Managerial Accounting 2302 – Flashcards

Raw Materials . . . . . . . . XXXDr AccountsPayable . . . . . . . . . . XXXCr

Work in Process . . . . . . . XXX Dr Manufacturing Overhead . . XXX Dr Raw Materials . . . . . . . . . . . . . . . XXX

Work in Process . . . . XXXDr Raw Materials . . . . . . . . . . . . . XXXCr

Work in Process . . . . . . . . . .XXX Dr Manufacturing Overhead . . . . XXX Dr Salaries & Wages Payable . . . . . XXXCr

Utilities (heat, water, and power)+Rent on factory equipment+ Miscellaneous factory costs

Finished Goods . . . . . . . . .XXXDr Work in Process . . . . . . . . . . . . .XXXCr

Direct materials: Raw materials Inv beg .. . . . . . XXXDr Add: Purchases of raw materials . .. . . . . . . . . . . . . . . XXXDr Total raw materials available . . . XXXDr Less: Raw materials Inv, end. . . XXXDr Raw materials used production .. XXXDr Less indirect materials included in manufacturing Overhead . . . . . XXXDr _____________________________XXXCr Direct labour . . . . . . . . . . . . . . . . XXXCr Manufacturing overhead applied to work in process . . . . . .. . . . . . . . . . . . XXXCr Total manufacturing costs . . . . . . . . . . . . . . . . . . . . . XXXCr Add: Beginning work in process inventory . . . . . . . . . . . . . . . . . . . XXXCr Deduct: Ending work in process inventory . . . . . . . . . . . . . . . . . . . XXXCr Cost of goods manufactured . . . . . XXXCr

Finished goods inventory, beg. . . . XXXCr Add: Cost of goods manufactured ..XXXCr Goods available for sale . .. . . . . . XXXCr Less: Finished goods inventory end... XXXCr Unadjusted cost of goods sold . . . XXXCr Add: Underapplied overhead . . .. . .XXXCr Adjusted cost of goods sold . . . . . XXXCr

Sales . . . . . . . . . . . . . . . . . . . . . XXXCr Less cost of goods sold . . . . . . . . XXXCr Gross margin . . . . . . . . . . . . . . . XXXCr Less selling and administrative expenses: Salaries expense . . . . . . XXXDr Depreciation expense . . . XXXDr Advertising expense . . .. . XXXDr Other expense . . . . .. . . . XXXDr Total Expenses . . . . . . . . . . . . . . XXXCr Net income . . . . . . . . . . . ... . . . .XXXCr

Estimated total manufacturing overhead cost/Estimated total units in the allocation base= Predetermined overhead rate

Predetermined overhead rate *Actual total units of the allocation base incurred during the period=Total manufacturing overhead applied

Actual total manufacturing overhead cost-Total manufacturing overhead applied=Underapplied (overapplied) overhead

Debited for the cost of materials purchased Credited for direct materials added to Work in Process Credited for indirect materials added to Manufacturing Overhead

Debited for the cost of direct materials, direct labour, and manufacturing overhead applied Credited for the cost of goods manufactured

Credited for direct labour added to Work in Process Credited for indirect labour added to Manufacturing Overhead

Debited for the cost of goods manufactured Credited for the cost of goods sold

Debited for actual overhead costs incurred Underapplied overhead cost Credited for overhead cost applied to Work in Process Overapplied overhead cost

Debited for the cost of goods sold

1. Estimate the level of production for the period. 2. Estimate total amount of the allocation base for the period. 3. Estimate total amount of the allocation base for the period

POHR = Estimated total manufacturingoverhead cost for the coming period/ Estimated total units in theallocation base for the coming period

Raw Materials....Direct Materials Cr Work in Process DEPT A....Direct Materials Dr Work in Process Dept B...................Direct Materials Dr

Salaries and Wages Payable.............................DirectLabor Cr Work in Process Department A .............................DirectMaterials Dr DirectLabor Dr Work in Process Department B .............................DirectMaterials Dr DirectLabor Dr

Manufacturing Overhead.............................Actual Overhead Dr. OverheadApplied to Work inProcess............................ Cr Work in Process Department A..................DirectMaterials Dr DirectLabor Dr AppliedOverhead Dr Work in Process Department B..................DirectMaterials Dr DirectLabor Dr AppliedOverhead Dr

Work in Process Department A..................DirectMaterials Dr DirectLabor Dr AppliedOverhead Dr .....Transferred to Dept. B Cr Work in Process Department B..................DirectMaterials Dr DirectLabor Dr AppliedOverhead Dr Transferred from Dept. A Dr

Work in Process Department B..................DirectMaterials Dr DirectLabor Dr AppliedOverhead Dr Transferred from Dept. A Dr Cost of Goods Manufactured Cr Finished Goods Cost of GoodsManufactured .................Dr

Cost perequivalent unit= Cost of beginningWork in ProcessInventory + Cost added during the period/ Equivalent units of production

As an example of an activity base, consider overage charges on a cell phone bill. The activity base is the number of minutes used above the allowed minutes in the calling plan.

Referring to the cell phone example, the cost per overage minute is constant, for example 45 cents per overage minute.

For example, your cell phone bill probably includes a fixed amount related to the total minutes allowed in your calling plan. The amount does not change when you use more or less allowed minutes.

For example, the fixed cost per minute used decreases as more allowed minutes are used.

Y=a+bX Where: Y = The total Mixed Cost a = The total Fixed cost b = The Varible cost per unit of activity X = The level of activity

Variable cost = Change in cost ÷ Change in activity= ($19,800 - $13,400) ÷ (3,650 - 2,050) = $4.00 Fixed cost element = Total cost - Variable cost element = 19,800 - (4.00 * 3,650) = 5,200

Sales-Cost of Goods Sold (Sales-Net Operating Income+Selling & Administrative Expenses Total)= Gross Margin (Selling & Administrative Expenses Total+Net Operating Income)-Selling & Administrative Expenses Total= Net Operating Income

Sales-Variable Expenses (Sales-Gross Margin+Total Selling & Administrative Expenses Total)= Contribution Margin-Fixed Expenses (Gross Margin+Total Selling & Administrative Expenses-Net Operating Income)=Net Operating Income

Sales= Total Sales/ Items Sold= Per Unit ((Less: Variable Expenses))= {Production, Selling& Admin} = Per Unit Contribution Margin- ((Less: Fixed Expenses)) = Net Operating Income

Items sold over * Per Unit Price = Items over Profit+ Original Profit at Break Even= Total Profit