COST ACCOUNTING
null Edition
ISBN: 9781323927397
Author: Pearson
Publisher: PEARSON
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Textbook Question
Chapter 18, Problem 18.13Q
“Abnormal rework costs should be charged to a loss account, not to manufacturing overhead.” Do you agree? Explain.
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In a process account, abnormal losses are valued:A. at their scrap value.B. the same as good production.C. at the cost of raw materials.D. at good production cost less scrap value.
mcqs
Which of the following is correct with respect to closing out overapplied manufacturing overhead to Cost of Goods Sold versus closing it out to Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold?
a
The balance in the Work-in-Process account after allocation will be higher if the overapplied overhead is closed out by allocating it to all appropriate accounts.
b
Cost of Goods Sold will be lower if the overapplied overhead is closed out by allocating it to the inventory accounts as well as to Cost of Goods Sold.
c
Operating income will be higher if all of the overapplied overhead is closed out to Cost of Goods Sold.
d
The balance in the Work-in-Process account after allocation will be the same under either method.
Which would NOT be relevant in a make- or- buy decision?a) factory deprciation
b) direct materials
c) variable overhead
d) direct labor
Chapter 18 Solutions
COST ACCOUNTING
Ch. 18 - Why is there an unmistakable trend in...Ch. 18 - Distinguish among spoilage, rework, and scrap.Ch. 18 - Normal spoilage is planned spoilage. Discuss.Ch. 18 - Costs of abnormal spoilage are losses. Explain.Ch. 18 - What has been regarded as normal spoilage in the...Ch. 18 - Units of abnormal spoilage are inferred rather...Ch. 18 - In accounting for spoiled units, we are dealing...Ch. 18 - Total input includes abnormal as well as normal...Ch. 18 - Prob. 18.9QCh. 18 - The unit cost of normal spoilage is the same as...
Ch. 18 - In job costing, the costs of normal spoilage that...Ch. 18 - The costs of rework are always charged to the...Ch. 18 - Abnormal rework costs should be charged to a loss...Ch. 18 - When is a company justified in inventorying scrap?Ch. 18 - How do managers use information about scrap?Ch. 18 - Prob. 18.16MCQCh. 18 - Which of the following is a TRUE statement...Ch. 18 - Healthy Dinners Co. produces frozen dinners for...Ch. 18 - Fresh Products, Inc. incurred the following costs...Ch. 18 - Normal and abnormal spoilage in units. The...Ch. 18 - Weighted-average method, spoilage, equivalent...Ch. 18 - Weighted-average method, assigning costs...Ch. 18 - FIFO method, spoilage, equivalent units. Refer to...Ch. 18 - FIFO method, assigning costs (continuation of...Ch. 18 - Weighted-average method, spoilage. LaCroix Company...Ch. 18 - FIFO method, spoilage. 1. Do Exercise 18-25 using...Ch. 18 - Spoilage, journal entries. Plastique produces...Ch. 18 - Recognition of loss from spoilage. Spheres Toys...Ch. 18 - Weighted-average method, spoilage. LogicCo is a...Ch. 18 - FIFO method, spoilage. Refer to the information in...Ch. 18 - Standard-costing method, spoilage. Refer to the...Ch. 18 - Spoilage and job costing. (L. Bamber) Barrett...Ch. 18 - Reworked units, costs of rework. Heyer Appliances...Ch. 18 - Scrap, job costing. The Russell Company has an...Ch. 18 - Weighted-average method, spoilage. World Class...Ch. 18 - FIFO method, spoilage. Refer to the information in...Ch. 18 - Weighted-average method, shipping department...Ch. 18 - FIFO method, shipping department (continuation of...Ch. 18 - Physical units, inspection at various levels of...Ch. 18 - Spoilage in job costing. Jellyfish Machine Shop is...Ch. 18 - Rework in job costing, journal entry (continuation...Ch. 18 - Scrap at time of sale or at time of production,...Ch. 18 - Physical units, inspection at various stages of...Ch. 18 - Weighted-average method, inspection at 80%...Ch. 18 - Job costing, classifying spoilage, ethics....
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- Which is not a step in analyzing the cost driver for manufacturing overhead? A. Identify the cost B. identify non-value-added costs C. analyze the effect on manufacturing overhead D. identify the correlation between the potential driver and manufacturing overheadarrow_forwardExplain how a plantwide overhead rate, using a unit-based driver, can produce distorted product costs. In your answer, identify two major factors that impair the ability of plantwide rates to assign cost accurately.arrow_forwardHow are nonfactory costs and costs that benefit both factory and nonfactory operations accounted for?arrow_forward
- If some units are normally lost during the manufacturing process and the remaining good units absorb the cost, what effect does this have on the unit cost of goods finished during the period and the cost of the work in process at the end of the period?arrow_forwardOverhead costs are the source of product cost distortions. Do you agree or disagree? Explain.arrow_forwardIf the factory overhead account has a negative balance, factory overhead is said to be: a.Underapplied B.Over-applied C.Undcrabsorbed D. In errorarrow_forward
- What features of the cost accounting system would be expected to prevent the omission ofrecording materials used in production?arrow_forwardDepreciation of Machinery would not be an element of factory overhead? Select one: a. True b. Falsearrow_forwardIn good accounting form, what amount should be debited to Factory overhead control to record spoilage pertaining to unrecovered cost?arrow_forward
- Which of the following costs would not be inventoriable? Indirect labor cost Office rent factory insurance costarrow_forwardTraditional overhead allocations result in which of the following situations? a. Overhead costs are assigned as period costs to manufacturing operations. b. High-volume products are assigned too much overhead, while low-volume products are assigned too little overhead. c. Low-volume products are assigned too much overhead, while high-volume products are assigned too little overhead. d. The resulting allocations cannot be used for financial reports.arrow_forwardDo not Copy What kinds of challenges occurs in the Cost Control and Cost Reduction in the Manufacturing concerns?arrow_forward
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