acct201bfinalstudyguide

acct201bfinalstudyguide - Chapter 1 1. Manufacturing Costs...

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Chapter 1 1. Manufacturing Costs = Direct Materials + Direct Labor +Manufacturing Overhead. Direct Materials = Raw materials that become an integral part of the product and that can be conveniently traced directly to it. Direct Labor = Those labor costs that can be easily traced to individual units of product . Manufacturing Overhead = Manufacturing costs cannot be traced directly to specific units produced. A) Indirect Materials = Materials used to support the production process (lubricants for machinery). B) Indirect Labor = Wages paid to employees who are not directly involved in production work. (Security Guards) 2. Non Manufacturing Costs = ( Selling Costs: Costs necessary to get the order and deliver the product , Administrative Costs: All executive, organizational, and clerical costs.) 3. Product Costs = include direct materials, direct labor, and manufacturing overhead. 4. Period Costs = are not included in product costs. They are expensed on the income statement. (selling and administrative) 5. Prime Costs = Direct Materials + Direct Labor 6. Conversion Cost = Direct Labor + Manufacturing Overhead 7. Manufacturer Balance Sheet = Current Assets Cash Receivables Prepaid Expenses Inventories: Raw Materials Work in Process Finished Goods 8. Inventory Flows Beginning balance Beginning balance Additions to inventory Additions to inventory + = Ending balance Ending balance Withdrawals from inventory Withdrawals from inventory +
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8. Direct Costs = Costs that can be easily and conveniently traced to a unit of product or other cost object. Examples: Direct material and direct labor 9. Indirect Costs = Costs that cannot be easily and conveniently traced to a unit of product or other cost object. Example: Manufacturing overhead Chapter 2 1. Types of Product Costing Systems: Process Costing, Job-Order Costing. 2. Process Costing = A company produces many units of a single product. One unit of product is indistinguishable from other units of product. The identical nature of each unit of product enables assigning the same average cost per unit. 3. Job Order Costing = Many different products are produced each period. Products are manufactured to order. The unique nature of each order requires tracing or allocating costs to each job, and maintaining cost records for each job. 4. In job order costing, costs are accumulated and accounted for by each individual job. Charge direct material and direct labor costs to each job as work is performed. Manufacturing Overhead, including indirect materials and indirect labor , are allocated to jobs rather than directly traced to each job. 5. Application of Manu. OH = Manufacturing overhead is applied to jobs that are in process. An allocation base, such as direct labor hours, direct labor dollars, or machine hours, is used to assign manufacturing overhead to individual jobs. The predetermined overhead rate ( POHR ) used to apply overhead to jobs is determined before the period begins 6. Overhead applied = POHR × Actual activity Chapter 3 1. Plantwide Overhead rate = A single overhead rate used throughout an entire factory.
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acct201bfinalstudyguide - Chapter 1 1. Manufacturing Costs...

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