Management Accounting

Which of the following is not a step in preparing a production cost report?

A department has no beginning work in process, has started 80,000 units and completed 50,000 units. Its ending work in process is 30,000 units, 60% complete as to conversion costs and fully complete as to materials. Its equivalent units for conversion costs are

In process costing, the computation of unit production costs requires

Which of the following is not included in a production cost report?

Unit costs for materials and conversion costs amount to $4 and $5 respectively. The ending work in process costs for 8,000 units (100% complete as to material and 70% complete as to conversion costs) amount to

Even in today’s automated environment, direct labor is sometimes the appropriate basis for assigning overhead cost to products.

In the first stage of activity-based costing, overhead is assigned to products using cost drivers.

The first step in activity-based costing is to identify and classify the major activities involved in the manufacture of specific products, and allocate manufacturing overhead to the appropriate cost pools.

Before costs are allocated to the cost pools, the cost drivers for each cost pool must be identified.

Under ABC, overhead costs are shifted from the high-volume product to the low-volume product.

Activity-based costing does not change the amount of overhead costs, but it does allocate those costs in a more accurate manner.

Overhead costs are not allocated by means of arbitrary volume-based cost drivers under ABC

Value-added activities increase the worth of a product or service to customers and involve resource usage that customers are willing to pay for.

Product-level activities in ABC are required to support or sustain an entire production process.

Just-in-time processing strives to eliminate inventories by using a “pull approach” in manufacturing. 

The last step in activity-based costing is to

Machine hours would be an accurate cost driver for

All of the following are benefits of ABC except it leads to

The level of ABC activities performed in support of an entire product line are classified as

Just-in-time processing strives to eliminate inventories by using a

Manufacturing overhead is allocated directly to the cost units in the Cost Distribution Sheet.

The adjustment of the financial accounting expenses according to operational and objective criteria results in cost types.  

Cost centers are only debited with overhead.

Revenue is allocated to cost centers. 

Changes to the inventory occur in the cost unit accounting section.

Indirect cost centers (Vorkostenstelle) render their service to cost centers. 

The use of an overhead rate is necessary to allocate cost types to cost units

The rates to calculate individual orders are derived from the total calculation. 

An increase of inventory leads to higher costs in the cost centers. 

Beginning work in process is not included in manufacturing costs. 

A warehouse cost center amount of CHF 30’000.-- is allocated to the cost units A, B and C based on a percentage of direct material use. How much storage overhead does cost unit A incur when the use of direct materials in CHF is as follows: A 800’000.--, B 1’400’000.--, C 1’000’000.--

Individual order: Calculate the sales prize rounded to two decimals for a single tube. Data for an amount of 10'000 tubes is: direct labor rate per hour CHF 40.--, direct material cost CHF 40'000.--, direct labor hours 90, the predetermined overhead rate to allocate warehouse overhead costs is 10% of direct materials, the predetermined overhead rate for the production 1 cost center is 150% of direct labor, production 2 manufactures 1000 pieces per hour at CHF 500.-- overhead cost per hour, the selling & administrative predetermined overhead rate is 20 % of manufacturing cost, markup for net income 10% of total costs.

Formula for manufacturing costs: 

Formula for cost of finished goods: 

Formula for total cost (Selbstkosten)

The range over which a company is expected to operate is called the relevant range of the activity index.

A mixed cost contains both selling and administrative cost elements.

Variable costs are costs that remain the same per unit at every level of activity.

If a salesperson incurs $2,000 of expenses in servicing two customers and $4,000 of expenses in servicing four customers, the fixed costs are $1,000.

If revenue = $80 and variable cost = 40% of revenue, then contribution margin = $48.