ACCY 201 Midterm 2 || QUESTIONS WITH 100%
SOLVED SOLUTIONS!!
managerial accounting correct answers accounting used to provide information and analyses
to managers inside the organization to assist them in decision making
-planning, controlling, decision-making
manufactoring costs correct answers direct materials
direct labor
manufactoring overhead
non manufactoring costs correct answers selling costs
administrative costs
direct costs correct answers costs that can be easily and accurately traced to a cost object
indirect costs correct answers Costs that cannot be easily and accurately traced to a cost
object.
manufacturing overhead includes what correct answers indirect costs
factory supervision salary
depreciation
indirect labor
utilities
factory
-anything that is tied to the factory and in it
prime costs correct answers Direct Materials + Direct Labor
conversion costs correct answers Direct Labor + Manufacturing Overhead
product costs correct answers direct materials, direct labor, manufacturing overhead
-flow through three inventory accounts on the balance sheet first and remain as inventory
-only recorded as an expense (COGS) when the completed goods are sold
-not necessarily expensed in the same period as they are incurred (remember the 'matching
principle!')
period costs correct answers selling and administrative costs
-DO NOT flow through inventory accounts on the balance sheet
-NOT included in COGS when sale occurs.
-immediately expensed in the period incurred
fixed costs correct answers total fixed costs will always remain constant
per unit fixed costs will change
variable cost correct answers total variable costs will change
per unit variable costs will always remain constant
, mixed costs correct answers Costs that contain both a variable- and a fixed-cost element and
change in total but not proportionately with changes in the activity level.
differential costs correct answers costs that change in response to a particular course of action
sunk costs correct answers costs that have already been incurred and cannot be recovered
-should not factor into decision making
opportunity cost correct answers the most desirable alternative given up as the result of a
decision
job order costing correct answers used when special order
-customized production
-distinct/unique product or service
-unit costs assigned to each specific job
-ex: aircraft manufacturer, greeting cards, wedding invites, accounting or law firm
process costing correct answers used when mass production
-homogeneous product or service
-unit costs assigned by department
-ex: cereal, soda, paper
similarities between job order and process costing correct answers -Both systems assign
material, labor, and overhead costs to products and they provide a mechanism for computing
unit product costs.
-Both systems use the same manufacturing accounts, including Manufacturing Overhead,
Raw Materials, Work in Process, and Finished Goods.
-The flow of costs through the manufacturing accounts is basically the same in both systems.
predetermined overhead rate correct answers computed before the period begins
cost driver correct answers factor that causes overhead costs
-machine hours, bed occupied, computer time
allocation base correct answers A measure of activity such as direct labor-hours or machine-
hours that is used to assign costs to cost objects.
MOH applied to job correct answers predetermined overhead rate x amount of allocation
based incurred by specific job
what if applied MOH does not equal actual MOH correct answers -Predetermined MOH rate
is based on estimates made BEFORE the period.
-Typically, these estimates do not match actual MOH at the end of the year
-Must make an adjustment to COGS to reflect this difference
-Re-evaluate the predetermined MOH rate for the next period
why do we need to assign costs to jobs correct answers -Planning and decision making (set
price, production/ sales plans)
-If we didn't accurately assign costs to jobs (and units) this would adversely affect planning
and decision making
SOLVED SOLUTIONS!!
managerial accounting correct answers accounting used to provide information and analyses
to managers inside the organization to assist them in decision making
-planning, controlling, decision-making
manufactoring costs correct answers direct materials
direct labor
manufactoring overhead
non manufactoring costs correct answers selling costs
administrative costs
direct costs correct answers costs that can be easily and accurately traced to a cost object
indirect costs correct answers Costs that cannot be easily and accurately traced to a cost
object.
manufacturing overhead includes what correct answers indirect costs
factory supervision salary
depreciation
indirect labor
utilities
factory
-anything that is tied to the factory and in it
prime costs correct answers Direct Materials + Direct Labor
conversion costs correct answers Direct Labor + Manufacturing Overhead
product costs correct answers direct materials, direct labor, manufacturing overhead
-flow through three inventory accounts on the balance sheet first and remain as inventory
-only recorded as an expense (COGS) when the completed goods are sold
-not necessarily expensed in the same period as they are incurred (remember the 'matching
principle!')
period costs correct answers selling and administrative costs
-DO NOT flow through inventory accounts on the balance sheet
-NOT included in COGS when sale occurs.
-immediately expensed in the period incurred
fixed costs correct answers total fixed costs will always remain constant
per unit fixed costs will change
variable cost correct answers total variable costs will change
per unit variable costs will always remain constant
, mixed costs correct answers Costs that contain both a variable- and a fixed-cost element and
change in total but not proportionately with changes in the activity level.
differential costs correct answers costs that change in response to a particular course of action
sunk costs correct answers costs that have already been incurred and cannot be recovered
-should not factor into decision making
opportunity cost correct answers the most desirable alternative given up as the result of a
decision
job order costing correct answers used when special order
-customized production
-distinct/unique product or service
-unit costs assigned to each specific job
-ex: aircraft manufacturer, greeting cards, wedding invites, accounting or law firm
process costing correct answers used when mass production
-homogeneous product or service
-unit costs assigned by department
-ex: cereal, soda, paper
similarities between job order and process costing correct answers -Both systems assign
material, labor, and overhead costs to products and they provide a mechanism for computing
unit product costs.
-Both systems use the same manufacturing accounts, including Manufacturing Overhead,
Raw Materials, Work in Process, and Finished Goods.
-The flow of costs through the manufacturing accounts is basically the same in both systems.
predetermined overhead rate correct answers computed before the period begins
cost driver correct answers factor that causes overhead costs
-machine hours, bed occupied, computer time
allocation base correct answers A measure of activity such as direct labor-hours or machine-
hours that is used to assign costs to cost objects.
MOH applied to job correct answers predetermined overhead rate x amount of allocation
based incurred by specific job
what if applied MOH does not equal actual MOH correct answers -Predetermined MOH rate
is based on estimates made BEFORE the period.
-Typically, these estimates do not match actual MOH at the end of the year
-Must make an adjustment to COGS to reflect this difference
-Re-evaluate the predetermined MOH rate for the next period
why do we need to assign costs to jobs correct answers -Planning and decision making (set
price, production/ sales plans)
-If we didn't accurately assign costs to jobs (and units) this would adversely affect planning
and decision making
