Podcast
Questions and Answers
Which of the following best describes the relationship between product cost and period cost?
Which of the following best describes the relationship between product cost and period cost?
- Period costs are expensed when the production process ends, while product costs are attached to inventory.
- Product costs are expensed when the products are sold, while period costs are expensed in the period they are incurred. (correct)
- Product costs are expensed in the period they are incurred, while period costs are attached to inventory.
- Period costs are associated with manufacturing, while product costs are associated with selling and administration.
If a company is evaluating the cost of a single manufactured product, what costs would be categorized as prime costs?
If a company is evaluating the cost of a single manufactured product, what costs would be categorized as prime costs?
- Direct labor and manufacturing overhead.
- Direct materials and direct labor. (correct)
- Direct materials and manufacturing overhead.
- Direct labor and indirect materials.
Why is manufacturing overhead typically treated as an indirect cost?
Why is manufacturing overhead typically treated as an indirect cost?
- It can be directly traced to individual units of product with ease.
- It cannot be specifically and easily assigned to individual units of output. (correct)
- It includes both direct and indirect costs that are part of the production process.
- It's the labor used to convert raw materials into finished goods.
How would the factory supervisor's salary be classified in relation to the product and the manufacturing division?
How would the factory supervisor's salary be classified in relation to the product and the manufacturing division?
Which of the statement is TRUE regarding fixed and variable costs?
Which of the statement is TRUE regarding fixed and variable costs?
Based on the provided data, what is the total cost of raw materials used in production?
Based on the provided data, what is the total cost of raw materials used in production?
What is the cost of goods manufactured (COGM) for the year, according to the provided data?
What is the cost of goods manufactured (COGM) for the year, according to the provided data?
Given the information, what is the cost of goods sold (COGS) for the year?
Given the information, what is the cost of goods sold (COGS) for the year?
What is the net income for the year based on the data provided?
What is the net income for the year based on the data provided?
Which of the following costs is typically considered a fixed cost?
Which of the following costs is typically considered a fixed cost?
Which of the following costs is typically classified as a variable cost?
Which of the following costs is typically classified as a variable cost?
Naya Ltd. is analyzing costs. Which cost generally remains constant within a range of activity levels, in total?
Naya Ltd. is analyzing costs. Which cost generally remains constant within a range of activity levels, in total?
If Naya Ltd. increases its production volume, which of these costs is most likely to increase proportionally?
If Naya Ltd. increases its production volume, which of these costs is most likely to increase proportionally?
What is the prime cost for the period?
What is the prime cost for the period?
What is the total conversion cost for the period?
What is the total conversion cost for the period?
What is the total production overhead?
What is the total production overhead?
What is the total production cost?
What is the total production cost?
Using the high-low method, what is the variable cost per machine hour?
Using the high-low method, what is the variable cost per machine hour?
What is the estimated monthly fixed power cost, using the high-low method?
What is the estimated monthly fixed power cost, using the high-low method?
Using the mixed cost equation, what is the cost for 3,600 machine hours?
Using the mixed cost equation, what is the cost for 3,600 machine hours?
Flashcards
Product cost
Product cost
Costs that are directly tied to manufacturing a product, including materials and labor.
Period cost
Period cost
Costs that are expensed in the period incurred, not tied to production directly, like selling expenses.
Direct cost
Direct cost
Costs that can be directly attributed to a specific product or service, like direct materials and labor.
Indirect cost
Indirect cost
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Variable cost
Variable cost
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Cost of Raw Materials Used
Cost of Raw Materials Used
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Cost of Goods Manufactured
Cost of Goods Manufactured
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Cost of Goods Sold (COGS)
Cost of Goods Sold (COGS)
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Net Income
Net Income
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Fixed Costs
Fixed Costs
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Direct Labor
Direct Labor
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Manufactured Overhead
Manufactured Overhead
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Prime Cost
Prime Cost
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Conversion Cost
Conversion Cost
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Production Overhead
Production Overhead
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Non-production Overhead
Non-production Overhead
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Total Cost
Total Cost
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High-Low Method
High-Low Method
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Study Notes
Managerial Accounting Tutorial Set 1
- Question 1: Define and exemplify product cost, period cost, prime cost, conversion cost, direct cost, and indirect cost.
- Question 2a: Manufacturing overhead is considered an indirect cost because it's not directly traceable to a specific product.
- Question 2b: Examples of Direct and Indirect Costs:
- Direct labor factory costs (direct)
- Factory supervisor's salary for the product produced (indirect)
- Factory supervisor's salary for the manufacturing division (indirect)
- Manufacturing overhead costs for the products produced (indirect)
- Manufacturing overhead costs for the manufacturing division (indirect)
- Question 3: Disagree with the statement. A variable cost changes per unit of product, while a fixed cost remains constant in total per unit of product.
- Question 4: Data from Hajiashikishiki's accounting records for a year is presented. (Data is given, calculations are needed based on the question)
- Question 5: Classify costs as variable or fixed. (Examples include Rent on building-fixed, Direct labor-variable, Supervisor salaries-fixed, Direct materials-variable, Sales commissions-variable)
- Question 6: Provides information related to selling expenses, direct materials (Component A, Component B), Direct Wages for Department X and Department Y for Naya Ltd.
- Question 7: Alomo Gyata Company's utility costs are provided for several months. The task involves calculating the variable and fixed costs per machine hour. (Data on months, hours, cost and volume in machines is given, calculations needed)
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