E15.22) Supplier Activities Classify the following supplier-related activities as either unit level, order level or supplier level: 1. Extra machine set-ups due to late receipt of material from supplier 2. Additional production salaries caused by late delivery of components from a supplier 3. Damage to production equipment due to faulty materials 4. Costs of managing the relationship with a supplier 5. Inspecting material delivered from a supplier Costs of storing raw materials purchased from a supplier

E15.22) Supplier Activities Classify the following supplier-related activities as either unit level, order level or supplier level: 1. Extra machine set-ups due to late receipt of material from supplier 2. Additional production salaries caused by late delivery of components from a supplier 3. Damage to production equipment due to faulty materials 4. Costs of managing the relationship with a supplier 5. Inspecting material delivered from a supplier Costs of storing raw materials purchased from a supplier

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which of the following is NOT included in the flow of costs of a manufacturing company? Select the correct response: Purchase of Raw Materials Factory Overhead Not Charged to the Job Distribution of Factory Labor Factory Labor Incurred
23. Which of the following costs is relevant to a make-or-buy decision of a particular part of a product? a.The direct labor costs used to manufacture the part b.The depreciation on the plant used to manufacture the part c.The fixed annual rent paid for the office building d.The salary of the sales manager who sells the product
Number the following in the order of the flow of manufacturing costs for a company: a. Closing under/overapplied factory overhead to cost of goods sold b. Materials purchased c. Factory labor used and factory overhead incurred in production d. Completed jobs moved to finished goods e. Factory overhead applied to jobs according to the predetermined overhead rate f. Materials requisitioned to jobs g. Selling of finished product h. Preparation of financial statements to determine gross profit
The basis used for allocating manufacturing overhead (such as machine hours or direct labor hours) should closely align with O a. estimation techniques used in other areas of financial reporting. O b. the GAAP rules for allocating overhead. O C. the incurrence of overhead costs. d. the way that competitors allocate overhead.
?Which of the following costs is not related to a batch-related activity .Compliance costs .a O .Machine setups .b O .Shipping costs .c O „Material handling .d O
f) ‘Process costing is a term used in cost accounting to describe one method for collecting and assigning manufacturing costs to the units produced.’ There are some statements about the process costing: An abnormal loss occurs when expected output exceeds actual output. The scrap value of an abnormal loss is credited to the process account. The allocated cost of an abnormal gain is credited to the process account. The inputs to a process less the normal loss is the expected output. The normal loss in a process is allocated a cost in order to reconcile the costs of inputs and outputs. The FIFO method assumes opening WIP is the first group of units to be completed. Therefore, opening WIP is charged separately to completed production and CPU is based on current period costs. Required: Please identify which of the above statements are false and explain the reasons.
Which of the following is correct with respect to closing out underapplied 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 the same under either method . b . The balance in the Work-inProcess account after allocation will be higher if the underapplied overhead is closed out by allocating it to all appropriate accounts . c. None of given answer is correct . d. Operating income will be higher if all of the underapplied overhead is closed out to Cost of Goods Sold . e. Cost of Goods Sold will be higher if the underapplied overhead is closed out by allocating it to the inventory accounts as well as to Cost of Goods Sold
Which of the following is correct with respect to closing out underapplied manufacturing overhead to Cost of Goods Sold versus closing it out to Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold? Select one: O a. The balance in the Work-in-Process account after allocation will be higher if the underapplied overhead is closed out by allocating it to all appropriate accounts. O b. Cost of Goods Sold will be higher if the underapplied overhead is closed out by allocating it to the inventory accounts as well as to Cost of Goods Sold. Oc. None of given ANSWER is correct. O d. Operating income will be higher if all of the underapplied overhead is closed out to Cost of Goods Sold. O e. The balance in the Work-in-Process account after allocation will be the same under either method.
‘Process costing is a term used in cost accounting to describe one method for collecting and assigning manufacturing costs to the units produced.’ There are some statements about the process costing: An abnormal loss occurs when the expected output exceeds actual output. The scrap value of an abnormal loss is credited to the process account. The allocated cost of an abnormal gain is credited to the process account. The inputs to a process less than the normal loss are the expected output. The normal loss in a process is allocated a cost in order to reconcile the costs of inputs and outputs. The FIFO method assumes opening WIP is the first group of units to be completed. Therefore, opening WIP is charged separately to completed production, and CPU is based on current period costs. Required: Please identify which of the above statements are false and explain the reasons.
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? 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. a. b. None of given answer is correct. С. 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. d. Operating income will be higher if all of the overapplied overhead is closed out to Cost of Goods Sold. e. The balance in the Work-in-Process account after allocation will be the same under either method. Clear my choice
Under variable costing, which of the following costs would not be included in finished goods inventory? a. electricity used by factory machinery b. steel costs for a machine tool manufacturer c. salary of factory supervisor d. wages of machine operator
Which of the following is correct with respect to closing out underapplied manufacturing overhead to Cost of Goods Sold versus closing it out to Work- in-Process Inventory Finished Goods Inventoryand Cost of Goods Sold? a Cost of Goods Sold will be lower if the underapplied overhead is closed out by allocating it to the inventory accounts as well as to Cost of Goods Sold. The balance in the Work-in Process account after allocation will be the same under either method None of given answer is correct. d Operating income will be higher if all of the underapplied overhead is closed out to Cost of Goods Sold. e. The balance in the Work-in-Process account after allocation will be lower if the underapplied overhead is closed out by allocating it to all appropriate accounts.