Instruction: Write "T" if the statement is TRUE. If FALSE, write "F" and underlinethe word that makes the statement incorrect.1. A knowledge of the costs of doing business is needed to estimate a job or tobid for jobs or contracts. The order generally goes to the highest bidder.2. Cost accounting is also used in preparing a company's budget which is theoverall financial plan for present activities.3. Raw material to one manufacturer is not considered finished goods by thesupplier of those materials.4. In the manufacturing of clothing, the earnings of cutters are indirect laborcosts.5. All costs incurred in the factory that cannot be considered direct materials ordirect labor are classified as factory burden._6. Oil used for lubricating the factory machinery is an operating supply._7. Manufacturing expenses includes costs that can be charged directly tospecific products.8. Wages and salaries of factory workers as supervisor is a direct labor cost._9. Service firms have only supplies in inventories, merchandising firms buy andsell products and hold merchandise inventories while manufacturing firms buy materialsand converts these inputs into saleable products_10. Work in Process Inventory are partially completed products._11. A particular product not completed at the end of the accounting periodbecomes part of work in process inventory.12. The depreciation of automobiles used by sales personnel is considered afactory overhead._13. Prime costs plus conversion costs equals total manufacturing costs.14. Finished goods inventory is an asset, but inventories of materials and workin process are not considered assets until production is completed.15. Marketing, selling, and administrative costs are broad classification of costsincurred by a manufacturing company.

Cost Accounting Cost Accounting which another branch of Accounting which is mainly concerned about…

Instruction: Write "T" if the statement is TRUE. If FALSE, write "F" and underline the word that makes the statement incorrect. i 1. A knowledge of the costs of doing business is needed to estimate a job or to bid for jobs or contracts. The order generally goes to the highest bidder. 2. Cost accounting is also used in preparing a company's budget which is the overall financial plan for present activities. 3. Raw material to one manufacturer is not considered finished goods by the supplier of those materials. 4. In the manufacturing of clothing, the earnings of cutters are indirect labor costs. _5. All costs incurred in the factory that cannot be considered direct materials or direct laber are classified as factory burdon

Instruction: Write "T" if the statement is TRUE. If FALSE, write "F" and underline the word that makes the statement incorrect. i 1. A knowledge of the costs of doing business is needed to estimate a job or to bid for jobs or contracts. The order generally goes to the highest bidder. 2. Cost accounting is also used in preparing a company's budget which is the overall financial plan for present activities. 3. Raw material to one manufacturer is not considered finished goods by the supplier of those materials. 4. In the manufacturing of clothing, the earnings of cutters are indirect labor costs. _5. All costs incurred in the factory that cannot be considered direct materials or direct laber are classified as factory burdon

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter1: Accounting As A Tool For Managers

Section: Chapter Questions

Problem 1EB: Indicate whether the statement describes reporting by the financial accounting function or the...

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Taylor Speedy has prepared the following list of statements about managerial accounting, financial accounting, and the functions of management. Identify each statement as true or false. Financial accounting centers on providing information to internal users. Staff positions are directly involved in the companys primary revenue-generating activities. Preparation of budgets is part of financial accounting. Managerial accounting applies only to merchandising and manufacturing companies. Both managerial accounting and financial accounting deal with many of the same economic events.
Classifying costs The following is a manufacturing cost report of Marching Ants Inc. a. List the errors in the preceding report. b. Prepare a corrected report.
Indicate whether the statement describes reporting by the financial accounting function or the managerial accounting function of an organization. The users of the report are managers who need a daily summary of work done each shift. The report is a job cost sheet for jobs completed in a 24-hour period. The annual report is released each year on the companys website. The report is audited by the companys certified public accountant firm. The report is prepared every day because the customer service manager needs information about inventory ready to be shipped to customers.
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Assume you are the manager for the semi-trucks division at the Speedy Delivery Company. The semi-truck division is a cost center and you are reviewing the driver overtime costs for the previous year, shown here: A. Microsoft Excel or another spreadsheet application, create a line chart with markers showing the driver overtime expense. Describe your observations. B. Knowing that safety is important in your industry and weather plays a significant role in the safety of drivers, you decide to talk with the safety manager and obtained the following information: Using Microsoft Excel or another spreadsheet application, create individual line charts with markers showing the average snowfall and non-company highway accidents. Describe your observations and actions you might consider.
Darnell Poston, owner of Poston Manufacturing, Inc., wants to determine the cost behavior of labor and overhead. Darnell pays his workers a salary; during busy times, everyone works to get the orders out. Temps (temporary workers hired through an agency) may be hired to pack and prepare completed orders for shipment. During slower times, Darnell catches up on bookkeeping and administrative tasks while the salaried workers do preventive maintenance, clean the lines and building, etc. Temps are not hired during slow times. Darnell found that workers salaries, temp agency payments, rentals, utilities, and plant and equipment depreciation are the largest dollar accounts. He believes that workers salaries and plant and equipment depreciation are fixed, temp agency payments are associated with the number of orders (since temp workers are used to pack and prepare completed orders for shipment), and electricity is associated with the number of machine hours. When the number of different parts stored by Poston exceeds the space in the materials storeroom, Darnell rents nearby warehouse space. He can rent as much or as little space as he wants on a month-to-month basis. Therefore, he believes warehouse rental payments are variable with the number of parts purchased and stored. The account balances for the past six months as well as the six-month total are as follows: Information on number of machine hours, orders, and parts for the six-month period follows: Required: 1. Calculate the monthly average account balance for each account. Calculate the average monthly amount for each of the three drivers. 2. Calculate fixed monthly cost and the variable rates for temp agency payments, warehouse rent, and electricity. Express the results in the form of an equation for total cost. 3. In July, Darnell predicts there will be 420 orders, 250 parts, and 5,900 machine hours. What is the total labor and overhead cost for July? 4. What if Darnell buys a new machine in July for 24,000? The machine is expected to last 10 years and will have no salvage value at the end of that time. What part of the cost equation will be affected? How? What is the new expected cost in July?
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Hankook Company employ new employee and are assigned to make Statement of Cost of Manufactured, Statement of Cost of Goods Sold, and Income Statement. The results attached on picture below Questions : a. Identify the factory overhead item and the total in USD b. Identify the period cost and the total in USD c. If there is something wrong with the income statement above, correct the income statement above so all the item cost is where it should be.
You are Accountant of the company and you are being asked to submit a report to the Managementregarding following matters:1) Briefly discuss the different cost classifications which are relevant for a business like RaajjeFresh.2) Using the information in Annex 1, identify the Fixed Costs and Variable Costs, showing them ina table.3) Using the table prepared in (2) above, prepare a break-even chart for the given period (withclear labels).4) Using the information in Annex 2, prepare an overhead summary, showing clearly the totaloverheads for each department. Prepare the following calculations using the total overhead foreach department:i. Calculate the Overhead Absorption Rate (OAR) based on Labour hours.ii. Calculate Overhead Absorption Rate (OAR) based on number of units (for 3000 units)iii. Calculate the Total Cost per unit from the available information (use OAR based on costper unit)iv. Which of the above absorption bases is more suitable for Raajje Fresh?
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