Select each of the items with the best description of its purpose. Description Items 1. Holds indirect cost until assigned to production. 2. Used when materials move continuously through a manufacturing process. 3. Hold production costs until products are transferred from production to finished goods (or another department). 4. Computes equivalent units only on production activity in the current period. 5. Standardizes partially completed units into equivalent completed units. 6. Combined costs of direct labor and overhead per equivalent unit. 7. Holds costs of finished products until sold to customers.

Select each of the items with the best description of its purpose. Description Items 1. Holds indirect cost until assigned to production. 2. Used when materials move continuously through a manufacturing process. 3. Hold production costs until products are transferred from production to finished goods (or another department). 4. Computes equivalent units only on production activity in the current period. 5. Standardizes partially completed units into equivalent completed units. 6. Combined costs of direct labor and overhead per equivalent unit. 7. Holds costs of finished products until sold to customers.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 9MC: Which is not a step In activity-based costing? A. identify the activities performed by the...

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The cost behavior patterns below are lettered A through H. The vertical axes of the graphs represent total dollars of expense, and the horizontal axes represent production in units, machine hours, or direct labor hours. In each case, the zero point is at the intersection of the two axes. Each graph may be used no more than once. Required: Select the graph that matches the lettered cost described here. a. Depreciation of equipmentthe amount of depreciation charged is computed based on the number of machine hours that the equipment was operated. b. Electricity billflat fixed charge, plus a variable cost after a certain number of kilowatt hours are used. c. City water billcomputed as follows: d. Depreciation of equipmentthe amount is computed by the straight-line method. e. Rent on a factory building donated by the citythe agreement calls for a fixed fee payment, unless 200,000 labor hours are worked, in which case no rent need be paid. f. Salaries of repair workersone repair worker is needed for every 1,000 machine hours or less (i.e., 0 to 1,000 hours requires one repair worker, 1,001 to 2,000 hours requires two repair workers, etc.).
Overhead costs are assigned to each product based on __________________. A. the proportion of that products use of the cost driver B. a predetermined overhead rate for a single cost driver C. price of the product D. machine hours per product
Which is nor needed to compute equivalent units of production? A. the percentage of completion for inventory still in process B. the number of units transferred out C. the number of units started and completed D. the material cost per unit
Which of the following is the step in which materials, labor, and overhead are detailed? A. determining the units to which costs are assigned B. determining the equivalent units of production C. determining the cost per equivalent units D. allocating the costs to the units transferred out and the units partially completed
Which is not a step In activity-based costing? A. identify the activities performed by the organization B. identify the cost driver(s) associated with each activity C. compute a cost rate per production D. assign costs to products by multiplying the cost driver rate by the volume of the cost driver units consumed by the product
Carltons Kitchens three cost pools and overhead estimates are as follows: Compare the overhead allocation using: A. The traditional allocation method B. The activity-based costing method (Hint: the traditional method uses machine hours as the allocation base.)
During production, how are the costs in process costing accumulated? A. to cost of goods sold B. to each individual product C. to manufacturing overhead D. to each individual department
Frenchys has three cost pools and an associated cost driver to allocate the costs to the product. The cost pools, cost driver, estimated overhead, and estimated activity for the cost pool are: What is the predetermined overhead rate for each activity?
Under absorption costing, a unit of product includes which costs? A. direct material, direct labor, and manufacturing overhead B. direct material, direct labor, and variable manufacturing overhead C. direct material, direct labor, and fixed manufacturing overhead D. direct material, direct labor, and all variable manufacturing overhead
With nonuniform inputs, the cost of EWIP is calculated by a. adding the materials cost to the conversion cost. b. subtracting the cost of goods transferred out from the total cost of materials. c. multiplying the unit cost in each input category by the equivalent units of each input found in EWIP. d. multiplying the total unit cost by the units in EWIP. e. None of these.
Under what conditions may the unit costs of materials, labor, and overhead be computed by using only one equivalent production figure?
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)]