ACC 241 Exam 2 questions and
answers graded A+
companies w automation often condense costs into 2 categories: - ANS ✔✔direct materials
conversion costs
equivalent units - ANS ✔✔express the amount of work done during a period in terms of fully
completed units of output
Number of physical units * percentage of completion
conversion costs - ANS ✔✔direct labor + MOH
weighted average method of process costing - ANS ✔✔process costing method that combines
any beginning inventory units (and costs) with the current period's units (and costs) to get a
weighted average cost
difference between weighted average method of costing and FIFO costing... - ANS ✔✔only in
the way they treat beginning inventory costs
waste audits - ANS ✔✔studying the steam of waste from company operations to determine
waste that can be avoided and alternative uses for the remaining waste
transferred in costs - ANS ✔✔costs that are transferred in from another process
production cost report - ANS ✔✔summarizes a processing department's operations for a period
, Summarizes 5-step process
cost behavior - ANS ✔✔describes how costs change as volume changes
variable costs - ANS ✔✔costs incurred for every unit of volume
change in direct proportion to volume
cost equation - ANS ✔✔mathematical equation for a straight line that expresses how a cost
behaves
Total variable cost = cost per unit x volume
fixed costs - ANS ✔✔costs that don't change despite wide changes in volume
committed fixed costs - ANS ✔✔fixed costs that are locked in because of previous management
decisions; management has little to no control over these costs in the short run
ex: property taxes
discretionary fixed costs - ANS ✔✔fixed costs that are the result of annual management
decisions; fixed costs that are controllable in the short run.
ex: advertising
mixed costs - ANS ✔✔costs that change, but not in direct proportion to volume. Mixed costs
have both variable cost and fixed cost components.
ex: utilities
y=vx+f
v=volume, x=cost per unit, f=fixed cost (utilities in common areas), y=total costs
answers graded A+
companies w automation often condense costs into 2 categories: - ANS ✔✔direct materials
conversion costs
equivalent units - ANS ✔✔express the amount of work done during a period in terms of fully
completed units of output
Number of physical units * percentage of completion
conversion costs - ANS ✔✔direct labor + MOH
weighted average method of process costing - ANS ✔✔process costing method that combines
any beginning inventory units (and costs) with the current period's units (and costs) to get a
weighted average cost
difference between weighted average method of costing and FIFO costing... - ANS ✔✔only in
the way they treat beginning inventory costs
waste audits - ANS ✔✔studying the steam of waste from company operations to determine
waste that can be avoided and alternative uses for the remaining waste
transferred in costs - ANS ✔✔costs that are transferred in from another process
production cost report - ANS ✔✔summarizes a processing department's operations for a period
, Summarizes 5-step process
cost behavior - ANS ✔✔describes how costs change as volume changes
variable costs - ANS ✔✔costs incurred for every unit of volume
change in direct proportion to volume
cost equation - ANS ✔✔mathematical equation for a straight line that expresses how a cost
behaves
Total variable cost = cost per unit x volume
fixed costs - ANS ✔✔costs that don't change despite wide changes in volume
committed fixed costs - ANS ✔✔fixed costs that are locked in because of previous management
decisions; management has little to no control over these costs in the short run
ex: property taxes
discretionary fixed costs - ANS ✔✔fixed costs that are the result of annual management
decisions; fixed costs that are controllable in the short run.
ex: advertising
mixed costs - ANS ✔✔costs that change, but not in direct proportion to volume. Mixed costs
have both variable cost and fixed cost components.
ex: utilities
y=vx+f
v=volume, x=cost per unit, f=fixed cost (utilities in common areas), y=total costs
