variety of video games on a television set. The units are entirely assembled in one production department. All manufacturing costs are incurred at a uniform rate throughout the production process. The following information is available for the month ended March: |Beginning inventory of Work in Process | |$154‚000 | |Manufacturing costs incurred during March: | | | | |
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basic objectives of an organization. A) Only I B) Only II C) Only I and II D) I‚ II‚ and III Answer: A Level: Medium LO: 2 24. Which of following would normally be found on a manufacturing company ’s organization chart? A) the layout of the factory assembly lines B) a list of the materials needed to produce each of the company ’s products C) the informal lines of reporting and communication
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1. Unit based costing first assigns overhead costs to departmental pools and then assigns these costs to products using predetermined overhead rates. a. True b. False ANSWER: True 2. Management information systems can be divided into a unit-based type and activity-based type. a. True b. False ANSWER: True 3. Predetermined overhead rates are calculated at the end of each year using the formula: overhead rate = budgeted annual driver level/budgeted annual driver level. a. True b. False ANSWER:
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Study Sportway Corporation Sportway is a wholesale distributor supplying a wide range of moderately priced sports equipment to large chain stores Products: 60% purchased‚ 40% manufactured The company has a Plastics Department that is currently manufacturing molded fishing tackle boxes Sportway is able to manufacture and sell 8‚000 tackle boxes annually‚ making full use of its direct-labor capacity at available work stations Bo Vonderweidt‚ the production manager‚ wanted to put forward his suggestion
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Traditional Costing Systems • Product Costs – Direct labor – Direct materials – Factory Overhead • Period Costs – Administrative expense – Sales expense Appear on the income statement when goods are sold‚ prior to that time they are stored on the balance sheet as inventory. Appear on the income statement in the period incurred. Traditional Costing Systems • Product Costs – Direct labor – Direct materials – Factory Overhead • Period Costs – Administrative expense – Sales expense Direct labor and direct
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Yes | | D | No | No | | (Points : 5) | Choice A. Choice B. Choice C. Choice D. | 2. (TCO F) Process costing would be appropriate for each of the following except: (Points : 5) | custom furniture manufacturing. oil refining. grain milling. newsprint production. | 3. (TCO F) Assume there was no beginning work in process inventory and the ending work in process inventory is 70% complete with respect to conversion costs. Under
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unit of product? (FALSE) variable would be true 5.) In a manufacturing firm all costs are product costs? (FALSE) 6.) Wages paid to production supervisors would be considered direct labor? (FALSE) 7.) Advertising is a product cost as long as it promotes specific products? (FALSE) 8.) Managerial accounting places less emphasis on non monetary data than financial accounting? (FALSE) 9.) Direct material cost combines with manufacturing overhead cost is known as conversion cost? (FALSE) direct labor 10
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Martin Email Instructor __________________________ ACTIVITY BASED COSTING SYSTEM Two stage process Activity pools Activity categories With & Without ABC example What is Activity based costing (ABC)? Activity based costing (ABC) assigns manufacturing overhead costs to products in a more logical manner than the traditional approach of simply allocating costs on the basis of machine hours. Activity based costing recognizes that the special engineering‚ special testing‚ machine setups‚ and others
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expect to collect during the month of April? A. $286‚500 B. $320‚000 C. $192‚000 D. $94‚500 Solutions: A 270‚000 * 70% = 162‚000 270‚000 * 35% = 94‚500 320‚000 * 60% = 192‚000 94‚000 + 192‚000 = 286‚500 2. Fab Manufacturing Corporation manufactures and sells stainless steel coffee mugs. Expected mug sales at Fab (in units) for the next three months are as follows: Fab likes to maintain a finished goods inventory equal to 30% of the next month’s estimated sales
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Fouch Company makes 30‚000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials 15.70 Direct labor 17.50 Variable manufacturing overhead 4.50 Fixed manufacturing overhead 14.60 Unit product cost 52.30 An outside supplier has offered to sell the company all of these parts it needs for $51.90 a unit. If the company accepts this offer‚ the facilities now being used to make the part could be used to make
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