Term Question : The standard number of hours that should have been worked for the output attained is 6,000 direct labor hours and the actual number of direct labor hours worked was 6,300. If you are a retailer, your cost to purchase inventory is also an inventoriable. Which of the following is not a manufacturing cost category?. The total cost of a finished product generally contains equal amounts of materials, labor, and overhead costs. Finished Goods Inventory is charged for the cost of jobs completed during a period. Examples — Angle Machining, Inc.
Period costs are not inventoriable costs. Cost accounting questions often provide lots of data, but not all of that information is needed to answer the question. The total labor variance is twice the total overhead variance. Many companies now focus on reducing defects in finished products with the goal of zero defects. If the company has budgeted to sell 80,000 widgets in October, how much is the total budgeted selling and administrative expenses for October? Partially completed motor engines for a motorcycle plant b. Definition Answer: Period costs Term Question: For inventoriable costs to become expenses under the matching principle Definition Answer: the product to which they attach must be sold. A manufacturing process requires small amounts of glue.
Definition Answer: No effect Term Question: In vertical analysis, the base amount for each income statement item is Definition Answer: net sales. Information may be abridged and therefore incomplete. Which of the following is not classified as direct labor? Accrual accounting also applies to inventory. Each financial situation is different, the advice provided is intended to be general. Product costs consist of a.
When a company sells an item out of inventory, revenue a sale is generated, and cost of goods sold is posted to the accounting records. Which of the following is not classified as direct labor? When raw materials are received, there is no effort at this point to associate the cost of materials with specific jobs. The following budget data are available: Expenses are paid in the month incurred. Such costs are incurred on manufacturing process either directly as material and labor costs or indirectly as overheads. Lumber used to build tables 24. What sales are needed by Norman to break even? The matching concept is the guideline accountants use to be sure expenses are related to revenues and show up in the same period. This principle ties the revenue recognition principle and the expense principle together, so it is important to understand all three.
A manufacturing process requires small amounts of glue. Revenue Recognition Before you can tie expenses to revenue, you must know when revenue should be recognized in the accounting records. The total cost of a finished product generally contains equal amounts of materials, labor, and overhead costs. About the Author Laura Chapman holds a Bachelor of Science in accounting and has worked in accounting, bookkeeping and taxation positions since 2012. When you are deciding how to record an expense for goods, note that the principle mentions the goods being used. Direct materials and direct labor c. Definition Answer: Work in Process Inventory has increased.
Which of the following is not a manufacturing cost category? What is work in process inventory generally described as? The amount of costs allocated to products d. Which one of the following is not considered as material costs? Both direct labor cost and indirect labor cost are product costs. Steel used in the manufacturing of steel-radial tires d. For the work of factory employees to be considered as direct labor, the work must be conveniently and a. Keep in mind that, almost always, material costs are put into production before labor costs. Copy machine operators at a copy shop c.
In later periods, you sell the newer, more expensive goods. Definition Answer: 214,800 units Term Question : If a company has adopted continuous budgeting, the budget will show plans for Definition Answer: a full year ahead. Examples of products costs are raw material, labor, factory depreciation, fuel and packaging costs. Which one of the following would not be classified as manufacturing overhead? Bottlers of beer in a brewery b. Actual manufacturing overhead costs are assigned to each job by tracing each overhead cost to a specific job.
You decide if the cost is direct or indirect, and if the cost is fixed or variable. Regardless of when the customer actually pays you for the roofing job, you performed the work and are owed the money. An unfavorable variance is when actual costs are higher than planned. Direct materials requisitioned from the storeroom should be charged to the Work In Process Inventory account and the job cost sheets for the individual jobs on which the materials were used. However, more actual revenue than planned is a favorable variance. Finished Goods Inventory is charged for the cost of jobs completed during a period.
Period costs are not inventoriable costs. Which one of the following is not considered as material costs? Administrative salaries, for example, cannot be matched to any specific revenue stream. Definition Answer: It decreases about 14 units. Many companies now focus on reducing defects in finished products with the goal of zero defects. The number of defects found on each product 22.