ACC 312 FINAL EXAM STUDY GUIDE
Product Costing - Answers - The process of assigning production costs to an
organization's outputs
Product Costing System - Answers - The process of accumulating the costs of a
production process and assigning them to the products and services that constitute the
organization's output
Job Order Costing - Answers - This costing is used by companies with job-shop or
batch-production manufacturing processes. This system assigns costs to distinct
production jobs that are significantly different and then average cost is computed for
each unit of product in each job. Used by firms that produce relatively small numbers of
dissimilar products
Process Costing - Answers - A product-costing system in which production costs are
averaged over a large number of product units. Used by firms that produce large
numbers of nearly identical products
Activity Base - Answers - A measure of an organization's activity that is used as a basis
for specifying cost behavior. It is also used to compute a predetermined overhead rate.
The current trend is to refer to this as a volume-based cost driver
Actual Costing - Answers - A product-costing system in which actual direct material,
direct labor, and actual MOH are added to WIP
Actual Costing - Answers - This costing calculates MOH by Actual Overhead Rate
(calculated at end of the period) * Actual Amount of cost allocation base used each
month
Actual MOH - Answers - The actual costs incurred during an accounting period for
MOH. Includes actual indirect material, indirect labor, and other manufacturing costs
Applied MOH - Answers - The amount of MOH added to WIP during an accounting
period
Bill of Materials - Answers - A list of all the materials needed to manufacture a product
or product component
COGM - Answers - The total cost of direct material, direct labor, and manufacturing
overhead transferred from WIP to Finished Goods Inventory during an accounting
period
,Material Requisition FOrm - Answers - A document used by the production department
supervisor to request the release of raw materials for production
Normal Costing - Answers - A product-costing system in which actual direct materials,
actual direct labor, and applied MOH costs are added to WIP
Normal Costing - Answers - This costing uses budgeted numbers to calculate the
manufacturing overhead rate
Budgeted Overhead Rate (calculated at beginning of the period) * Actual Amount of
cost allocation base used each month
Overapplied Overhead - Answers - The amount by which the period's applied
manufacturing overhead exceeds actual manufacturing overhead
Plantwide Overhead Rate - Answers - An overhead rate calculated by averaging
manufacturing overhead costs for the entire production facility
Predetermined Overhead Rate - Answers - The rate used to apply MOH to WIP,
calculated as:
Estimated MOH / Estimated Amount of Cost Driver
Proration - Answers - The process of allocating underapplied or overapplied overhead
to WIP, Finished Goods Inventory, and COGS
Throughput Time - Answers - The average amount of time required to convert raw
materials into finished goods ready to be shipped to customers
Two Stage Cost Allocation - Answers - A two-step procedure for assigning overhead
costs to products or services produced. In the first stage, all production costs are
assigned to the production departments. In the second stage, the costs that have been
assigned to each production department are applied to the products or services
produced in those departments
Underapplied Overhead - Answers - The amount by which the period's actual MOH
exceeds applied MOH
(Predetermined overhead rate)(quantity of activity required) - Answers - The formula to
apply overhead costs =
Debit - Answers - Actual costs incurred for indirect material, indirect labor, factory rental,
equipment depreciation, utilities, property taxes, and insurance are recorded as a (debit,
credit) too the Manufacturing Overhead account
, COGM - Answers - This cost schedule shows the total manufacturing costs and direct
labor costs
Job Order Costing - Answers - The following production systems would most likely use
this type of costing: batch, job-shop
Process Costing System - Answers - A company that produces a large number of
identical items would most likely use this type of costing system
Job Order Costing and Process Costing - Answers - The two basic sets of procedures
used in product-costing systems are
False - Answers - (T/F) The predetermined overhead rate changes in proportion to the
change in predicted production
Prime Costs - Answers - = Direct Materials + Direct Labor
Activity Based Costing System (ABC) - Answers - A two stage procedure used to assign
overhead costs to products or services produced. In the first stage, significant activities
are identified, and overhead costs are assigned to activity cost pools in accordance with
the way resources are consumed by the activities. In the second stage, the overhead
costs are allocated from each activity cost pool to each product line in proportion to the
amount of the cost driver consumed by the product line
Activity Based Management (ABM) - Answers - Using an activity based costing system
to improve the operations of an organization
Batch Level Activity - Answers - An activity that must be accomplished for each batch of
products rather than for each unit
Bill of Activities - Answers - A complete listing of the activities required for that product
or service to be produced
Consumption Ratio - Answers - The proportion of an activity consumed by a particular
product
Cost Driver - Answers - A characteristic fo an activity or event that results in the
incurrence of costs by that activity or event
Cost Hierarchy - Answers - The classification of activities into levels, such as unit-level,
batch-level, product-sustaining level, and facility-level activities
Customer Profitability Analysis - Answers - Using the concepts of activity- based costing
to determine the activities, costs, and profit associated with serving particular customers
Product Costing - Answers - The process of assigning production costs to an
organization's outputs
Product Costing System - Answers - The process of accumulating the costs of a
production process and assigning them to the products and services that constitute the
organization's output
Job Order Costing - Answers - This costing is used by companies with job-shop or
batch-production manufacturing processes. This system assigns costs to distinct
production jobs that are significantly different and then average cost is computed for
each unit of product in each job. Used by firms that produce relatively small numbers of
dissimilar products
Process Costing - Answers - A product-costing system in which production costs are
averaged over a large number of product units. Used by firms that produce large
numbers of nearly identical products
Activity Base - Answers - A measure of an organization's activity that is used as a basis
for specifying cost behavior. It is also used to compute a predetermined overhead rate.
The current trend is to refer to this as a volume-based cost driver
Actual Costing - Answers - A product-costing system in which actual direct material,
direct labor, and actual MOH are added to WIP
Actual Costing - Answers - This costing calculates MOH by Actual Overhead Rate
(calculated at end of the period) * Actual Amount of cost allocation base used each
month
Actual MOH - Answers - The actual costs incurred during an accounting period for
MOH. Includes actual indirect material, indirect labor, and other manufacturing costs
Applied MOH - Answers - The amount of MOH added to WIP during an accounting
period
Bill of Materials - Answers - A list of all the materials needed to manufacture a product
or product component
COGM - Answers - The total cost of direct material, direct labor, and manufacturing
overhead transferred from WIP to Finished Goods Inventory during an accounting
period
,Material Requisition FOrm - Answers - A document used by the production department
supervisor to request the release of raw materials for production
Normal Costing - Answers - A product-costing system in which actual direct materials,
actual direct labor, and applied MOH costs are added to WIP
Normal Costing - Answers - This costing uses budgeted numbers to calculate the
manufacturing overhead rate
Budgeted Overhead Rate (calculated at beginning of the period) * Actual Amount of
cost allocation base used each month
Overapplied Overhead - Answers - The amount by which the period's applied
manufacturing overhead exceeds actual manufacturing overhead
Plantwide Overhead Rate - Answers - An overhead rate calculated by averaging
manufacturing overhead costs for the entire production facility
Predetermined Overhead Rate - Answers - The rate used to apply MOH to WIP,
calculated as:
Estimated MOH / Estimated Amount of Cost Driver
Proration - Answers - The process of allocating underapplied or overapplied overhead
to WIP, Finished Goods Inventory, and COGS
Throughput Time - Answers - The average amount of time required to convert raw
materials into finished goods ready to be shipped to customers
Two Stage Cost Allocation - Answers - A two-step procedure for assigning overhead
costs to products or services produced. In the first stage, all production costs are
assigned to the production departments. In the second stage, the costs that have been
assigned to each production department are applied to the products or services
produced in those departments
Underapplied Overhead - Answers - The amount by which the period's actual MOH
exceeds applied MOH
(Predetermined overhead rate)(quantity of activity required) - Answers - The formula to
apply overhead costs =
Debit - Answers - Actual costs incurred for indirect material, indirect labor, factory rental,
equipment depreciation, utilities, property taxes, and insurance are recorded as a (debit,
credit) too the Manufacturing Overhead account
, COGM - Answers - This cost schedule shows the total manufacturing costs and direct
labor costs
Job Order Costing - Answers - The following production systems would most likely use
this type of costing: batch, job-shop
Process Costing System - Answers - A company that produces a large number of
identical items would most likely use this type of costing system
Job Order Costing and Process Costing - Answers - The two basic sets of procedures
used in product-costing systems are
False - Answers - (T/F) The predetermined overhead rate changes in proportion to the
change in predicted production
Prime Costs - Answers - = Direct Materials + Direct Labor
Activity Based Costing System (ABC) - Answers - A two stage procedure used to assign
overhead costs to products or services produced. In the first stage, significant activities
are identified, and overhead costs are assigned to activity cost pools in accordance with
the way resources are consumed by the activities. In the second stage, the overhead
costs are allocated from each activity cost pool to each product line in proportion to the
amount of the cost driver consumed by the product line
Activity Based Management (ABM) - Answers - Using an activity based costing system
to improve the operations of an organization
Batch Level Activity - Answers - An activity that must be accomplished for each batch of
products rather than for each unit
Bill of Activities - Answers - A complete listing of the activities required for that product
or service to be produced
Consumption Ratio - Answers - The proportion of an activity consumed by a particular
product
Cost Driver - Answers - A characteristic fo an activity or event that results in the
incurrence of costs by that activity or event
Cost Hierarchy - Answers - The classification of activities into levels, such as unit-level,
batch-level, product-sustaining level, and facility-level activities
Customer Profitability Analysis - Answers - Using the concepts of activity- based costing
to determine the activities, costs, and profit associated with serving particular customers
