accounting 16-18 – Flashcards
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Managerial accounting reports useful to managers possess the following
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not always prepared using GAAP, prepared as management needs, and prepared for managers or other company sectors
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Associated with financial accounting
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GAAP, fixed intervals, geared toward external users
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What is the primary criterion for the preparation of managerial accounting reports?
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designed to meet specific need of company's management
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Materials must have which two qualities in order to be classified as direct materials?
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an integral part of the finished product and a significant portion of the total cost of the product
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Which of the following is an example of a factory overhead cost?
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heating/lighting factory, maintaining factory equipment, property tax on factory, insurance on factory buildings, depreciation on factory plant
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Goods that are partially completed by the manufacturer are
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work in process
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A product cost is
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a manufacturing cost: direct materials, direct labor, and factory overhead
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Factory overhead accounts consist of
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depreciation on factory equipment, indirect labor, factory rent, factory utilities, and indirect materials
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A company manufactured 60,000 units of a product at a cost of $550,000. It sold 40,000 units at $10 each. The gross profit is
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$33,200
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To find gross profit:
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sales-cogs sales= (units sold)(cost per unit) cogs=(cost to manufacture/units manufactured)(units sold)
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A work in process t-account
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left column: work in process beginning, direct materials, direct labor, factory overhead, total, work in process end. right column: cost of goods manufactured
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Which of the following are two main types of cost accounting systems for manufacturing operations?
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job order and process cost
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Which of the following would most likely use a job order costing system?
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apparel or guitar manufacturers
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For which of the following businesses would the process cost system be appropriate?
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oil refineries, paper producers, chemical and food processors
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Which of the following is the correct flow of manufacturing costs?
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materials inventory, work in process, finished goods, cost of goods sold
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To find a predetermined overhead rate
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total overhead cost/total machine hours
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Net income
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overhead applied - actual overhead
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journal entries: 700 units of materials purchased at $5.00 a unit; 550 units of materials requisitioned at $5.50 per unit
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materials 3500 --accounts payable 3500 ; work in process 3025 --materials 3025
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Journalize the entry to record the flow of labor costs into production
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work in process --wages payable
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Record the entry for factory overhead incurred during april
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factory overhead --materials --wages payable --utilities payable --accumulated depreciation-factory --small tools --equipment rental
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(b) Amount of factory overhead applied
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(number of hours)(predetermined factory overhead rate)
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(a) Predetermined factory overhead rate
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total factory overhead costs/direct labor hours
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(c) Prepare journal entry to apply factory overhead for April according to the predetermined overhead rate
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work in process --factory overhead
