D216 - Business Law for Accountants Exam Graded A+(100% Verified)

ABC Overhead Cost Allocation involves what? - Overhead allocation based on different activities - Cost Drivers What are the three areas used in process costing? - 1- Work needed to complete beginning WIP 2- Work needed to start & complete units 3- Work put into units not completed (ending WIP) How do you figure out the Equivalent Units of Production? - (Beginning WIP x % needed to complete)+(units started and completed)+(Ending WIPx% completed)= EU of Production Formula to figure out cost per equivalent unit? - Total costs / Eq units - Cost per unit ($800/4000=0.20/unit) What is the definition of job order costing - A method of product costing whereby each job, product, or batch of products is costed seperately (I.E. a table production / How do you compute pre-determined overhead rate? - Forecasted overhead (budgeted overhead) / Forecasted activity level (budgeted direct labor hrs) How do you journal entry an overapplied Mgf ovd - Debit to Mfg Ovhd schedule How do you journal cash purchase of Raw Mat'l? - Credit to cash How do you journal wages pd to workers - Debit amt to WIP schedule (Work not complete and moved to FGI yet)Where is the depreciation of factory equipment journaled? - Debit Mfg ovhd schedule (adding the cost of the depreciation to the Mfg ovhd in order to account for the cost of the machine) How is Adj COGS calculated? FGI-start:300,000 WIP - end: 215,000 Underapplied Mfg ovhd: 40,000 FGI - End: 250,000 WIP - Start: 200,000 COGM: 685,000 - Take the COGM + FGI (beginning) - FGI (ending)= COGS COGS +/- Under/Over applied Mfg Ovhd 685,000+300,000-250,000= 735,000+40,000= 775,000 (Adj COGS) What happens with Debits in the T-account during the WIP process? - They are costs that are put into production during the period. How are cost pools identified in an ABC system? - Through careful analysis of what causes the need for spending for each specific overhead cost.