system historical cost analysis system . 2. What are the symptoms of cost system failure at ETO? As we learned in chapter 7 initially,”… cost systems designs were simple…“(Brewster et.al, p. 236). The goal of the allocation process is to assign overhead in a manner that most appropriately reflects the cause /effect relationship of incurred costs. These cost systems were based on belief that there was a high correlation between direct labor hours and units produced (Brewster et. al, p. 237). ETO’s
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三 True/False Questions 1. Job-order costing is used in manufacturing companies and process costing is used in service companies. Ans: False AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 1 Level: Easy 2. A flour manufacturer is more likely to use process costing than job-order costing whereas a manufacturer of customized leather jackets is more likely to use job-order costing than process costing. Ans: True AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA
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costing. Describe the source documents used to track direct materials and direct labor costs to the job cost sheet. Calculate a predetermined overhead rate and use it to apply manufacturing overhead cost to jobs. Describe how costs flow through the accounting system in job order costing. Calculate and dispose of overapplied or underapplied manufacturing overhead. Calculate the cost of goods manufactured and cost of goods sold. Lecture Presentation–LP2 www.mhhe.com/whitecotton1e 36 FOCUS COMPANY:
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2. The three elements of costs incurred in manufacturing a product are: (1) direct material costs; 2) direct labor costs; and (3) manufacturing overhead costs. Direct materials are materials included in the finished products, used only in the man-ufacture of the product, and clearly and easily traceable to the product. Direct labor costs include labor costs of all employees actually working on materials to convert them to finished goods. Manufacturing
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so as to guarantee that your answer is an original. Do not submit as your own. Garcia Manufacturing uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2010, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $20,000, direct labor $12,000, and manufacturing overhead $16,000. As of January 1, Job No. 49 had been completed at a cost of $90,000 and was part of
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difference between variable costing and absorption costing for financial accounting is the accounting for fixed manufacturing costs. All variable manufacturing costs are product costs under the both methods. But fixed manufacturing costs are treated differently. Under variable costing, fixed manufacturing costs are treated as expenses of the period. Under absorption costing, fixed manufacturing costs are product costs. They are then deducted as the costs of goods sold when sales occur. Format of Absorption
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Manufacturing Analysis Paper Peter Stifner ACC 561 February 1, 2016 Some Doofus Professor Manufacturing Analysis Paper A regulatory analysis for the Ideal Manufacturing Company revealed several issues with the company. While the Research and Development portion of the company has been successful, the prestige is bought with significant costs which the company hopes to offset with outside business. The issue at hand is to decide if Ideal should proceed with outside Research and Development
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manufacturer of personal computers. Various costs and expenses associated with its operations are as follows. The company intends to classify these costs and expenses into the following categories: (a) direct materials, (b) direct labor, (c) manufacturing overhead and (d) period costs. | | 1. | Property taxes on the factory building. D | 2. | Production superintendents' salaries. B | 3. | Memory boards and chips used in assembling computers. A | 4. | Depreciation on the factory equipment
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3) For variable manufacturing overhead, the favorable spending variance suggests that cheaper items were used, which could p which could be that more skilled/qualified workers were hired, which should lead to favorable labor efficiency variances. Due that the efficiency variances were related to factors other than the cost of the labor or overhead. 4) It depends, Sarah is correct if the variable overhead costs consisted only of costs that were related to direct manufacturing la variance would
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February, purchases of parts (replacement parts) by Star amounted to $97,000, the beginning of inventory of parts was $38,500, and the ending inventory of parts was $15,250. Payments to repair technicians during the month of February totaled $52,500. Overhead incurred was $121,000. a. What was the cost of materials used for repair work during the month of February? $38,500 + $97,000 – $15,250 = $120,250 b. What was the prime cost for February? $120,250 + $52,500 = $172,750 c. What was the
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