Podcast
Questions and Answers
Wages paid to production supervisors would be classified as manufacturing overhead.
Wages paid to production supervisors would be classified as manufacturing overhead.
True (A)
Depreciation is always considered a period cost in a manufacturing company.
Depreciation is always considered a period cost in a manufacturing company.
False (B)
Product costs are also known as inventoriable costs.
Product costs are also known as inventoriable costs.
True (A)
Depreciation on equipment a company uses in its selling and administrative activities would be classified as a period cost.
Depreciation on equipment a company uses in its selling and administrative activities would be classified as a period cost.
Direct labor cost is classified as a Conversion cost AND Prime cost.
Direct labor cost is classified as a Conversion cost AND Prime cost.
Prime cost consists of:
Prime cost consists of:
Property taxes on a company's factory building would be classified as a(n):
Property taxes on a company's factory building would be classified as a(n):
Which of the following would most likely NOT be included as manufacturing overhead in a furniture factory?
Which of the following would most likely NOT be included as manufacturing overhead in a furniture factory?
A factory supervisor's wages are classified as:
A factory supervisor's wages are classified as:
Depreciation on company's retail outlets is classified as:
Depreciation on company's retail outlets is classified as:
Management accounting is primarily concerned with providing information to:
Management accounting is primarily concerned with providing information to:
Managers dealing with both short-term and long-term issues is an example of:
Managers dealing with both short-term and long-term issues is an example of:
Managers use whatever information is relevant to the decision even if it does not conform to generally accepted accounting principles. This is related to:
Managers use whatever information is relevant to the decision even if it does not conform to generally accepted accounting principles. This is related to:
Managerial accounting places considerable weight on:
Managerial accounting places considerable weight on:
The primary advantage of managerial accounting is to:
The primary advantage of managerial accounting is to:
The cost of lubricants used to grease a machine in production is an example of:
The cost of lubricants used to grease a machine in production is an example of:
Fixed costs are represented as:
Fixed costs are represented as:
The depreciation on equipment in a manufacturer's headquarters can be classified as a(n):
The depreciation on equipment in a manufacturer's headquarters can be classified as a(n):
The costs of drugs administered by the nursing station to patients would be classified as:
The costs of drugs administered by the nursing station to patients would be classified as:
The controller of ABC Manufacturing considers the cost of salaries paid to personnel in his/her department to be:
The controller of ABC Manufacturing considers the cost of salaries paid to personnel in his/her department to be:
Straight-line depreciation on a computer used in the marketing department would be classified as:
Straight-line depreciation on a computer used in the marketing department would be classified as:
Predetermined manufacturing overhead rate multiplied by actual allocation base is referred to as:
Predetermined manufacturing overhead rate multiplied by actual allocation base is referred to as:
When the actual overhead is more than the overhead allocated to jobs, it is termed:
When the actual overhead is more than the overhead allocated to jobs, it is termed:
If more overhead cost has been applied to jobs than has been incurred during the period, this entry that:
If more overhead cost has been applied to jobs than has been incurred during the period, this entry that:
The field of accounting that focuses on providing information for external decision makers is:
The field of accounting that focuses on providing information for external decision makers is:
The area of accounting that focuses on reporting information to internal users is:
The area of accounting that focuses on reporting information to internal users is:
Variable costs are defined as:
Variable costs are defined as:
Fixed costs are defined as:
Fixed costs are defined as:
Mixed costs consist of:
Mixed costs consist of:
Fixed Cost Formula:
Fixed Cost Formula:
Mixed Cost Formula:
Mixed Cost Formula:
Variable cost formula:
Variable cost formula:
Manufacturing costs are comprised of:
Manufacturing costs are comprised of:
Non-manufacturing costs include:
Non-manufacturing costs include:
Product costs consist of:
Product costs consist of:
Period costs are defined as:
Period costs are defined as:
Direct materials refer to:
Direct materials refer to:
Direct labor involves:
Direct labor involves:
Manufacturing overhead encompasses:
Manufacturing overhead encompasses:
Total cost is calculated as:
Total cost is calculated as:
Cost per unit is defined as:
Cost per unit is defined as:
The Traditional Income Statement format includes:
The Traditional Income Statement format includes:
The Contribution Income Statement Format includes:
The Contribution Income Statement Format includes:
Job Order Costing is described as:
Job Order Costing is described as:
A job order cost system provides:
A job order cost system provides:
A job order cost sheet is a:
A job order cost sheet is a:
A job cost sheet records:
A job cost sheet records:
Cost per unit is a measure of:
Cost per unit is a measure of:
The selling price is defined as:
The selling price is defined as:
POHR stands for:
POHR stands for:
The formula for POHR is:
The formula for POHR is:
Opportunity cost is defined as:
Opportunity cost is defined as:
What is opportunity cost?
What is opportunity cost?
A sunk cost is defined as:
A sunk cost is defined as:
Study Notes
Accounting Concepts
- Wages for production supervisors are classified as manufacturing overhead.
- Depreciation is not always treated as a period cost in manufacturing; context matters.
- Product costs, also known as inventoriable costs, include expenses related directly to product creation.
- Equipment depreciation used in selling and administrative activities is categorized as a period cost.
- Direct labor is classified as both a conversion cost and a prime cost.
Prime Costs
- Prime costs comprise direct materials and direct labor.
Cost Classifications
- Property taxes for factory buildings are classified as product costs.
- The wages of a factory supervisor fall under indirect labor and manufacturing overhead.
- Depreciation on retail outlet equipment is categorized as a period cost.
- Costs of drugs administered to patients are considered direct costs.
Management Accounting
- Management accounting primarily serves the needs of managers within the organization.
- Managers engage in planning both short-term and long-term strategies to align employee efforts with company goals.
- Decision-making in management relies on relevant information, which may not adhere to standard accounting principles.
- Managerial accounting emphasizes nonmonetary data, which can be challenging to quantify.
Cost Behavior
- Costs can be classified as variable (changing directly with production) or fixed (remaining constant regardless of output).
- Mixed costs contain both variable and fixed elements, and they change in total but not proportionately with activities.
Formulas
- Fixed Cost Formula: Total cost minus variable costs.
- Mixed Cost Formula: y = a + bx, where 'a' is the fixed cost and 'b' the variable cost per unit.
- Variable Cost Formula: Total cost minus fixed costs.
Types of Costs
- Manufacturing costs include direct materials, direct labor, and manufacturing overhead.
- Non-manufacturing costs consist of selling and administrative expenses.
- Product costs involve all expenses in acquiring or producing a product.
- Period costs are matched with revenues in a specific period and charged to expense as incurred.
Cost Accounting Methods
- Job order costing is suitable for varied products produced each period.
- A job order cost sheet records the total materials, labor, and overhead costs associated with a specific job.
- Cost per unit reflects a firm's efficiency by dividing total costs by the quantity produced.
Financial Statements
- Traditional Income Statement format shows sales revenue, cost of goods sold, and expenses to arrive at net income.
- Contribution Income Statement format distinguishes variable costs from fixed costs to showcase contribution margins.
Overhead Application
- The predetermined overhead rate (POHR) is established by dividing estimated overhead costs by the base for allocation.
- Underapplied overhead occurs when actual overhead exceeds allocated overhead to jobs.
- Overhead application involves multiplying the predetermined rate by the actual allocation base.
Additional Costs
- Opportunity cost refers to the value of the next best alternative when making a choice.
- Sunk costs are expenses already incurred and cannot be retrieved.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge with these flashcards for ACCT 202. Key concepts include manufacturing overhead, period costs, and product costs. Perfect for reviewing before the exam.
