ACC 241 UPDATED EXAMINATION SET ALL QUESTIONS
AND ANSWERS SURE A+
✔✔What are the steps of Normal Costing? - ✔✔1. Find estimated MOH and estimated
CD, and determine the est MOH rate
2. Apply/allocate MOH using the est rate, to calculate product costs
3. Determine over/under application of estimates
✔✔Estimated is also called - ✔✔predetermined
✔✔How do we fix over or under applied MOH? - ✔✔-If we under-applied we add the
difference between actual and applied to COGS
-If we over-applied we subtract the difference between actual and applied from COGS
✔✔When is normal costing typically used? - ✔✔-In industries that produce products
similar in nature
-Typically used in job costing
✔✔Job and Process Costing - ✔✔Both work to find the manufacturing cost of one unit,
but the method is chosen based on the manufacturing environment
✔✔Process Costing - ✔✔Product costing used by companies that produce large
quantities of identical units; Each unit should cost the same bc they're identical
Avgs manufacturing costs across all units
✔✔Job Costing - ✔✔Product costing used by companies that produce unique, custom-
ordered products, or small batches of different products
Used when materials, time, and complexity differ per job
Each product/batch is a 'job'
✔✔Hybrid Costing - ✔✔Mix of job and Process costing when neither perfectly reflect the
manufacturing environment
✔✔What records/reports have to match before paying for materials? - ✔✔The purchase
order, receiving report, and the invoice
✔✔Job Cost Record - ✔✔Keeps track of all DM, DL, and MOH used on a 'job'
Also shows # of units produced and records incomplete jobs
✔✔Planning - ✔✔Setting goals and objectives for the company and determining how to
achieve them
, ✔✔Directing - ✔✔Overseeing the company's day-to-day operations
Uses sales and costs information by store, region, and distribution channel to run daily
business operations
✔✔Decision-Making - ✔✔Identifying alternative courses of action and choosing among
them
-Action items
✔✔Controlling - ✔✔Evaluating the results of business operations against the
plan/budgets and making adjustments to keep the company pressing toward its goals
-Feedback loop
✔✔What is the goal of fin accounting? - ✔✔Provide stockholders and creditors with info
to make investment and lending decisions
✔✔Cost Hierarchy - ✔✔Activities sorted into buckets
Unit -> Batch -> Product -> Facility
✔✔Unit Level Costs - ✔✔Costs incurred for every one unit produced
# of units = cost driver
EX: DL, DM, inspection costs, packaging
✔✔Batch Level Costs - ✔✔Cost incurred every time a batch is made
EX: set-up costs, cleaning costs
✔✔Product Level Costs - ✔✔Costs incurred every time a line or range of products is
produced
EX: Product manager salary, patent costs
✔✔Facility Level Costs - ✔✔Any costs that don't fit into unit, product, or batch
EX: Electricity, AC
✔✔What are the types of quality costs? - ✔✔-Prevention
-Appraisal
-Internal Failure
AND ANSWERS SURE A+
✔✔What are the steps of Normal Costing? - ✔✔1. Find estimated MOH and estimated
CD, and determine the est MOH rate
2. Apply/allocate MOH using the est rate, to calculate product costs
3. Determine over/under application of estimates
✔✔Estimated is also called - ✔✔predetermined
✔✔How do we fix over or under applied MOH? - ✔✔-If we under-applied we add the
difference between actual and applied to COGS
-If we over-applied we subtract the difference between actual and applied from COGS
✔✔When is normal costing typically used? - ✔✔-In industries that produce products
similar in nature
-Typically used in job costing
✔✔Job and Process Costing - ✔✔Both work to find the manufacturing cost of one unit,
but the method is chosen based on the manufacturing environment
✔✔Process Costing - ✔✔Product costing used by companies that produce large
quantities of identical units; Each unit should cost the same bc they're identical
Avgs manufacturing costs across all units
✔✔Job Costing - ✔✔Product costing used by companies that produce unique, custom-
ordered products, or small batches of different products
Used when materials, time, and complexity differ per job
Each product/batch is a 'job'
✔✔Hybrid Costing - ✔✔Mix of job and Process costing when neither perfectly reflect the
manufacturing environment
✔✔What records/reports have to match before paying for materials? - ✔✔The purchase
order, receiving report, and the invoice
✔✔Job Cost Record - ✔✔Keeps track of all DM, DL, and MOH used on a 'job'
Also shows # of units produced and records incomplete jobs
✔✔Planning - ✔✔Setting goals and objectives for the company and determining how to
achieve them
, ✔✔Directing - ✔✔Overseeing the company's day-to-day operations
Uses sales and costs information by store, region, and distribution channel to run daily
business operations
✔✔Decision-Making - ✔✔Identifying alternative courses of action and choosing among
them
-Action items
✔✔Controlling - ✔✔Evaluating the results of business operations against the
plan/budgets and making adjustments to keep the company pressing toward its goals
-Feedback loop
✔✔What is the goal of fin accounting? - ✔✔Provide stockholders and creditors with info
to make investment and lending decisions
✔✔Cost Hierarchy - ✔✔Activities sorted into buckets
Unit -> Batch -> Product -> Facility
✔✔Unit Level Costs - ✔✔Costs incurred for every one unit produced
# of units = cost driver
EX: DL, DM, inspection costs, packaging
✔✔Batch Level Costs - ✔✔Cost incurred every time a batch is made
EX: set-up costs, cleaning costs
✔✔Product Level Costs - ✔✔Costs incurred every time a line or range of products is
produced
EX: Product manager salary, patent costs
✔✔Facility Level Costs - ✔✔Any costs that don't fit into unit, product, or batch
EX: Electricity, AC
✔✔What are the types of quality costs? - ✔✔-Prevention
-Appraisal
-Internal Failure
