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    Final Exam Cost Accounting

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    Nathan Autumn
    The document provides a review of key areas to focus on in preparing for the final exam for an accounting cost accounting course. It outlines three main chapters to focus on: process costing, spoilage, and determining how costs behave. For process costing, it emphasizes understanding equivalent units and being able to work through problems using weighted average and FIFO methods. For spoilage, it defines different types and how to account for them. For determining how costs behave, it discusses cost functions and different estimation methods.

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    Final Exam Cost Accounting

    Uploaded by

    Nathan Autumn
    577 views2 pages
    The document provides a review of key areas to focus on in preparing for the final exam for an accounting cost accounting course. It outlines three main chapters to focus on: process costing, spoilage, and determining how costs behave. For process costing, it emphasizes understanding equivalent units and being able to work through problems using weighted average and FIFO methods. For spoilage, it defines different types and how to account for them. For determining how costs behave, it discusses cost functions and different estimation methods.

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    Coast Accounting at UConn

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    The document provides a review of key areas to focus on in preparing for the final exam for an accounting cost accounting course. It outlines three main chapters to focus on: process costing, spoilage, and determining how costs behave. For process costing, it emphasizes understanding equivalent units and being able to work through problems using weighted average and FIFO methods. For spoilage, it defines different types and how to account for them. For determining how costs behave, it discusses cost functions and different estimation methods.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    577 views2 pages

    Final Exam Cost Accounting

    Uploaded by

    Nathan Autumn
    The document provides a review of key areas to focus on in preparing for the final exam for an accounting cost accounting course. It outlines three main chapters to focus on: process costing, spoilage, and determining how costs behave. For process costing, it emphasizes understanding equivalent units and being able to work through problems using weighted average and FIFO methods. For spoilage, it defines different types and how to account for them. For determining how costs behave, it discusses cost functions and different estimation methods.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    ACCOUNTING 3221

    COST ACCOUNTING
    REVIEW FOR FINAL TEST
    Below are the key areas of focus in preparing for Test3 (the Final Exam). The bulk of the test
    will be based on the lectures, discussions, homework assignments, and in-class exercises.
    .
    Chapter 17 - Process Costing

    Process Costing
    o Assigns costs equally to similar units within a particular time period
    o Used when 1) Units dont differ 2) Cycle time is short 3) production process is
    continuous
    Understand concept of
    o Equivalent units
    o Characteristics of material versus conversion
    Be able to work through the process steps either under Weighted Average or FIFO
    methods which include:
    o Cost identification for beginning inventory incurred in the prior period and costs
    incurred during the current period.
    o Determination of physical units and equivalent units
    o Determine unit cost by dividing cost by the total equivalent units
    o Assign the costs based on equivalent units and unit rates to either ending
    inventory or transfer out.
    Know journal entries and account posting for the different process cost scenarios.
    Be able to handle problem with transfer of costs and product from one department to
    another (two stage process).

    Chapter 18 Spoilage

    Spoilage: Units that do not meet standards and are discarded with little or no disposal
    value
    o Normal: Considered a normal part of production (Product Cost)
    o Abnormal: Not considered a normal part of production (Period Cost)
    Rework
    o Units that do not meet standards but can be repaired and sold as good units
    Scrap
    o Material that is left over and has a relatively low sales value
    Rework for a specific job
    o Additional costs charged to the specific job
    Rework common to all
    o Additional costs incurred are charged to manufacturing overhead
    Abnormal rework
    o Additional costs are charged to a loss account (Loss from abnormal rework)

    Scrap Sale if immaterial


    o Relatively small and is sold quickly
    o Debit: Cash Credit: Scrap Revenue
    Scrap linked to specific job
    o Debit: Cash Credit: WIP (Job #)
    Scrap common to all jobs,
    o Debit: Cash Credit: Manufacturing Overhead
    Scrap returned to storeroom
    o Debit: Materials Inventory Credit: WIP Job #
    Scrap sold
    o Debit: Cash Credit: Materials Inventory
    Scrap reused
    o Debit: WIP Credit: Materials Inventory
    Chapter10 Determining How Cost Behave

    Cost Function: Mathematical description of how a cost changes with changes in the level
    of an activity relating to that cost
    o Used to estimate fixed and variable costs
    o Assumptions: 1) Costs are linear 2) Costs have a single cost driver
    Cause & Effect Criterion: Most important issue in estimating a cost function
    o There may be a correlation between two variables without there being a cause &
    effect relationship
    Cost Estimation Methods
    o Industrial Engineering: Analyze relationship between inputs and outputs in
    physical terms
    o Conference: Estimates cost functions on the basis of analysis and opinions about
    costs and their drivers
    o Account Analysis: Estimates cost functions by classifying cost accounts as either
    variable, fixed, or mixed
    o Quantitative Analysis: Utilizes formal mathematical models
    Y = dependent variable
    X = independent variable/cost driver
    A = fixed cost
    B = variable cost
    High/Low
    o Simple to do by hand
    o Uses only 2 data points
    o May not be representative of reality
    Regression
    o Difficult to calculate by hand
    o Simple using excel
    o Can use to evaluate whether a cost driver is good or bad

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