Managerial Accounting Flashcards
Managerial Accounting is
concerned with providing info to managers for us within the organization (INTERNAL)
T/F Managerial Accounting does not need to follow GAAP/IFRS
True
direct cost
cost that can be easily and conveniently traced to specified cost object
indirect cost
cost that cannot be easily and conveniently traced rot specified cost object
direct materials
raw materials that become an integral part of the finished product and whose costs can be conveniently traced to the finished product
direct labor
labor costs that can be easily traced to individual units of product. also known as touch labor
manufacturing overhead
3rd manufacturing cost category- includes all manufacturing costs except direct materials and direct labor
prime cost
the sum of direct materials cost and direct labor costs
DM+DL
conversion cost
sum of direct labor and manufacturing overhead
selling cost
include all costs that are incurred to secure customer orders and get the finished product to the customer
product cost
all costs involved acquiring or making a product
period cost
all costs that are not product costs. all selling and administrative expenses are treated as period costs
variable cost
varies, in total, in direct proportion to changes in the level of activity
fixed cost
a cost that remains constant, in total, regardless of changes in the level of activity
direct materials + direct labor + variable manufacturing overhead
variable manufacturing cost
fixed manufacturing overhead + fixed selling expense + fixed administrative expense
total fixed cost
Which one of the following costs is a component of both manufacturing overhead and total manufacturing costs?
Factory utilities
Manufacturing costs are typically classified as
a. product costs or period costs.
b. direct materials or direct labor.
c. direct materials, direct labor, or manufacturing overhead.
d. direct materials, direct labor, or selling and administrative.
C. direct materials, direct labor, or manufacturing overhead.
If BWIP is $90 and $100 of direct labor cost, $200 of overhead cost, and $250 of material cost are incurred during the period, what is the cost of goods manufactured if EWIP is $50?
A. $440
B. $540
C. $590
D. $640
E. none of these
C. $590
The sum of the total additions to work in process during a period is
A. total manufacturing costs incurred this period
B. factory overhead applied
C. material used
D. cost of goods manufactured
A. total manufacturing costs incurred this period
Evans Inc. had the following activities during 20X5:
Direct materials used 401,000
Indirect materials used 84,000
Direct manufacturing labor 350,000
Indirect manufacturing labor 186,000
Property taxes on manufacturing plant building 28,800
Salespersons’ company vehicle costs 12,000
Depreciation on manufacturing equipment 264,000
Depreciation of office equipment 123,600
Miscellaneous plant overhead 135,000
Plant utilities 92,400
General office expenses 305,400
Freight out 30,000
Beginning work-in-process inventory 250,400
Ending work-in-process inventory 281,000
Beginning finished goods inventory 650,000
Ending finished goods inventory 610,000
a. What is the cost of direct materials used during 20X5?
b. What is cost of goods manufactured for 20X5?
c. What is cost of goods sold for 20X5?
d. What amount of prime costs was added to production during 20X5?
e. What amount of conversion costs was added to production during 20X5?
a. 401,000 b. 1,510,600 c. 1,550,600 d. 751,000 e. 1490200
The cost of units completed during a period is called
A. cost of goods sold
B. cost of goods manufactured
C. current manufacturing costs
D. finished goods inventory
B. cost of goods manufactured
Product costs are converted from cost to expense when
A. units are completed
B. materials are purchased
C. units are sold
D. materials are requisitioned
C. units are sold
Conversion costs are
A. manufacturing costs incurred to produce units of output
B. all costs associated with manufacturing other than direct labor costs and raw material costs
C. costs which are associated with marketing, shipping, warehousing, and billing activities
D. the sum of direct labor costs and all factory overhead costs
E. the sum of raw materials costs and direct labor costs
D. the sum of direct labor costs and all factory overhead costs
Management accounting:
A) Focuses on estimating future revenues, costs, and other measures to forecast activities and their results
B) Provides information about the company as a whole
C) Reports information that has occurred in the past that is verifiable and reliable
D) Provides information that is generally available only on a quarterly or annual basis
A. Focuses on estimating future revenues, costs, and other measures to forecast activities and their results
The collection of accounting data in some organized way is
cost accumulation
Cost objects include
products, customers, and departments
If products are the cost object, examples of direct labor cost for the manufacturer of oil well drilling tools would include:
wages of a machinist in the plant
Manufacturing costs are eventually reported on
The income statement as cost of goods sold
The general term used to identify both the tracing and then allocation of accumulated costs to a cost object is
cost assignment
