FiNaL Strecth II Flashcards
WHAT would be considered your Equivalent units of production (EUP)?
THE number of complete goods that could have been produced using the inputs consumed during the period
HOW do you get the total cost per equivalent unit transferred out?
THIS equals the unit cost for transferred-in costs, materials costs, and conversion costs
i.e. Transferred-in costs are by definition 100% complete
HOW are specific jobs tracked under Process Costing?
BY using a work-in-process account for each department through which the production of output passes
Fill in the Blank.
Units started and completed during the ___A___ are equal to units started minus ___B___.
A. current period
B. Beginning work-in-process
Fill in the Blank.
When ___A___ is 0, the two EUP methods yield the __B___ results
A. Beginning work-in-process
B. same
WHAT are appropriate cost drivers for an activity-based costing system?
(1) Cost of Measurement
(2) Behavioral Effects
(3) Degree of Correlation
WHAT is the cost of the EUP equal to under the Weighted-Average method of process costing?
Current costs (current period) plus the cost of BWIP (previous period)
True or False.
The objective of ISO 9000 standards is to ensure high quality products and services.
False.
WHY? - Because the objective of ISO 9000 standards is to ensure consistent quality even if the quality is poor.
The market will determine the quality of the end result
WHAT is an incremental Cost?
THE difference in total cost between two decisions
Thus, Only costs that will differ between the two alternative decisions are relevant
WHAT are considered “Common costs?”
THEY are Indirect Costs
WHY? - Because they are the cost of products, activities, facilities, services, or operations shared by two or more cost objects
i.e. THEY cannot be traced to a particular cost object
WHAT costing method is required by the SEC for financial reporting purposes?
Job Order And Process Costing
WHAT variance method applied is related to the difference between the actual factory overhead and the factory overhead applied in production?
THE “Net Factory Overhead Variance”
NOTE: This involves the “Three-Variance” Method for analyzing factory overhead
WHAT costing method is least likely to result in cost shifting in a manufacturing environment?
Activity-Based Costing (ABC)
WHY? - Because indirect costs are assigned to activities and then rationally allocated to end products under an ABC system
