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Cost and Managerial Accounting > Review > Flashcards

Review Flashcards

1
Q

Under applied manufacturing overhead

A

Excess of ACTUAL manufacturing overhead costs over applied manufacturing overhead costs

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2
Q

Over applied manufacturing overhead

A

Excess of APPLIED manufacturing overhead costs over actual manufacturing overhead costs

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3
Q

Cost of Goods Manufactured

A

Total manufacturing costs
+ Beginning Work-In-Progress
- Ending Work-In-Progress

Cost associated with units completed and transferred out during current production period

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4
Q

Cost of Goods Sold

A

Cost of Goods Manufactured
+ Beginning Finished Goods Inventory
- Ending Finished Goods Inventory

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5
Q

Equivalent Units of Production

A

Work required to COMPLETE units in beginning inventory
+ Number of units started and completed this period
+ Degree of completion of units in ending inventory

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6
Q

Total Manufacturing Costs

A

Cost of beginning WIP inventory

+ Costs added to production process this period

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7
Q

Process Costing

A
  1. Find Equivalent Units of Production done during the processing time period
  2. Calculate product cost per unit
    total cost during period/work done
    3.Calculate total cost of units completed and transferred out
  3. Calculate total cost of units remaining at the end of production period (ending WIP inventory)
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8
Q

Formula:

Work done in CURRENT period on BEGINNING WIP inventory

A

Number of physical units x (1 - percent completed last period)

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9
Q

Formula:

Work done in CURRENT period on ENDING WIP inventory

A

Number of physical units x percent completed in current period

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10
Q

Conversion Costs

A

Represents all direct labor and manufacturing overhead input during the period

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11
Q

Formula:

Production Costs per Unit

A

Beginning WIP:
(Direct materials total cost/equivalent. units)
+ (Conversion total cost/equivalent units)
+ Current Period:
(Direct materials total cost/equivalent units)
+ (Conversion cost/equivalent units)

= Total Dollars In

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12
Q

Formula:

Cost Transferred Out

A

Beginning WIP:
Initial direct materials
+ Initial conversion costs
+ (Cost to complete materials per unit x equivalent unit)
+ (Cost to complete conversion x equivalent units)
+ (Started and completed cost per unit x equiv. units)

= Total Cost Transferred Out

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13
Q

Formula:

Cost of Ending WIP

A

(Cost per unit for direct materials x equivalent units)

+ (conversion cost per unit x equivalent units)

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14
Q

Which Cost Allocation Method to Use

A

Traditional- products are the same or processes are very similar
Activity-Based Costing- nature of production process differs substantially across products

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15
Q

Formula:

Activity Rate

A

Cost pool total/number of cost driver events

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16
Q

Variable Costs

A

Remain the same per unit

Increase with number of units

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17
Q

Fixed Costs

A

Remain constant in total

Decrease with number of units

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18
Q

Formula:

Contribution Margin

A

Sales price - costs
or
current sales - break even sales

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19
Q

Formula:

Break Even Point

A

Fixed costs/contribution margin
or
Fixed costs/(sales price - costs)

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20
Q

Formula:

Profit

A 
Sales revenue 
- Variable costs
- Fixed costs
or
(Sales price x units)
- (Variable costs x units)
- Fixed costs
or
Sales revenue
- (Contribution margin ratio x sales revenue) 
- Fixed costs
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21
Q

Formula:

Contribution Margin Ratio

A

Contribution margin/net sales revenue

22
Q

Formula:

Solve for Break Even/Target Income

A

Sales revenue
- Variable costs
- Fixed costs
= 0/Target Income

23
Q

Formula:

Variable Costs

A

Variable cost per unit x number of units
or
Variable cost ratio x sales revenue

24
Q

Formula:

Variable Costs Ratio

A

Variable cost/net sales

25
Q

Formula:

Sales Mix

A

(Fixed costs + Target Income)/Variable cost ratio

=Needed sales

26
Q

Formula:

Determine Sales Volume to Achieve Target Income

A

(Sales price x units)
- (variable cost x units)
- fixed costs
= Target Income

27
Q

Formula:

Return on Sales Revenue

A 
Sales revenue
- Variable costs
- Fixed costs
= percentage x sales revenue
or
Net income/total sales revenue
28
Q

Formula:

Break Even Sales in Units

A

Total fixed costs/
(sales price per unit - variable cost per unit)
= Break Even Sales in Units

29
Q

Formula:

Break Even/Target Income Volume in Units

A

(Fixed costs + Target Income)/Contribution Margin

30
Q

Formula:

Break Even/Target Income In Dollar Amount

A

Sales revenue
- (Variable cost ratio x sales)
- Fixed costs
= Profit

31
Q

Formula:

Degree of Operating Leverage

A

Contribution margin/ operating income

32
Q

Operating Leverage

A

Higher the proportion of fixed cost to variable costs, the faster income increases or decreases with changes in sales volume
high degree = relatively large fixed costs = small changes big impact

33
Q

Formula:

Operating Income Change

A

percent x operating leverage

34
Q

Margin of Safety

A

High margin indicates good cushion; low margin indicates close to break even
only valid on current level of sales

35
Q

Formula:

Margin of Safety

A

In Units:
Current sales in units - break even sales in units
In Dollars
Current sales- Break even sales
In Percentage
(Current sales - break even sales)/current sales
In Clients
(Current sales - break even sales)/cost per client

36
Q

Establishing a Standard Cost System

A
  1. Develop standard costs
  2. Collect actual costs
  3. Compare and identify variances
  4. Journalize actual and standard costs and record variances
  5. Report results
  6. Analyze causes of significant controllable variances
  7. Take action to eliminate variance or revise standard cost
37
Q

Formula:

Materials Price Variance

A

(Standard material price - actual material price)

x quantity purchased or used

38
Q

Formula:

Material Quantity Variance

A

(Standard quantity allowed - actual quantity used)

x standard price

39
Q

Formula:

Standard Quantity Allowed

A

Standard quantity per unit x actual units produced

40
Q

Formula:

Labor Rate Variances

A

(Standard rate - actual rate)
x quantity of labor used/actual hours

(AR-SR)(AH)

41
Q

Formula:

Materials Rate Variance

A

(Standard rate - actual rate)

x quantity used/purchased

42
Q

Formula:

Variable Overhead Spending Variance

A

(Actual rate x standard rate of overhead)

- actual amount spent on variable overhead

43
Q

Formula:

Labor Efficiency Variance

A

(Standard quantity hour - actual quantity hours)
x standard rate

(SH-AH)(SR)

44
Q

Formula:

Materials Efficiency Variance

A

(Standard quantity x actual quantity)

x standard rate

45
Q

Formula:

Variable Overhead Efficiency Variance

A

(Standard hours allowed for actual output - actual hours)

x standard rate

46
Q

Variance Journal Entry

A

Work in Progress Inventory (SHxSR)
Wages Payable (AHxAR)
Labor Rate VAriance (AR-SR)(AH)
Labor Efficiency Rate (SH-AH)(SR)

unfavorable ~ expense = DEBIT
favorable ~ revenue = CREDIT

47
Q

Current Operations Budget

A

Needs of prior budget
+ ending inventory
- beginning inventory

48
Q

Production Budget

A

Sales budget
+ ending finished goods inventory
- beginning finished goods inventory

49
Q

Direct Materials Production Budget

A

Production budget x direct material per unit

50
Q

Direct Materials Purchases Budget

A

Direct materials production budget
+ ending direct materials inventory
- beginning direct materials inventory

51
Q

Differential Costs

A
  • Variable cost
  • Direct fixed cost
  • Opportunity cost
52
Q

Joint Product Cost

A

Joint costs are IRRELEVANT to ADDITIONAL PROCESSING decision pre split off point.

Joint costs are RELEVANT to the decision to INITIALLY PRODUCE AN ARRAY of joint products

Cost and Managerial Accounting (1 decks)

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