Exam 6: Estimating the Costs of Products and Inventory

The _________________________ yields the benefits of both the timeliness and convenience of normal costing during the year and the allocation of actual production overhead costs at year-end.

The Materials Control account is increased when:

Under normal costing,______________________ is the amount of indirect production costs allocated to individual jobs based on the budgeted cost-driver rate multiplied by the quantity used.

Companies typically wait for accurate information regarding actual manufacturing overhead costs before pricing a job.

The reliability of the job-cost records depends on the reliability of the inputs.

Answer the following questions using the information below: Queanbeyan Company incurred fixed manufacturing costs of $7200 during 2018.Other information for 2018 includes: The budgeted denominator level is 800 units. Units produced total 1000 units. Units sold total 950 units. Beginning inventory was zero. The fixed manufacturing cost rate is based on the budgeted denominator level.Manufacturing variances are closed to cost of goods sold. -Many companies use variable costing for internal reporting to reduce the undesirable incentive to build up inventories.

Answer the following questions using the information below: Wagga Wagga Textiles is a small textile manufacturer using machine-hours as the single indirect-cost rate to allocate manufacturing overhead costs to the various jobs contracted during the year.The following estimates are provided for the coming year for the company and for the Tumut Brass Band band jacket job. Company Tumut Brass Band Job Direct materials \ 40000 \ 1000 Direct labour \ 10000 \ 200 Manufacturing overhead costs \ 30000 Machine-hours 100000 900 -What amount of manufacturing overhead costs will be allocated to this job?

Estimating the degree of completion for the calculation of equivalent units is usually easier for conversion costs than it is for direct materials.

Many large companies with multiple production methods and processes have hybrid-costing systems that are:

The write-off to ________________ is the simplest approach for dealing with under- or over-allocated overhead.

If managers report inventories of zero at the start and end of each accounting period,operating profits under absorption costing and variable costing will be the same.

Answer the following questions using the information below: Leongatha Motors produces and sells an auto part for $30.00 per unit.In 2010,100 000 parts were produced and 75 000 units were sold.Other information for the year includes: Direct materials \ 12.00 per unit Direct manufacturing labour \ 2.25 per unit Variable manufacturing costs \ 0.75 per unit Sales commissions \ 3.00 per part Fixed manufacturing costs \ 375000 per year Administrative expenses, all fixed \ 135000 per year -What is the inventoriable cost per unit using absorption costing?

Actual (rather than allocated)manufacturing overhead costs are included in the:

The Morgan Models company manufactures replica plastic airplane and motorised vehicle models.During October,the firm's Assembly Department started production of 60 000 models.During the month,the firm completed 66 000 models,and transferred them to the Finishing Department.The firm ended the month with 22 000 models in ending inventory.There were 28 000 models in beginning inventory.All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process.The FIFO method of process costing is used by Morgan.Beginning work in process was 25% complete as to conversion costs,while ending work in process was 50% complete as to conversion costs. Beginning inventory: Direct materials costs \ 39200 Conversion costs \ 30800 Manufacturing costs added during the acounting period: Direct materials costs \ 90000 Conversion costs \ 280000 -How many of the units that were started during October were completed during October?

Answer the following questions using the information below: Cronulla Products uses a normal cost system and had the following data available for 2018: Direct materials purchased on account \ 74000 Direct materials requisitioned 41000 Direct labour cost incurred 65000 Factory overhead incurred 73000 Cost of goods completed 146000 Cost of goods sold 128000 13000 Be ginning direct materials inventory 32000 Beginning WIP inventory 29000 Beginning firished goods inventory Overhead application rate, 125 percent -The ending balance of direct materials inventory is:

The only difference between variable and absorption costing is the expensing of:

Job costing is commonly used to estimate costs in beverage production.

Switching production to products that absorb the highest amount of fixed manufacturing costs is also called:

The difference between operating profits under variable costing and absorption costing centres on how to account for:

When the allocated amount of indirect costs is less than the actual amount,indirect costs have been: