Indicate whether each statement is true or false. 1.a) The standard direct material quantity is the total amount of material the company actually used to produce one unit of finished product. (……….) 1.b) The decision making process includes seven steps. (……….) 1.c) Perfection standards assume that production takes place in the ideal world. (……….)

Indicate whether each statement is true or false. 1.a) The standard direct material quantity is the total amount of material the company actually used to produce one unit of finished product. (……….) 1.b) The decision making process includes seven steps. (……….) 1.c) Perfection standards assume that production takes place in the ideal world. (……….)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 14E: Sanford, Inc., has developed value-added standards for four activities: purchasing parts, receiving...

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Sanford, Inc., has developed value-added standards for four activities: purchasing parts, receiving parts, moving parts, and setting up equipment. The activities, the activity drivers, the standard and actual quantities, and the price standards for 20x1 are as follows: The actual prices paid per unit of each activity driver were equal to the standard prices. Required: 1. Prepare a cost report that lists the value-added, non-value-added, and actual costs for each activity. 2. Which activities are non-value-added? Explain why. Also, explain why value-added activities can have non-value-added costs.
Assuming that all materials are added at the beginning of the process and that labor and factory overhead are applied evenly during the process, compute the figures to be inserted in the blank spaces of the following data, using the weighted average cost method. [Hint: for best success in solving each Case, solve them in numerical order starting with (1)]
Cicleta Manufacturing has four activities: receiving materials, assembly, expediting products, and storing goods. Receiving and assembly are necessary activities; expediting and storing goods are unnecessary. The following data pertain to the four activities for the year ending 20x1 (actual price per unit of the activity driver is assumed to be equal to the standard price): Required: 1. Prepare a cost report for the year ending 20x1 that shows value-added costs, non-value-added costs, and total costs for each activity. 2. Explain why expediting products and storing goods are non-value-added activities. 3. What if receiving cost is a step-fixed cost with each step being 1,500 orders whereas assembly cost is a variable cost? What is the implication for reducing the cost of waste for each activity?
Companies that manufacture a product face an expanded set of accounting issues. In addition to the usual accounting matters associated with selling and administrative activities, a manufacturer must deal with accounting concerns related to acquiring and processing raw materials into a finished product. Accounting for this manufacturing process entails consideration of three key cost components that are necessary to produce finished goods.” Provide your own numerical data with the calculation and analysis of Material Variances?!
Answer ALL the questions in this section. Shade the letter that corresponds to the most appropriateanswer on the answer sheet provided.2. Equivalent units of production(A) will always be greater than or equal to the physical units(B) are a measure of the number of complete units that could have been manufacturedfrom start to finish using the costs incurred during the period(C) are calculated for materials but not for conversion costs(D) are units of a new product that are essentially the same as the units of an existingproduct 5. The cash budget is part of the(A) Revenue budget(B) Operating budget(C) Financial budget(D) Budgeted balance sheet 6. Under variable costing, which manufacturing cost is expensed as a period cost?(A) Direct materials(B) Variable manufacturing overhead(C) Fixed manufacturing overhead(D) Direct labour 7. Under variable costing, which of the following costs are assigned to inventory?Variable Selling &Administrative CostsVariable FactoryOverhead Costs(A) Yes…
Companies that manufacture a product face an expanded set of accounting issues. In addition to the usual accounting matters associated with selling and administrative activities, a manufacturer must deal with accounting concerns related to acquiring and processing raw materials into a finished product. Accounting for this manufacturing process entails consideration of three key cost components that are necessary to produce finished goods. Provide your own numerical data with the calculation and Formula analysis of Material Variances?
The term given to units that represents the number of completed units that is equal, in terms of production inputs, to a given number of partially completed units is: a.Units started and completed b.Units completed c.Equivalent units d.Total units in production
Choose the best answer The production schedule is: A. The expected demand for the firm’s finished goods for a given year B. The formal plan and authority to begin production C. A description of the type and quantity of raw materials and subassemblies used to produce a single unit of finished product D. The sequence of operations during manufacturing
From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences:a. The phase of the management process that uses process information to eliminate the source of problems in a process so that the process delivers the correct product in the correct quantities is called (directing, improving).b. Direct labor costs combined with factory overhead costs are called (prime, conversion) costs.c. The salaries of salespeople are normally considered a (period, product) cost.d. The plant manager’s salary would be considered (direct, indirect) to the product.e. Long-term plans are called (strategic, operational) plans.f. Materials for use in production are called (supplies, materials inventory).g. An example of factory overhead is (electricity used to run assembly line, CEO salary).
Indicate which of the following phrases correctly completesthis sentence: “Equivalent units of production . . .” (Indicateall correct answers.)a. Are a measure of productive activity.b. Represent work done on units still in process, as well asthose completed during the period.c. Are used as the basis for computing per-unit costs inmost process cost accounting systems. d. Are computed separately for each significant input con-sumed in the production process.
Classify each of the following as direct or indirect with respect to traceability to product and as variable or fixed with respect to whether the costs fluctuate in total as volume of production changes over wide ranges. Explain your classifications. 1. The cost of components that are assembled into a final product. 2. The cost of supplies consumed when maintenance is performed on machines. 3. The wages of machine operators who work on only one product. 4. The cost of training mechanics who service processing machinery. Question content area bottom Part 1 1. The cost of components that are assembled into a final product. Classification Explanation
True or False? T or F A process manufacturer produces products that areindistinguishable from each other using a continuous production process. T or F Three categories of units are recorded on the Cost of Production report –whole units, equivalent units for direct materials, and equivalent units for conversion costs. T or F Whole units arethe total number of units handled in the department. T or F Conversion cost per equivalent unit equals total conversion costs for the period divided by total equivalent units of conversion costs. T or F Product costs must be allocated to the units transferred out of thedepartment and the partially completed units on hand at the end of the period. T or F Ford is a process manufacturer. T or F The cost of factory overhead incurred for indirect materials and other factory overhead is recorded in the direct labor account for each department. T or F Pepsi-Colais a job order manufacturer. T or F Direct materials are assumed to be added in each department.