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35 Cards in this Set
- Front
- Back
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What is a product cost?
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A cost that is incurred in purchasing or maufacturing goods for sale (inventory). NOT recognized as expenses until it is sold
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When are product costs recognized as an expense?
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When the inventory is sold
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What is a period cost?
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a cost that is associated with a period of time rather than with a product or good being sold.
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What are 2 examples of period costs?
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SAG, Research and development
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When are period costs recognized as expenses?
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in the time period in which they occur.
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What kind of companies will have only period costs?
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Companies that sell services
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What kind of companies will have period and product costs?
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Companies that sell goods
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What are the 3 categories of manufacturing costs?
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Direct Materials, Direct Labor, Manufacturing Overhead
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What kind of manufacturing cost is indirect labor?
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Manufacturing overhead
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What 6 things are included in manufacturing overhead?
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Indirect matierials
indirect labor Depreciation Utilities Insurance premiums property taxes |
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What falls under the category of a Prime cost
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Direct Materials and Direct Labor
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What falls under the category of a Conversion Cost?
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Direct Labor and Manufacturing OH
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Identify the following cost as direct materials, direct labor, manufacturing overhead, or a period cost.
Commissions paid to sales people |
Periodic Cost
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Identify the following cost as direct materials, direct labor, manufacturing overhead, or a period cost.
S-L Depreciation on a factory building |
Manufacturing OH
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Identify the following cost as direct materials, direct labor, manufacturing overhead, or a period cost.
Salary of the Plant supervisor |
Manufacturing OH
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Identify the following cost as direct materials, direct labor, manufacturing overhead, or a period cost.
Health Ins. of the assembly line workers |
Direct Labor
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Identify the following cost as direct materials, direct labor, manufacturing overhead, or a period cost.
Machine Lubricant used in production activities |
Manufacturing OH
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Identify the following cost as direct materials, direct labor, manufacturing overhead, or a period cost.
Engine casings used in production activities |
Direct Materials
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Identify the following cost as direct materials, direct labor, manufacturing overhead, or a period cost.
Paint used in production activities |
Direct Materials
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Identify the following cost as direct materials, direct labor, manufacturing overhead, or a period cost.
Plant security guards |
Manufacturing OH
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Identify the following cost as direct materials, direct labor, manufacturing overhead, or a period cost.
Advertising placed in trade journals |
Period Costs
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Identify the following cost as direct materials, direct labor, manufacturing overhead, or a period cost.
Lease payments used for the president's automobile |
Period Costs
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Identify the following cost as direct materials, direct labor, manufacturing overhead, or a period cost.
Property taxes paid on factory facilities |
Manufacturing OH
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Identify the following cost as direct materials, direct labor, manufacturing overhead, or a period cost.
Office Supplies |
Periodic Cost
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What is the equation for finding the COGM?
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Total Manufacturing Costs
+ Beginning W/P - Ending W/P =COGM |
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What is the equation to find the COGS?
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Cost of Goods Manufactured + Beg. Finished Goods
– End Finished Goods =COGS |
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What is the equation to find the net income before taxes?
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NI/(1-Tax Rate)
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What is the equation to find out the amount of Applied OH
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Actual Direct Labor hours x POHR
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Which of the following statements is not correct regarding work in process?
a. Work in process is partially completed inventory. b. Work in process consists of direct labor, direct material, and manufacturing overhead. c. Work-in-Process Inventory is increased to record direct material used and direct labor incurred. d. Work-in-Process Inventory appears on the year-end balance sheet. e. Work-in-Process Inventory is reduced when goods are sold. |
e. Work-in-Process Inventory is reduced when goods are sold.
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Wages paid to the factory shop supervisor are an example of
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Product Costs
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How do you calculate the amount of Applied OH?
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Actual activity (cost driver) * POHR
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How do you calculate the POHR?
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Estimated OH/ Estimated Cost Driver
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Another term for Estimated is,
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Budgeted
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Another term for Applied is
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Allocated
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Another term for incurred is,
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Actual
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