Kapitel 3
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Questions and Answers

What is the main consideration when selecting distribution criteria for costs?

  • The complexity of measurement involved
  • The total amount of costs being distributed
  • The logic and appropriateness of the selected criterion (correct)
  • The uniformity of cost classes across all companies

Which of the following is NOT mentioned as a factor for distributing costs?

  • Personnel assigned to the center or place
  • Type of product manufactured (correct)
  • Installed power
  • Square meters of occupied surface

In what way can electrical energy consumption be measured for cost distribution?

  • Calculating based on the average power of devices only
  • Estimating based on previous month’s bill
  • Using a flat rate for each department
  • Installing counters in each location to measure usage (correct)

What is a potential downside to measuring consumption directly for cost distribution?

<p>It can lead to high costs and complexity (B)</p> Signup and view all the answers

Which distribution criterion is suggested for labor costs?

<p>Direct measurement based on staffed hours per person (C)</p> Signup and view all the answers

How should amortization and equipment costs be allocated?

<p>Based on the usage and service requirements (C)</p> Signup and view all the answers

Why might it be impractical to always measure consumption directly?

<p>Due to the cost involved in setting up such measurements (B)</p> Signup and view all the answers

Which of the following best describes the relationship between cost distribution criteria and company practices?

<p>Cost distribution can vary significantly between companies depending on their practices (B)</p> Signup and view all the answers

What is the primary purpose of cost statistics in accounting?

<p>To simplify and facilitate information (D)</p> Signup and view all the answers

What are internal statistics primarily aimed at?

<p>Checking control purposes and calculations (B)</p> Signup and view all the answers

Which of the following best describes economic statistics?

<p>Statistics expressed solely in monetary units (B)</p> Signup and view all the answers

What type of statistics would be labeled as 'economic-technical'?

<p>Statistics expressed in both physical and monetary units (D)</p> Signup and view all the answers

What role do auxiliary places play in cost statistics?

<p>They provide additional support in cost allocation (C)</p> Signup and view all the answers

What is the main characteristic of internal statistics?

<p>They usually consist of double-entry tables (D)</p> Signup and view all the answers

The liquidation of cost statistics mainly involves what?

<p>Distributing different types of costs (C)</p> Signup and view all the answers

How can different types of internal statistics be classified?

<p>By the units they are expressed in (B)</p> Signup and view all the answers

What is the first step in preparing the components for terrazzo production?

<p>Weighing the various components (A)</p> Signup and view all the answers

Which equipment is used to transport materials from the storage area?

<p>Pneumatic wheel loaders (D)</p> Signup and view all the answers

What process occurs after the components are mixed in concrete mixers?

<p>Pressing of the mixtures (A)</p> Signup and view all the answers

What is responsible for removing moisture from the terrazzo during production?

<p>Electrical panels in the drying section (C)</p> Signup and view all the answers

In which section is the terrazzo product finished?

<p>Polishing section (D)</p> Signup and view all the answers

How is the energy necessary for the production process obtained?

<p>Using an electric generator owned by the company (C)</p> Signup and view all the answers

What happens to the terrazzo after it has been polished?

<p>It is packaged and transferred to the warehouse (D)</p> Signup and view all the answers

Which machinery maintenance aspect is mentioned in the production process?

<p>Conservation and maintenance department (D)</p> Signup and view all the answers

What types of costs are primarily distributed in the liquidation process?

<p>Indirect costs, including selected direct costs (A)</p> Signup and view all the answers

Which phase involves the conversion of physical units into monetary units?

<p>Economic valuation phase (B)</p> Signup and view all the answers

What is the outcome of the distribution phase in the cost liquidation process?

<p>Generating primary or autonomous costs for cost centers (D)</p> Signup and view all the answers

Which unit of measurement is NOT typically used in the physical measurement phase?

<p>Financial dollars (A)</p> Signup and view all the answers

What is the primary purpose of the economic valuation phase?

<p>To convert physical consumption measurements into monetary terms (D)</p> Signup and view all the answers

What is NOT a phase involved in the cost liquidation process?

<p>Financial speculation (A)</p> Signup and view all the answers

The final phase of the liquidation process is primarily concerned with:

<p>Redistributing costs among various cost centers (A)</p> Signup and view all the answers

How are direct costs treated in the liquidation process?

<p>They may be distributed if required by characteristics. (C)</p> Signup and view all the answers

What does the equation CT 1 = C 1 + 20% CT 2 represent?

<p>The total cost of section 1 accounting for its own costs and a portion of section 2's costs. (A)</p> Signup and view all the answers

In the context of reciprocal relationships, what does the term 'self-consumption' refer to?

<p>The use of resources by one section to repair its own equipment. (B)</p> Signup and view all the answers

What is the primary purpose of incorporating self-consumption into cost equations?

<p>To accurately represent all costs incurred within each section. (B)</p> Signup and view all the answers

Which of the following best describes the structure represented by the generalization of 'n' reciprocal places?

<p>It demonstrates how various sections influence each other's total costs reciprocally. (D)</p> Signup and view all the answers

What is the main component represented by 'C' in the equations?

<p>Intermediate costs related to a specific cost section. (A)</p> Signup and view all the answers

Which of the following represents a correct understanding of the involvement of percentages in cost equations?

<p>Percentages indicate the amount each section must contribute to the total costs of another section. (D)</p> Signup and view all the answers

What would happen if the percentages in the cost equations were increased?

<p>The total costs for each section would increase accordingly. (C)</p> Signup and view all the answers

What does the term 'CT n' represent in the provided equations?

<p>The total costs associated with section 'n'. (B)</p> Signup and view all the answers

What does CT represent in the cost calculations?

<p>Total cost of the main place (D)</p> Signup and view all the answers

In cases where only an auxiliary service exists to main places, what constitutes the total cost?

<p>Sum of primary and additional costs from auxiliaries (A)</p> Signup and view all the answers

What is the formula used to calculate secondary cost Cs for main section A?

<p>Cs A = t A1 CT 1 + t A2 CT 2 (B)</p> Signup and view all the answers

In which scenario is the cost of main sections calculated without reciprocal benefits?

<p>When there are auxiliary services to auxiliary and main (C)</p> Signup and view all the answers

What is required to calculate the total cost (CT) in complex cases?

<p>Matrix approaches for settlements (C)</p> Signup and view all the answers

Which of the following is part of the formula for total cost CT of a main section?

<p>Primary cost Cp along with adjustments from auxiliaries (C)</p> Signup and view all the answers

What is the primary cost represented as in the equations provided?

<p>Cp (B)</p> Signup and view all the answers

What aspect complicates the calculation of total costs in reciprocal auxiliaries?

<p>Interrelation of assignments and their costs (B)</p> Signup and view all the answers

Flashcards

Weighing and Proportioning

The process of determining the precise proportions of each component in a product, based on weighings, to achieve a specific formula.

Forklift

A mechanical device used to lift and move heavy materials, particularly in loading and unloading operations.

Conveyor Belt System

A system of interconnected conveyor belts used to move materials from one point to another in a manufacturing process.

Concrete Mixers

Specialized rotating equipment used to mix concrete and other construction materials.

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Drying Section

A process that removes moisture from a product, typically using electrical panels that generate heat.

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Warehouse of Finished Products

A section in a manufacturing process where finished products are stored before distribution.

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Conservation and Maintenance Department

The area within a manufacturing facility dedicated to maintaining the operational efficiency of machinery.

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Polishing Section

The process of smoothing, refining, and finishing a product surface, often using specialized machinery.

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Cost Allocation

The process of allocating costs to the relevant production areas or departments, based on their consumption.

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Cost Statistics

A document used to track and distribute costs across different production areas.

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Cost Places

Areas where production activities take place.

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Auxiliary Cost Places

Production areas that provide support to the main production areas.

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Main Cost Places

Production areas that directly contribute to the final product.

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Technical Statistics

Internal tables used to track cost data in physical units like kilograms or liters.

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Economic Statistics

Internal tables used to track cost data in monetary units like dollars or euros.

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Economic-Technical Statistics

Internal tables that combine both physical and monetary unit data to provide a comprehensive cost picture.

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Direct Costs

Costs that are directly linked to a specific product or service. Examples include raw materials, direct labor, and manufacturing overhead directly related to production.

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Indirect Costs

Costs that are indirectly related to a specific product or service, but support the overall business operations. Examples include rent, administrative salaries, and utilities.

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Physical Measurement

The first step in cost allocation. The physical units of indirect cost consumption are measured to determine the actual usage.

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Economic Valuation

The second step in cost allocation. Determining the monetary value of the physical units consumed based on their price.

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Distribution

The third step in cost allocation. Assigning the calculated costs to specific cost centers or departments based on their usage.

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Redistribution

The last step in cost allocation. Further refining the cost allocations by analyzing the final cost per department and adjusting for any discrepancies or inconsistencies.

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Cost Centers

A cost center that represents a specific activity or department within a company. They are used to track and allocate costs.

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Cost Distribution

The process of allocating costs from different cost categories to specific locations within a company, based on how these locations use resources like floor space, personnel, or energy.

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Distribution Criterion

The method used to distribute costs to cost places, which can include factors like square footage occupied, number of employees assigned, or energy consumed.

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Cost Class

A particular category of costs incurred by a company, such as labor, rent, or utilities.

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Labor Distribution

The process of assigning labor costs to specific cost places based on where employees spend their time working. This often involves tracking the hours each employee works in different areas.

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Equipment Cost Distribution

The allocation of depreciation and other equipment costs to cost places based on how much equipment is used in each location.

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External Service Distribution

Distributing the cost of external services like repairs or maintenance to cost places based on where the service is performed.

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Electrical Energy Distribution

The process of allocating electricity costs to cost places by accurately measuring how much electricity each location consumes, which can be done using individual meters or by estimating consumption based on equipment power and usage hours.

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Total Cost (CT)

Costs incurred in a production area, including both direct and indirect costs.

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Intermediate Cost (C)

Costs incurred in a production area, excluding any costs due to reciprocal relationships.

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Transfer Percentage (t)

The percentage of cost transferred from one production place to another due to reciprocal relationships.

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System of Equations for Reciprocal Places

A system of equations used to calculate the total cost of each production area when reciprocal relationships exist.

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Reciprocal Places

Production areas that rely on each other for their services, creating a circular flow of costs.

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Self-Consumption

A situation where a production area consumes a portion of its own output or services.

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Total Cost of a Main Cost Place

The total cost of a main cost place is calculated by adding its primary cost to the secondary cost. The primary cost is the cost directly incurred by the main cost place, while the secondary cost is the part of the costs of auxiliary cost places allocated to the main cost place.

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Secondary Cost

The cost of auxiliary cost places is allocated to main cost places based on the level of service they receive. This allocation is called the "secondary cost".

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Primary Cost

The cost of a main cost place that is independent of any auxiliary cost places is called the "primary cost".

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Total Cost

The cost of a main cost place includes both its primary cost and the secondary cost it receives from auxiliary cost places.

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Methods for Allocating Costs

Different methods exist for allocating costs between auxiliary cost places, depending on the complexity of their interrelationships.

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Study Notes

Management Accounting: Cost Centers and Classes

  • Cost centers are locations of activity, used for accurate identification of functions and responsibilities.
  • Cost centers are basic units where cost elements are transformed into cost carriers.
  • Cost centers can be categorized as main or auxiliary.
  • Main cost centers directly participate in the value creation of the product.
  • Auxiliary cost centers do not directly participate but support the primary activity, such as maintenance, repairs, or electricity.

Main Cost Centers

  • Procurement/Purchasing section manages supplies and materials.
  • Transformation/Production section encompasses activities related to the production process.
  • Sales section handles product distribution, billing, and sales administration.

Auxiliary Cost Centers

  • These support main cost centers.
  • Examples include maintenance, repair, and conservation services.
  • Electric generators, and other auxiliary services fall into this category.

Cost Statistics

  • Cost statistics, or distribution charts, are used for simple and complex cost distributions.
  • Internal statistics help with information and calculation validation.
  • Cost accounting often uses physical and monetary units in its calculations.

Distribution and Redistribution of Costs

  • The distribution phase involves assigning costs to specific cost centers.
  • The redistribution phase distributes auxiliary costs to corresponding primary locations.
  • The process considers direct and indirect costs.

Types of Auxiliary Centers

  • Common auxiliaries transfer costs to other auxiliaries or none/one main place.
  • Reciprocal auxiliaries transfer costs to more than one cost center.

Examples of Cost Allocation Methods

  • Providing allocations based on the surface area of the site.
  • Using allocation based on the number of employees working in the location/center.
  • Using allocation based on consumption (e.g., electrical usage).

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Lesson 3: The Cost Places - Liquidation of the Cost Statistics 2021 PDF

Description

Dive into the essentials of cost centers in management accounting. This quiz covers the distinctions between main and auxiliary cost centers, highlighting their roles in value creation and operational support. Test your understanding of the various sections involved in procurement, production, and maintenance.

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