materials cost 4. Prime costs are the combination of direct materials and direct labor costs‚ while conversion costs are the combination of direct labor costs and factory overhead costs. 5. Product costs are composed of three elements of manufacturing costs: direct materials cost‚ direct labor cost‚ and factory overhead cost. These costs are treated as assets until the product is sold. Product costs are sometimes referred to as inventoriable costs. Period costs are costs that are used in generating
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in the manufacturing process to produce a finished product to sell. In a lumber mill the natural resource‚ the logs‚ are the direct materials used in the manufacturing process to produce the final lumber products. b. Direct Manufacturing-Labor Costs. Direct Manufacturing labor costs are the hourly labor costs associated with manufacturing a product. Maintenance‚ Quality Control‚ Management‚ and Administrative employees are not involved in direct manufacturing labor costs. c. Manufacturing Overhead
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However‚ Financial Accounting is for external users‚ it is more for general purpose. It is highly condensed. It is reported by quarterly ‚and annually. It has to be written by GAAP. It more focused on being objective than relevant. 2) Whippany manufacturing wants to estimate costs for each product they produce at its Troy plant. The Troy plant produces three products at this plant‚ and runs two flexible assembly lines. Each assembly line can produce all three products. Required: a. Classify each
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Activity-Based Costing Traditional Costing Systems Allocates overhead using a single predetermined rate. ► Job order costing: direct labor cost may be the relevant activity base. ► Process costing: machine hours may be the relevant activity base. Assumption was satisfactory when direct labor was a major portion of total manufacturing costs. ► Wide acceptance of a high correlation between direct labor and overhead costs. 4-3 LO1 Recognize the difference between traditional
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and nonfinancial aspects of the plan. 2. The revenues budget should be based on the production budget. 3. A favorable variance should be ignored by management. 4. The direct manufacturing labor price variance is likely to be unfavorable if lower-skilled workers are put on a job. 5. For fixed overhead costs‚ the flexible-budget amount is always the same as the static-budget amount. II. MULTIPLE CHOICE 6. The plans of management are expressed formally in: A. the annual report
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information for a manufacturing Enterprise by compiling a production cost statement. 1. The financial statements of manufacturing enterprises The financial statements of the manufacturing enterprise differs very little from those of the merchandising enterprise. Account titles on the balance sheet of the manufacturer are similar to those used by the merchandiser. The main difference between the balance sheets is the use of three inventory (stock) accounts by the manufacturing enterprise while merchandising
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find out different costs of company. In this assignment we going to calculate manufacturing overhead‚ product cost‚ period cost‚ cost of good manufactured and its income statement of the financial year‚ overhead rates for each activity and per unit costs and Production cost Report. ASSIGNMENT QUESTIONSU AND ANSWERS ------------------------------------------------- QUESTION 1 Answer… A. Manufacturing Overhead Accounts Name | Amount ($) | Factory utilities | 11500 | Depn. On factory
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(drugs and medical devices)‚ physician surgical time‚ and operating room over-head. On January 1 of the current year‚ the annual operating room overhead is estimated to be: Disposable supplies $124‚500 Depreciation expense 24‚000 Utilities 15‚300 Nurse salaries 188‚000 Technician wages 47‚200 Total operating room overhead $399‚000 The overhead costs will be assigned to procedures based on the number of surgical room hours. The Medical Center expects to use the operating room an average
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accounting period‚ Warren paid $3‚000 for raw materials‚ $4‚000 for labor‚ and $2‚000 for overhead costs that were incurred to make candy. Warren started and completed 10‚000 units of candy‚ of which 7‚000 were sold. Based on this information‚ Warren would recognize which of the following amounts of expense on the income statement? a. $2‚700 b. $6‚300 c. $7‚200 d. $9‚000. 3. Bandera Manufacturing Company paid cash for wages of production workers. Which of the following choices
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Chapter 8 Accounting for manufacturing * Manufacturing business is more complex than retailing because it involve production as well as selling and administration * The emphasis is on the gathering of costs and the recording of expenses. Cost and decision making * Inventory valuation‚ the cost of manufacturing finished goods and goods still in production needs to be determined so that these costs can be used in preparing the income statement and balance sheet. * Profit determination
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