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1. Bert's Bottles provided the following expense information for July:
Assembly-line workers' wages | $56,800 |
Depreciation on factory equipment | $35,900 |
Caps for bottles | $3,100 |
Plastic bottles | $52,000 |
Reconfiguring the assembly line | $123,200 |
Salaries of salespeople | $63,600 |
Customer support hotline | $12,200 |
Salaries of research scientists | $65,800 |
Delivery expenses | $40,500 |
Customer toll-free order line | $8,400 |
What is the total cost for the production category of the value chain?
A) $461,500
B) $309,300
C) $149,300
D) $147,800
D) $147,800
2. A product support hotline would be considered
A) marketing.
B) distribution.
C) production or purchases.
D) customer service.
D) customer service.
3. Classify each of the following business costs into one of the six value chain elements.
A. cost of a commercial during a TV program
marketing
3. Classify each of the following business costs into one of the six value chain elements.
B. cost of shipping goods to customers
distribution
3. Classify each of the following business costs into one of the six value chain elements.
C. costs associated with repairing products under warranty
customer services
3. Classify each of the following business costs into one of the six value chain elements.
D. costs of developing a new product
R&D
3. Classify each of the following business costs into one of the six value chain elements.
E. cost of making a prototype of a new product
Design
3. Classify each of the following business costs into one of the six value chain elements.
F. cost of labor for machine operator in factory
Production - DL
4.Which statement describes direct materials in a manufacturing setting?
A) Direct materials are used to determine total manufacturing overhead. -Ind mat
B) Direct materials are used to determine total product costs.
C) Direct materials cannot be separately and conveniently traced.
D) Direct materials do not become part of the finished product.
B) Direct materials are used to determine total product costs.
5.Use the correct number to designate each item below. Assume each item is for a manufacturer.
1. direct materials
2. period costs
3. manufacturing overhead
4. direct labor
A) …… rent expense on factory building
3. manufacturing overhead
5.Use the correct number to designate each item below. Assume each item is for a manufacturer.
1. direct materials
2. period costs
3. manufacturing overhead
4. direct labor
B) ________ sales supplies used
2. period costs
5.Use the correct number to designate each item below. Assume each item is for a manufacturer.
1. direct materials
2. period costs
3. manufacturing overhead
4. direct labor
C) ________ factory supplies used
3. manufacturing overhead
5.Use the correct number to designate each item below. Assume each item is for a manufacturer.
1. direct materials
2. period costs
3. manufacturing overhead
4. direct labor
D) ________ indirect materials used
3. manufacturing overhead
5.Use the correct number to designate each item below. Assume each item is for a manufacturer.
1. direct materials
2. period costs
3. manufacturing overhead
4. direct labor
E) ________ wages of assembly line personnel
4. direct labor
5.Use the correct number to designate each item below. Assume each item is for a manufacturer.
1. direct materials
2. period costs
3. manufacturing overhead
4. direct labor
F) _______ cost of primary material used to make product
1. direct materials
5.Use the correct number to designate each item below. Assume each item is for a manufacturer.
1. direct materials
2. period costs
3. manufacturing overhead
4. direct labor
G) _______ depreciation expense on office equipment
2. period costs
5.Use the correct number to designate each item below. Assume each item is for a manufacturer.
1. direct materials
2. period costs
3. manufacturing overhead
4. direct labor
H) ___ rent expense on office facilities
2. period costs
5.Use the correct number to designate each item below. Assume each item is for a manufacturer.
1. direct materials
2. period costs
3. manufacturing overhead
4. direct labor
I) _______ insurance expired on factory equipment
3. manufacturing overhead
5.Use the correct number to designate each item below. Assume each item is for a manufacturer.
1. direct materials
2. period costs
3. manufacturing overhead
4. direct labor
J) _______ utilities incurred in the office
2. period costs
5.Use the correct number to designate each item below. Assume each item is for a manufacturer.
1. direct materials
2. period costs
3. manufacturing overhead
4. direct labor
K) _______ advertising expense
2. period costs
5.Use the correct number to designate each item below. Assume each item is for a manufacturer.
1. direct materials
2. period costs
3. manufacturing overhead
4. direct labor
L) _______ taxes paid on factory building
3. manufacturing overhead
6.Certain materials used in a manufacturing plant cannot be traced to a specific unit. What are these materials called?
A) General materials
B) Direct materials
C) Indirect materials
D) Finished materials
C) Indirect materials
7.Rent on a factory building would be considered to be a ________ cost.
A) product
B) period
C) direct
D) none of the above
A) product
8. State whether each company below would be more likely to use a job costing system or a process costing system.
A) ________ soft drink bottler
Process
8. State whether each company below would be more likely to use a job costing system or a process costing system.
B) ________ yacht builder
Job
8. State whether each company below would be more likely to use a job costing system or a process costing system.
C) ______ hospital
Job
8. State whether each company below would be more likely to use a job costing system or a process costing system.
D) ________ printing firm
Both
8. State whether each company below would be more likely to use a job costing system or a process costing system.
E) ________ flour mill
Process
9. True or False: For a manufacturing system, inventory flows from raw materials inventory to work in process inventory to finished goods inventory.
True
10.True or False: A job cost record is a document that accumulates direct materials costs, direct labor costs and manufacturing overhead costs assigned to each individual job.
True
11.True or False: Manufacturing overhead may include depreciation on the factory plant and equipment, utilities to run the plant, property taxes and insurance on the plant, and salaries of plant janitors.
True
12.Shoe Biz allocates overhead based on machine hours. Selected data for the most recent year follow.
Estimated manufacturing overhead cost | $235,200 |
Actual manufacturing overhead cost | $244,300 |
Estimated machine hours | 20,900 |
Actual machine hours | 22,700 |
The estimates were made as of the beginning of the year, while the actual results were for the entire year.
The predetermined manufacturing overhead rate per machine hour is closest to ________. (Round your answer to the nearest cent.)
A) $10.36
B) $11.25
C) $10.76
D) $11.69
B) $11.25
13.Cabinets Unlimited uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two departments: Assembly and Sanding. The Assembly Department uses a departmental overhead rate of $50 per machine hour, while the Sanding Department uses a departmental overhead rate of $25 per direct labor hour. Job 603 used the following direct labor hours and machine hours in the two departments:
Actual results | Assembly Department | Sanding Department |
Direct labor hours used | 9 | 7 |
Machine hours used | 10 | 8 |
The cost for direct labor is $30 per direct labor hour and the cost of the direct materials used by Job 603 is $1,500.
How much manufacturing overhead would be allocated to Job 603 using the departmental overhead rates?
A) $675
B) $530
C)$920 D) $480
A) $675
14.Cabinets Unlimited uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two departments: Assembly and Sanding. The Assembly Department uses a departmental overhead rate of $45 per machine hour, while the Sanding Department uses a departmental overhead rate of $25 per direct labor hour. Job 542 used the following direct labor hours and machine hours in the two departments:
Actual results | Assembly Department | Sanding Department |
Direct labor hours used | 7 | 3 |
Machine hours used | 11 | 5 |
The cost for direct labor is $35 per direct labor hour and the cost of the direct materials used by Job 542 is $1,200.
What was the total cost of Job 542 if Lucas Industries used the departmental overhead rates to allocate manufacturing overhead?
A) $1,585
B) $2,055
C) $2,120
D) $1,550
C) $2,120
15.Relax, Don't Do It Company manufactures lawn chairs using an activity-based costing system to allocate all manufacturing conversion costs. The following information is provided for the month of June:
Activity | Estimated Indirect Activity Costs | Allocation Base | Estimated Quantity of Allocation Base |
Materials handling | $15,000 | Number of parts | 5,600 parts = $2.68 |
Assembling | $15,500 | Number of parts | 5,600 parts= $2.77 |
Packaging | $5,300 | Number of lawn chairs | 700 lawn chairs = $7.57 |
Each lawn chair consists of 8 parts; the total direct materials cost per lawn chair is $13.
What is the total cost of materials handling and assembling for each lawn chair? (Round intermediate and the final answer to the nearest cent.)
A) $64.14
B) $43.57
C) $35.14
D) $22.14
B) $43.57
16. What is the total manufacturing cost per lawn chair? Compute:
Ch1-1 A manager has how many primary responsibilities?
3
Ch1-3 Name all 3 of the primary responsibilities required by a manager.
Planning, directing, and controlling
Ch1-4 Cost accounting is also referred to as ____________ accounting.
managerial
Ch1-5 The primary responsibility of evaluating results of business ops vs the plan and then making adjustments is _________.
controlling
Ch1-6 Setting goals and objectives for the company and determining how to achieve them is ______.
planning
Ch1-7 Overseeing the company’s day to day operations is ____
directing
Ch1-8 Financial vs Managerial: Information is required by an outside group/government agency such as the SEC.
Financial
Ch1-9 Financial vs Manag: Independent CPAs audit and verify information.
Financial
Ch1-10 Fin vs Manag: Reports are prepared as needed by managers
Managerial
Ch1-11 Fin vs Manag: A report is prepared in segments, such as products and/or customers.
Managerial
Ch1-12 Fin vs Manag: The reports are used by internal management.
Managerial
Ch1-13 Fin vs Manag: The information must be relevant.
Managerial
Ch1-14 Business acumen means…
understanding business situations/ knowledge
Ch1-15 The controller reports to the
CFO
Ch1-16 The CFO reports to the
CEO
Ch1-17 The stockholders elect a ________ to oversee the corporation.
Board of Directors
Ch1-18 Employees representing various functions of the company are _________ teams.
cross functional
Ch1-19 Ethic Std: Disclose all relevant information and communicate fairly.
Credibility
Ch1-20 Ethic Std: Abstain from engaging in or supporting any activity that might discredit the profession.
Integrity
Ch1-21 Ethic Std: Avoid conflicts of interest and communicate any apparent conflicts of interest.
Integrity
Ch1-22 Ethic Std: Continue to develop your knowledge and skills
Competence
Ch1-23 Ethic Std: Refrain from using or giving out information to your friends or family for unethical or illegal advantage.
Confidentiality
Ch1-24 Ethic Std: Joe, who is an excellent cost accountant, added marketing and sales expenses to Cost of Goods Sold on the income statement.
Competence
Ch1-25 Ethic Std: Jackie does not disclose to her employer that her brother and dad are co-owners of a company that is bidding on a major contract with her company.
Integrity
Ch1-26 Ethic Std: Jenni changed the way MOH is allocated to divisions, from DL hours to DL cost, for the better of the company—however she failed to note this change or disclose this change to all other employees and the management.
Credibility
Ch1-27: Ethic Std: provide decision support information and recommendations that are accurate, clear, concise and timely.
Competence
Ch1-28: The goal of producing near perfection with less than 3.4 defects per one million opportunities is called
Six Sigma
Ch1-29: The ability to meet the needs of the present without compromising the ability of future generations to meet their own needs.
Sustainability
Ch1-30: This was enacted in 2002 to restore trust in publicly traded corporations, their management, their fin stmts and their auditors.
SOX = Sarbannes Oxley Act
Ch1-31: People, Planet or Profit: In 2015-PepsiCo increased its dividend to shareholders
Profit or Economic
Ch1-32: PepsiCo strengthened its Responsible Advertising to Children policy.
People = social
Ch1-33: In 2014, 93% of PepsiCo’s waste was not sent to landfills.
Planet = environmental
Ch2-1: The Value Chain: List the 6 activities in the chain in the correct order.
R&D, Design, Production/purchases, Marketing & Sales, Distribution, Customer Service
Ch2-2: Support provided after the sale (warranty).
Customer service
Ch2-3: Promotion and advertising of products or services.
Marketing/ sales
Ch2-4: The process for new and/or improved products or services.
R&D
Ch2-5: Resources used to mfg a finished product.
Production
Ch2-6: This cost can be traced to the cost object.
Direct cost
Ch2-7: This cost related to the cost object but cannot be specifically traced to it.
Indirect cost
Ch2-8: Product costs appear on which financial statement and in which account.
Product not sold = Finished Goods Inventory on Balance Sheet
Product is Sold = Cost of Goods Sold on Income Statement
Ch2-9: Period costs appear on which financial statement and are classified as?
Income statement as operating expenses
Ch2-10: MOH includes what 3 items and give 4 examples of each one.
Indirect materials: paint, glue, nut, tape
Indirect labor: plant supervisor, plant forklift driver, plant maintenance, plant security
Indirect Other Manufacturing Costs: plant rent, plant insurance, plant depreciation, plant taxes
Ch2-14: Prime costs include.
Direct materials plus Direct labor
Ch2-15: Conversion costs are.
Direct Labor and Manufacturing Overhead cost
Ch2-16: Operating income is simply the company’s earnings BEFORE
Interest and income taxes
Ch2-17: Bar coding is used in which inventory system.
Perpetual
Ch2-18: Name the 3 Inventory accounts a manufacturer’s product costs flow through before they become part of COGS.
Raw materials inventory, WIP inventory, Finished Goods Inventory
Ch2-19: Mfg cost behavior: Direct materials are normally fixed, variable or a mixture of both?
Variable
Ch2-20: Mfg cost behavior: Direct labor is normally fixed, Variable or a mixture of both?
Variable
Ch2-21: Mfg cost behavior: MOH is normally fixed, variable or a mixture of both?
Both
Ch3-1: Which costing system is known as the ‘simple system’? (ABC or Job)
Job costing system
Ch3-2: Mass producing similar units through a series of uniform production steps is known as
Process costing
Ch3-3: List 2 elements of the products produced in a JOB costing system.
Individual units or small batches and Unique items
Ch3-4: Term: A list of all of the raw/direct materials needed to mfg a job.
BOM = Bill of materials
Ch3-5: Term: Products normally kept on hand in order to quickly fill customer orders.
Stock inventory
Ch3-6: Term: Written or electronic document listing the quantity and cost of all units used and received, and the balance currently in stock.
Raw materials record
Ch3-7: Term: Written or electronic document requesting specific materials be transferred to the production floor.
Materials requisition
Ch3-8: Term: Written or electronic document authorizing the purchase of specific raw materials from a specific supplier.
Purchases order
Ch3-10: Term: This report is typically a duplicate of the PO without the quantity pre-listed on the form.
Receiving Report
Ch3-11: Term: Written or electronic document indicating the quantity and types of inventory that will be mfged during a specified time frame.
Production schedule
Ch3-12: (over or under) Amount of MOH allocated to jobs is less than the amount of MOH actually incurred.
Under
Ch3-13: Written or electronic document that lists DM, DL and MOH assigned to each job.
Job cost record
Ch3-14: T/F – A cost-plus price is determined by adding a markup to the cost.
True
Ch3-15: T/F – Job cost information is not useful for assessing the profitability of different products.
True
Note
Flashcard