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46 Cards in this Set
- Front
- Back
Three major manufacturing cost classifications |
Direct Materials, Direct Labor & Manufacturing Overhead |
|
The sum of direct labor and direct materials is called |
Prime Cost |
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The three principal inventory accounts of a manufacturing concern are |
Raw Materials, Work in Process and Finished Goods |
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The beginning work in process inventory cost is shown on the statement of |
Costs of Goods Manufactured |
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What cost system is used when there is a continuous movement of similar goods through the manufacturing process? |
Process Cost System |
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What are steps in a typical operating cycle? |
Procurement, Production, Warehousing, and Selling. |
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The cost accounting system of a firm follows the flow of |
Work |
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The journal entry to record the transfer of completed goods to the warehouse consists of a debit and credit to what accounts? |
Debit to Finished Goods and Credit to Work in Process. |
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What what department is work preformed directly on the product? |
Producing |
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What department assists producing departments? |
Service |
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When more overhead has been charged to production than the total costs incurred, overhead is |
Overapplied |
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The four standards of ethical conduct for management accountants are |
Competence, Confidentiality, Integrity, Objectivity |
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Failure to disclose all relevant information is a violation of the standard of |
Objectivity |
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Cost of Goods Manufactured in the income statement of a manufacturing concern serves the same function as Merchandise Purchases in the income statement of a retail concern. |
True |
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The same Inventory accounts are used generally by both retail businesses and manufacturing concerns. |
False |
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One function of a cost accounting system is to record and classify all costs according to type or nature. |
True |
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All materials that are used in the actual manufacture of goods are classified as direct materials. |
False |
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Raw materials purchased by a manufacturer may be considered finished goods by the seller. |
True |
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The wages paid to a plant mechanic to repair equipment represent indirect labor. |
True |
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Indirect material and indirect labor are classified as manufacturing overhead. |
True |
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All indirect materials enter into, and become part of, the finished product. |
False |
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The income statement and the statement of cost of goods manufactured provide all the information necessary to achieve profitable and efficient operations. |
False |
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In the process cost system, usually no effort is made during the accounting period to allocate costs to specific units of products being manufactured. |
True |
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Past data is used to determine standards for unit costs. |
True |
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The job order cost system and the process cost system may both be used by the same company. |
True |
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A function of cost accounting is to provide unit costs of products and processes. |
True |
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The depreciation on a factory building is a type of indirect material. |
False |
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Wages of the factory storeroom clerk would be classified as direct labor. |
False |
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Companies find it useful to compare and analyze the differences between estimated costs and actual costs. |
True |
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A budget is an overall financial plan for future activities. |
True |
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Procurement refers to purchasing raw materials only. |
False |
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The shipment of finished goods to customers is part of the warehousing step in the manufacturing cycle. |
False |
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The cost of manufactured articles that are sold is obtained from the cost accounting records. |
True |
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The accumulation of costs by cost centers helps in matching cost flow with workflow. |
True |
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Total costs are useful indicators of efficient production operations. |
False |
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The amount of manufacturing overhead costs applied to the job is based on an estimate. |
True |
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Underapplied overhead indicates that insufficient manufacturing overhead costs were charged to production. |
True |
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Overapplied overhead occurs when the amount of estimated manufacturing costs charged to production is greater than the actual costs. |
True |
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The figures needed to prepare the statement of cost of goods manufactured and the income statement are obtained from the special cost accounts in the general ledger. |
True |
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The producing departments assist the service departments. |
False |
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Work in Process is the name of the account used to collect and record costs as direct materials, direct labor, and overhead are charged to production. |
True |
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The work done by the purchasing agent's staff would be considered part of the procurement phase of the cost cycle. |
True |
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The standard on competence states that management accountants have a duty to maintain their professional competance through continued development of their knowledge and skills. |
True |
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A management accountant does not have an obligation to disclose unfavorable information. |
False |
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Management accountants have a responsibility to avoid disclosing confidential information unless authorized to do so. |
False |
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Statement of Cost of Goods Manufactured |
Raw Materials - Beginning Balance + Materials Purchases = Total Materials Available - Raw Materials Ending Balance = Total Materials Used - Indirect Materials Used + Direct Materials Used + Direct Labor + Manufacturing Overhead Applied = Total Manufacturing Costs + Work in Process Beginning Balance = Total Goods in Process - Work in Process Ending Balance = Cost of Goods Manufactured |