MA 3 facile aperto

The selling price of Job 407 assuming a 75% markup can be calculated using the formula: Selling Price = Cost + (Cost * Markup Percentage).

The appeal of using predetermined departmental overhead rates is that they presumably provide a more accurate accounting of the costs caused by jobs, which in turn, should enhance management planning and decision making.

Activity-based costing is an alternative approach to developing multiple predetermined overhead rates. It involves creating overhead rates based on the activities that a company performs, in order to more accurately measure the demands that jobs, products, customers, and other cost objects make on overhead resources.

<p>Job cost sheets are often used to create a balance sheet and income statement for external parties. All of a company’s job cost sheets collectively form a subsidiary ledger.</p> Signup and view all the answers

<p>The purpose of using job cost sheets is to calculate ending inventories and cost of goods sold, as part of the job-order costing system.</p> Signup and view all the answers

<p>The significance of using an activity-based costing system is that it allows managers to more accurately measure the demands that jobs, products, customers, and other cost objects make on overhead resources, leading to improved cost allocation and decision making.</p> Signup and view all the answers

<p>Underapplied overhead occurs when less overhead is applied to production than actually incurred, while overapplied overhead occurs when more is applied.</p> Signup and view all the answers

<p>Job cost sheets provide financial records explaining specific jobs in Work-in-Process, Finished Goods, and Cost of Goods Sold on financial statements.</p> Signup and view all the answers

<p>Variable costing differs from absorption costing by using only variable costs to compute the cost of the product, while absorption costing includes both fixed and variable components.</p> Signup and view all the answers

<p>The predetermined overhead rate, computed at the beginning of each period, accounts for the lack of synchronization between accruing manufacturing overhead and job production.</p> Signup and view all the answers

<p>Job-order costing is also used in service industries like law firms, accounting firms, and medical treatment.</p> Signup and view all the answers

<p>Tracing costs for a job involves directly traceable costs like labor and material, and indirectly traceable manufacturing overhead.</p> Signup and view all the answers

<p>Direct and indirect variable costs.</p> Signup and view all the answers

<p>The difference lies in the treatment of fixed manufacturing overhead, impacting the cost of goods sold and inventory valuation.</p> Signup and view all the answers

<p>Under absorption costing.</p> Signup and view all the answers

<p>They are prepared to compute net operating income, considering sales and production units.</p> Signup and view all the answers

<p>Adding fixed manufacturing overhead deferred in inventory to variable costing net operating income.</p> Signup and view all the answers

<p>The relationship affects net operating income differently because changes in production units also impact net operating income in absorption costing.</p> Signup and view all the answers

<p>Absorption costing includes fixed manufacturing overhead in the cost of the product, while variable costing treats fixed manufacturing overhead as a period expense and only includes variable manufacturing costs in the cost of the product.</p> Signup and view all the answers

<p>Decentralization involves segmenting the overall activity into smaller segments, and managerial accounting provides information by unit and segment to better understand and manage the different parts of the organization.</p> Signup and view all the answers

<p>The segment margin is calculated by subtracting traceable fixed costs from contribution margin, providing a measure of the long-run profitability of a segment.</p> Signup and view all the answers

<p>Common costs should not be allocated to segments, as it distorts decision-making and does not reflect the true impact of each segment on overall profitability.</p> Signup and view all the answers

<p>ABC is a method designed to provide managers with cost information for strategic decisions affecting capacity and variable costs, and it assigns nonmanufacturing and manufacturing costs to products on a cause-and-effect basis.</p> Signup and view all the answers

<p>ABC differs from traditional cost accounting by using numerous overhead cost pools and a more complex allocation scheme, addressing the complexity and product differentiation in addition to volume.</p> Signup and view all the answers

<p>Traditional cost systems rely on direct labor hours and/or machine hours to allocate all overhead costs to products, while ABC systems use unique measures of activity for each cost pool to allocate overhead costs to products.</p> Signup and view all the answers

<p>Key definitions and concepts in ABC include activity (an event that causes the consumption of overhead resources), activity cost pool (a 'cost bucket' for accumulating costs related to a single activity measure), and activity measure (an allocation base in an activity-based costing system).</p> Signup and view all the answers

<p>Characteristics of a successful ABC implementation include strong top management support, linking ABC to how people are evaluated and rewarded, and creating cross-functional teams with intimate knowledge of operations.</p> Signup and view all the answers

<p>The five steps for implementing ABC are (1) defining activities, activity cost pools, and activity measures, (2) assigning costs to cost pools using a first-stage allocation, (3) assigning costs to individual units of product, service, or customer using a second-stage allocation, (4) preparing management reports, and (5) taking action to improve activities and reduce costs.</p> Signup and view all the answers

<p>The two common types of activity measures in ABC are transaction drivers (simple count of the number of times an activity occurs) and duration drivers (a measure of the amount of time needed for an activity).</p> Signup and view all the answers

<p>The 'Other' activity cost pool in ABC is assigned all organization-sustaining costs and unused capacity costs.</p> Signup and view all the answers