Terms
DM, DL, Factory (or manufacturing) OH
Cost of goods manufactured= _____ + _____ - _____
COGM= Beginning WIP Inventory + Total Manufacturing Costs - Ending WIP inventory
True or false: The main purpose of both financial and managerial accounting is similar in that both aim to provide relevant information to its users.
True
What are Prime & Conversion Costs?
Prime Costs: DM + DL
Conversion Costs: DL + Factory OH
A company incurred the following costs: $6,000 for indirect labor; $26,000 for direct labor; $2,500 for utilities for the factory building; $10,300 for factory equipment depreciation; $8,700 for office equipment depreciation. The total factory overhead costs reported on the schedule of cost of goods manufactured is $_______
$6,000+2,500+10,300= $18,800
The following items would be included in the overhead section of the schedule of cost of goods manufactured: (Check all that apply.)
Factory Utilities
Direct Materials
Factory Insurance
Direct Labor
Factory Supplies Used
Factory Utilities, Factory Insurance, and Factory Supplies Used
What financial statement do Period Costs go directly to? And what do they appear on the statement as?
Period Costs are expensed directly to the Income Statement, they are an expense.
Direct Labor= $24,000; Raw Materials Beg. Inv.= $25,000; Raw Materials Purchases= $8,000; End. Raw Materials Inv.= $10,000; Indirect Labor= $36,000; Advertising Expense= $8,000.
Based on this information; what are the Prime Costs?
Prime Costs= $47,000
DL+ (Beg. RMI + RMI Purchases - End. RMI)
Lean practices include those which are designed to eliminate waste while still satisfying the customer. Out of the following examples, which are lean practices?
total quality management
continuous improvement
just-in-time manufacturing
service focus
traditional manufacturing
total quality management
continuous improvement
just-in-time manufacturing
True or false: Period Costs are expensed on the Income Statment in the period in which they were incurred. (T/F)
True
Direct Labor= $24,000; Raw Materials Beg. Inv.= $25,000; Raw Materials Purchases= $8,000; End. Raw Materials Inv.= $10,000; Indirect Labor= $36,000; Advertising Expense= $8,000; Sales= $110,000.
Based on this information; what are the Conversion Costs?
Conversion Costs= $60,000
DL+ Factory Overhead (Indirect Labor)
A company began the year with $500 in raw materials and purchased $10,250 more during the year. If the company has $725 in raw materials at the end of the year, then they would report direct materials used of $___________ on the schedule of cost of goods manufactured.
Consider a service company that provides carpet cleaning. Classify the cost of the hourly workers who clean carpets for customers as either Direct or Indirect.
An hourly carpet cleaner's wages would be direct labor.
(Direct)
A manufacturing company reports the following items: Finished goods inventory, beginning balance: $1,000 Finish goods inventory, ending balance: $1,200 Cost of goods manufactured, $5,000 The cost of goods sold is $_____
$1,000+$5,000-$1,200= $4,800
True or False: Managerial accounting is different from financial accounting in that it is structured and often controlled by GAAP.
False