o___
-3) ___ relations
-using data that 4) ___ the 5) __ of regression analysis

A

1) nonlinear
2) outliers
3) spurious
4) don’t fit
5) assumptions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

Effect of Nonlinear Relations

the effect of attempting to fit a linear model to nonlinear data is likely to occur when the firm is operating near its 1) ___ li___

Close to maximum capacity cost 2) ___ more rapidly than activity overtime

A

1) capacity limits
2) increase

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

Effect of Outliers

because regression minimizes the sum of the squared deviations from the regression line, observations that lie a significant distance away from the line could have an 1) ___on the regression estimates

A

1) overwhelming effect

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

Effect of Spurious Relations

-It’s sometimes tempting to include 1) m__ ___ in the regression and let the program 2) “___” r__ among the variables
this can lead to spurious relations

The association will typically be quite 3) ___, but both are driven by 4) __t

A

1) many variables
2) find relations
3) high
4) output

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

Effects of Using Data that Don’t Fit the Assumptions of Regression Analysis

2 important assumptions that are NOT satisfied in estimating costs
-the process of which cost are being estimated remains 1) ___ o___
-the errors in estimating costs are 2) in__ of the cost 3) ____

A

1) constant overtime
2) independent
3) drivers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

Effects of Using Data that Don’t Fit the Assumptions of Regression Analysis

regression analysis assumed the process stays the same, so it leaves the cost analyst with 2 choices

Choice 1: the analyst can restrict to a 1) __ period and assumed the process has remained the 2) __
-estimates will 3) __ be as 4) ___ because there are relatively 5) __ observations

Choice 2: the analyst can use 6) ___ period. As long as the process has 7) ___ ___d
-then the estimates will be 8) __ ___ (since it’s based on more 9) ___), but the analyst risks using estimates that might 10) __ be meaningful if the process has 11) ___

A

1) short
2) same
3) not
4) reliable
5) few
6) longer
7) not changed
8) more reliable
9) information
10 not
11) changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

Users of regression should

  1. fully understand the 1) __and its 2) __
  2. 3) __ the model, that’s the hypothesized relation between 4) __ and __ pre___
  3. know the 5) ___ of the data being 6) __
  4. examine a 7) __ of the data

And regression estimate is only a ___

A

1) method
2) limitations
3) specify
4) costs and cost predictors
5) characteristics
6) uses
7) plot

only an estimate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

How is an Estimation Method is Chosen

What are the advantages?
-reliance on 1) ____data is relatively 2) i___e

-computational 3) t__ allow for more 4) ___ to be used than for 5) no___-s___ method

A

1) historical
2) inexpensive
3) tools
4) data
5) non-statistical

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

How is an Estimation Method is Chosen

What are the disadvantages?

-reliance on historical data may be the 1) o___ re__ available, cost effective basis for estimating costs

-analysis must be 2) al__ to cost 3) ac__ c__

A

1) only readily
-basically relying only on historical data is not gonna be great

2) alert
3) activity changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

Define learning phenomenon

Systematic relationship between the amount of 1) ___ in performing a 2) __ and the __ required to perform it

A

1) experience
2) task and the time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
54
Q

The learning phenomenon means that variable costs tend to 1) __ per unit as the volume of activity 2) ___
-so the linear cost estimate will 3) ___ the variable cost per unit

A

1) decrease
2) increases
3) overstate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
55
Q

The learning phenomenon affects the most 1) ___ activities (2) ____ costs)

A

1) professional
2) overhead

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
56
Q

What are Data problems
-1) __ data
-2) o__
-3) in__
-4) al__ and d___y costs
-5) mi ___ t___ periods

A

1) missing
2) outliers
3) inflation
4) allocated and discretionary
5) mismatched time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
57
Q

SB 6-1

A
58
Q

Define cost management

provides information about the costs of 1) p__ , pr___, and s__ 2) u_ and p__ by an organization

A

1) process, products, and services
2) used and produced

59
Q

A major role of cost management is to report the cost of 1) pr___ or pro___ the organizations 2) pro___/s____

A

1) producing or providing
2) product/services

60
Q

What’s the purpose of calculating the individual product cost?

The accountant needs to provide the individual product cost to the various products managers so to make 1) ___ regarding 2) pri___, 3) pr____, 4) pro__, etc.

A

1) decisions
2) pricing
3) production
4) promotion

61
Q

What are keys to good cost management system?

-oriented to the needs of the 1) d___ m____

-designed so that 2) __ 3) e___ c____ (called the ____ ___ test)

A

1) decision makers
2) benefits
3) exceed costs (cost benefit test)

62
Q

The objective of the cost management system is to provide 1) i___ about costs 2) __t for 3) d___ m___

A

1) information
2) relevant
3) decision making

63
Q

Costs that are common to 2 or more cost objects are likely to be 1) al___ to those cost objects on a somewhat 2) ar___ basis

A

1) allocated
2) arbitrary

64
Q

Cost allocation can lead to

1)___ information and 2) __ decisions

A

1) misleading
2) poor

65
Q

the cost management system 1) a__ and r__ costs about 2) p__, p__, and se___

A

1) accumulates and reports
2) processes, products, and services

66
Q

The goal of well-designed cost management system is to balance the 1) po__ d___ in reported product cost with the cost of conducting a special study every time a manager needs to make decision

A

1) potential distortion

67
Q

Our goal in designing the cost management system is to ensure that we make the 1) ___ ___-off between cost of 2) b__ ___ons and the cost 3) d___ the __

A

1) best trade-off
2) bad decisions
3) developing the info

68
Q

Reasons to calculate product/service

Decision Making
-deciding what to ___
-setting ____
-knowing the ____ and c__ of in___

A

-deciding what to sell
-setting prices
-knowing the COGS and cost of inventory

69
Q

How costs from the cost pool are assigned and allocated to the cost object is illustrated on a(n) ___ diagram

A

cost flow

70
Q

3 points relate to designing a new cost system for managerial purposes

-cost system should have a 1) ___ f___

-different cost information is used for 2) __ pu___

-cost information for managerial purposes must meet the 3) ___ test

A

1) decision focus
2) different purposes
3) cost-benefit test

71
Q

3 points relate to designing a new cost system for managerial purposes
1. Cost system should have a decision focus

cost systems must meet the needs of the 1) ___-m___ (c__/u__) of cost accounting. If the cost system is not designed to provide these data, it will not meet the 2) ___ needs

it’s important to design the cost system so that the cost data provided by the cost system facilitate the 3) ___-____ of the user

A

1) decision-makers (customers/users)
2) manager’s
3) decisions making

72
Q

3 points relate to designing a new cost system for managerial purposes
2. Different cost information is used for different purposes

What works for one purpose will not necessarily work for another purpose. Cost information must provide the 1) ap__ __ for its 2) in____ p___

A

1) appropriate data
2) intended purpose

73
Q

3 points relate to designing a new cost system for managerial purposes
3. Cost information for managerial purposes must meet the cost-benefit test

Cost information can always be improved. However, the 1) be___of improvements (ex better decisions) must 2) ou___ the cost of making the improvements.

So ask the basic question, “will the benefits outweigh the costs”

A

1) benefit
2) outweigh

74
Q

What’s the equation for the basic inventory equation (cost flow model)?

___ + __ - __ = ___

A

Beginning Balance + Transfers In - Transfers Out = Ending Balance

BB + TI - TO = EB

75
Q

BB + TI - TO = EB

Beginning Balance + Transfers In - Transfers Out = Ending Balance

For this equation, which accounts are true for it (3)?

A

-raw materials
-work in process
-finished goods

76
Q

Lenox manufactures a special fluid at its Hazard plant. Operating data follows

Materials 2,499,000
Labor 214,200
Manufacturing OH 856,800

The Hazard plant produced 1,050,000 liters in November. The plan has never any beginning/ending inventories.

Compute the cost per liter of liquid produced in November.

A

Add up all costs
2,499,000 + 214,200 + 856,800 = 3,570,000

3,570,000/1,050,000 = 3.40 cost per liter

77
Q

Skilled workers that can easily track their time to products being produced are classified as direct __ ___

A

direct labor costs

78
Q

Costs that cannot be directly traced to products at a reasonable cost are classified as ___ ___ costs

A

manufacturing overhead costs

79
Q

Allocation base

-needs to be measured for each 1) __ ob__ before it can be used to allocate 2) ___ ____

-a common allocation base is 3) __ l____

-it should have a 4) ___ 5) __ and ___ with the costs incurred

A

1) cost object
2) manufacturing overhead
3) direct labor
4) direct
5) cause and effect

80
Q

Define predetermined overhead rate

1) __ per __ of the 2) ___ b__ used to charge 3) ___ to products

always used 4)____ annual OH cost

A

1) cost per unit
2) allocation base
3) overhead
4) estimated

81
Q

What’s the equation for predetermined OH rate?

predetermined OH = ____ / ___

A

estimated OH/estimated allocation base

82
Q

Major inventory components that go into the production of products and can be easily assigned to the cost of the products are classified as direct ___ ___

A

direct material costs

83
Q

If most overhead costs are employee-related and affected by wage rate, the best choice for overhead allocation is probably direct ___

A

direct labor cost

84
Q

If costs are largely determined by the labor activity regardless of the seniority/skills, direct ___ would be a better choice

A

direct labor hours

85
Q

Predetermined OH Rates

Why use estimates?

-products need to have costs 1) ap____/_____d d___ the period

-the 2) ___ amount of 3) in___t costs is 4) ____ known until the 5) ___ of the period

A

1) applied/allocated during
2) exact
3) indirect costs
4) not
5) end

86
Q

What’s a characteristic of a discrete production process?

It includes a distinct 1) ___of s____ that all units 2) ___ or __ go through

A

1) set of steps
2) may or may not

87
Q

Define job costing

records 1) __ and __ for each 2) i___ __

an accounting system that traces costs to individual units or to 3) s___ ___, __, or ___ of goods

A

1) cost and revenues
2) individual job
3) specific jobs, contracts, or batches of goods

88
Q

Define process costing

1) d___ se__ and r___ costs for each unit

An accounting system used when 2) i___ units are produced through a series of uniform 3) __steps

A

1) doesn’t separate and record
2) identical
3) production

89
Q

What are production flows for job costing

  • c___tion
  • co___
  • h____
  • m___s
  • ___ accounting
  • se__
  • ____ homes
A

construction
consulting
hospitals
movies
public accounting
services
custom homes

(all are job shops)

90
Q

what type of product is job costing ?

ex. hospitals, consulting, construction

its a c _____ product

A

customized product

91
Q

What are production flows for process costing?

A

petroleum, paint, tissues

(all continuous flow processing)

92
Q

What type of product are process costing?

h___ product

A

homogenous product

93
Q

Define continuous flow processing

System that generally 1) __-produces a __, __ output in a 2)___ process.

A

1) mass-produces a single, homogeneous
2) continuing

94
Q

SB 7-1

A
95
Q

Define job

1) p__/s___ that can be 2) e___ (or at a 3) __cost) 4) __ from other products/services

for which the firm desires that a 5) __ cost be recorded for the product/service

6) ____ba___of items

A

1) product/service
2) easily
3) reasonable
4) distinguished
5) specific
6) small batches.

96
Q

Define job shops

firms that ___ j__s

A

1) produce jobs

97
Q

Define job cost sheet

1) ___ of the 2) __ of the job kept in the accounting system.

A

1) record
2) cost

98
Q

The job cost sheet is a 1) _____ account that provides the 2) ___ for the 3) ____ account which is the 4) __ account

the 5) ____ on the balance sheet is a 6) ___ account which is supported by a subsidiary ledger for each customer

A

1) subsidiary ledger
2) detail
3) work in process
4) control
5) accounts receivable
6) control

99
Q

Define Subsidiary Ledger Account

account that 1) ___ 2) __ transactions for a 3) sp___ 4) ___, ___, or j__

A

1) records
2) financial
3) specific
4) customer, vender or job

100
Q

Define Control Account

account in the 1) ___ ledger that 2) s___ a set of 3) ___ ledger accounts

A

1) general
2) summarizes
3) subsidiary

101
Q

What are the 3 components of product costs

A

direct materials (can be traced)
direct labor (can be traced)
manufacturing costs (allocate it/assign/apply)

102
Q

All direct materials, that includes 1) ___ ____, and other materials are 2) ___ as 3) ___

how would the journal entry look like?

A

1) storage, supplies
2) debited
3) material inventory

Materials Inventory
Accounts Payable

103
Q

The journal entry to record the direct materials transferred to a job includes a debit to _____

A

Work in Process Inventory

104
Q

The journal entry to record the direct materials transferred to a job includes a credit to ______.

A

materials inventory

105
Q

The entry to record the direct labor incurred and assigned to a job includes a credit to ____

A

wages payable

106
Q

The entry to record the direct labor incurred and assigned to a job includes a debit to ______.

A

work in process inventory

107
Q

The journal entry to record the purchase of direct materials on account includes a debit to ____

A

materials inventory

108
Q

The journal entry to record the purchase of direct materials on account includes a credit to ______

A

accounts payable

109
Q

The journal entry to record the applied manufacturing overhead cost includes a debit to ______.

A

Work in process inventory

110
Q

The journal entry to record the transfer of inventory to finished goods includes a credit to ______

A

Work in Proces Inventory

111
Q

The journal entry to record the transfer of inventory to finished goods includes a debit to ______.

A

finished goods

112
Q

The journal entry to record the purchase of direct materials on account?

A

Materials Inventory
Accounts Payable

113
Q

The journal entry to record the direct materials transferred to a job ?

A

Work In Process Inventory
Materials Inventory

114
Q

The entry to record the direct labor incurred and assigned to a job ?

A

Work in Process Inventory
Wages Payable

115
Q

what’s the entry for sale of finished goods?

A

COGS
Finished Goods Inventory
Accounts Rec
Revenue

116
Q

Look at other entries on your piece of paper

A
117
Q

When a company sells finished goods on account for $75,000 that cost $50,000 to produce, the accounts debited include ____ and____

A

COGS and Accts Rec

118
Q

Direct labor is different from direct materials. There is no 1) ___, so the cost is recorded in the 2) ___ account

and the accounting document that records this cost is the 3) ___, which includes fields for the 4)__ and 5) ___/___
-the time card can be physical or virtual to fill out

A

1) “store”
2) work in process
3) time card
4) job number
5) start/end times

119
Q

Manufacturing overhead is more complicated than direct labor and direct materials.

It’s pooled 1) ___ into 2) __ account and then allocated to 3) i___ jobs based on an arbitrary allocation base

A

1) together
2) one
3) individual

120
Q

When manufacturing OH control is more than applied manufacturing OH, it’s _____ overhead

EX.

actual overhead is $50,000 and applied overhead is $48,000, then overhead is underapplied

A

underapplied OH

121
Q

If actual overhead is $45,000 and applied overhead is $48,000, then overhead is ____

A

overapplied

if you switch the numbers then its underapplied

122
Q

Summary of Steps in Job Costing System

  1. Select an 1) ___ for computing the 2) ___ rate
  2. Estimate 3) __ for each overhead 5) __
  3. Calculate the 6) ___ rate by dividing the estimated 7)
  4. Record 8) ___ costs for each 9) __ they are incurred
  5. Apply 10) ___ using the 11) ___ rates as jobs are 12) ___ or when the 13) ____ ___ are prepared
  6. If there is over or underapplied overhead, either 14) ___ it ___ directly to ___ or allocate it to and 15) ___ inventories
A

1) allocation base
2) predetermined
3) overhead

5) cost
6) predetermined
7) allocation
8) direct
9) job
10) overhead
11) predetermined
12) completed
13) financial statements are prepared
14) write it off directly to COGS
15) COGS and ending inventories

123
Q

When applied overhead is more than actual overhead, the journal entry made at the end of the period ______ Cost of Goods Sold

A

reduces

too much was applied, the entry will credit COGS

124
Q

When a company uses both an Applied Manufacturing Overhead account and a Manufacturing Overhead Control account, the journal entry to write off overapplied or underapplied overhead will always debit____

A

applied manufacturing overhead

125
Q

When overhead is applied to products, the ___ account is credited

A

applied manufacturing overhead

126
Q

Define normal costing

cost of determined by 1) ____ ____, 2) ___ ___, and 3) ___ ___ using the 4) ___ and the 5) ____ allocation base

A

1) actual DM
2) actual DL
3) applied OH
4) POHR
5) actual

127
Q

Define actual costing

cost of job determined by 1) ___ ___, 2) ___ ___, and 3) ___ ___ using 4) ___ ____ ___ and the 5) ____ allocation base

A

1) actual DM
2) actual DL
3) applied OH
4) actual OH rate
5) actual

128
Q

Define standard costing

cost of job determined by 1) ____ ____ DM, 2)____ , and applied OH using the 3) ___ ___ and a 4) _____ allocation base

A

1) standard (budgeted) DM
2) standard DL
3) POHR
4) standard (budgeted)

129
Q

When it comes to using Using Normal , Actual, and Standard Costing. Which ones do we use?

A

we use normal and standard. Not actual costing

130
Q

Debits to the Manufacturing Overhead Control are to record all of the following except _

direct materials
indirect materials
plant depreciation

A

direct materials

131
Q

2 common events that lead to manufacturing OH being applied and recorded-

-preparing ____ statement

-com____ a job

A

-preparing financial statements
-completing a job

132
Q

Job costing is similar for both manufacturing and service organizations.

What are the 3 primary differences ?

  1. Service organizations generally use 1) fe ___ ___ __than 2) ___ and s__ companies
  2. Service companies’ overhead accounts have slightly different names (3) ___ control, ___ overhead, etc)
  3. Service companies finished goods (or services) are charged to the cost of 4)___ rather than to 5) ___
A

1) fewer direct materials
2) manufacturing and service companies
(3) Service overhead control, applied service overhead,
4) services billed rather than to 5) ___

133
Q

Improprieties in job costing are caused by one or more actions

  1. Misstating the 1) ___ of __ion
  2. 2) ___ costs to the 3) ___ jobs or categories
  3. 4) m__ the cost
A

1) stage of completion
2) Charging costs
3) wrong jobs or categories
4) Misrepresenting

134
Q

Misstating the Stage of Completion

1) __ needs to know the stage of completion of the project to evaluate 2) __ and 3) ___ costs.

ex. If a job is 60% completed but 80% of the total budget has been spent, job supervisors may be tempted to 4) ______ the percentage of completion

A

1) management
2) performance
3) control
4) overstate

135
Q

Charging Costs to the Wrong jobs

to avoid the appearance of cost 1) __ on jobs, job supervisors sometimes instruct employees to charge costs the to wrong jobs

At a minimum, this misleads managers who rely on 2) ___ cost information for 3) __, ___, and other decisions.

At worst, it cheats people who are paying for a job on a 4) ___ plus f__ that doesn’t really cost as much as claimed
-this is 5) __ and __

A

1) overruns
2) accurate
3) pricing, cost control
4) cost plus fee
5) unethical and illegal

136
Q

Misrepresenting the Cost of Jobs

Managers might know the correct cost of the job but intentionally deceive a customer to obtain a larger payment.

They might perceive to obtain a larger loan for the job or other reasons. Government auditors generally work on site…

Costs can be misrepresented by choosing to allocate OH cost using the method that provides the most favorable result rather than attempting to find an allocation base that truly represents how OH resources are used.

A
137
Q

When a project has a cost overrun it ______ schedule

A

maybe on, ahead, or behind

138
Q

When compared to jobs, projects are more ______ to evaluate.

A

difficult

139
Q

The journal entry to record the applied manufacturing overhead cost includes a debit to ______.

A

Work in process inventory

140
Q

Define Manufacturing OH Control

used to track all 1) ____ ____ expenses (2) t____ account, wont exist on financial statements)

-indirect labor (debit 3) \_\_\_\_\_ , credit 4) \_\_\_\_ \_\_\_\_) and material costs (debit side of manufacturing OH control)
-property tax (debit 5) \_\_\_\_\_\_ , credit 6) \_\_\_
A

1) actual OH
2) temporary
3) Manu OH control
4) wages payable
5) Manu OH control
6) Accts Payable

141
Q

Applied Manufacturing OH – used to 1) ____ OH to jobs based on the 2) ____ ____ _
-entry is always the same
(this is for 2 accounts)
Debit 3) ___
Credit 4)_____

-sometimes it can be combined 
	5) \_\_\_\_\_\_\_\_\_
		6) \_\_\_\_\_
A

1) allocated
2) predetermined OH rate (POHR)
3) WIP
4) Applied Manu OH
5) Actual MAnu OH
6) Applied Manu OH

Cost Acct (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions