Gleim Part 1 (Original Edition) pahr9jw7cc9q65h/Gleim__Part_1_pdf. CMA+Handbook+pdf. يوتيوب شرح لل CMA عمرو عبد CMA gleim book part 1 & 2 (Orginal copy) مقسم للينكين. CMA hock book part 2. CMA Students' Portal. E: [email protected] · Online Syllabus - · Foundation Study Syllabus - Intermediate Study Material. Paper-5 Financial.

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Certified Management Accountants (CMA). Course Language. Curriculum & Exam Language: English. Review Course Language: English Supported by Arabic. a) PREFACE FOR CMA PART 1 CANDIDATES The purpose of this book is to help you prepare yourself to pass Part 1 of the two-part CMA examination. Part 1 Question Book CMA Exam - Ebook download as PDF File .pdf), Text File .txt) or read book online. CMA Part 1 exam preparation.

Competition and Markets Authority CMA Background In March , the Competition and Markets Authority CMA provided guidance to Higher Education institutions that provide undergraduate programmes about their obligations to students in terms of consumer regulations, including the provision of up-to-date, accurate programme information, including full costs of programmes. The guidance see link below requires the University to take a number of actions to remain within the law. If we do not meet our obligations, we may be in breach of consumer law and risk enforcement action. In some circumstances, students may also have the right to take legal action against us or seek redress, such as full fee repayment. It was agreed that the main focus for the group was to discuss and implement key actions for the University arising from the CMA guidance and advice document dated March and to oversee the subsequent action plan. The document can be found at: The CMA Advice Task and Finish Group concluded in June with a number of key actions and ongoing workstreams having been identified, which were: Implementation of revised Terms and Conditions. Agreement to bring programme approval, amendments and withdrawal dates forward to 31 March for taught programmes. To establish a group to consider the data requirements for collating, sharing and publishing unit information, in response to the UNIAC report on published unit information, to report by January Key Achievements Development of a comprehensive communication plan. Development and implementation of an online training module specifically for staff in roles that generate published information for students. This review is being led by TLSO to enhance current existing good practice. There are some further useful weblinks below to information regarding CMA work and specifically around what has been done here at Manchester:.

If the sales value at splitoff method is used to allocate joint costs to the final products. The three products are sold after further processing as there is no market for any of the products at the split-off point. Gummo and Xylo. No effect.

Fitzpatrick uses the net realizable value method to allocate the joint material costs. Each batch in the joint manufacturing process yields 5. If Zinten is produced. Operating Income No effect. The spoilage was incurred on Job No.

The resulting 3. Not enough information to judge. The company is debating whether or not to process Xylo further into a new product.

Unit Manufacturing Cost Increase. Each batch of Xylo yields 2. The annual budgeted overhead in dollars was a. The budgeted overhead for each department and the data for one job are shown below. A total of During the month of October. During October. Krause uses the weighted-average process-costing method. Inventory as of October 31 consisted of 3. Krause Chemical Company had the following selected data concerning the manufacture of Xyzine. Direct materials and conversion costs are incurred evenly during the production process.

The weighted-average inventory cost per unit completed in October was a. Production Flow Completed and transferred to the next department Add: The total raw material costs in the ending work-in-process inventory for December is a.

Both normal and abnormal spoilage costs would be written off as an expense of the period. Normal spoilage costs would be added to the cost of the good units completed during the period. Both normal and abnormal spoilage cost should be charged to a separate expense account. Normal spoilage cost should be charged to good units and abnormal spoilage cost should be charged to a separate expense account.

In contrast. Both normal and abnormal spoilage costs should be charged to good units. Normal spoilage costs should be charged to a separate expense account and abnormal spoilage cost should be charged to good units. Both normal and abnormal spoilage costs would be added to the cost of the good units completed during the period.

Normal spoilage costs would be allocated between the cost of good units completed during the period and the ending work-in-process inventory. The inspection as of June 30 revealed the following information for the month of June. Good units completed Normal spoilage units Abnormal spoilage units During the month.

Beginning work-in-process inventory for the current month was Units Transferred As part of production. The number of units that Southwood would transfer to its finished goods inventory and the related cost of these units are a.

There were no lost or spoiled units. Assuming no spoilage.

Conversations with plant personnel reveal that. All materials are introduced at the start of manufacturing.

Materials Conversion cost Total beginning work-in-process inventory Materials Conversion cost Total production costs.

October Production completed Work-in-process. The company started Materials May 1 The total conversion cost assigned to units transferred to the next department in December was a. Krause uses the firstin. The equivalent units of production used to calculate conversion costs for December was a. Material B is added at two different points in the production of shirms.

Machine setups. At the end of the quarter. Robotics painting. Plant cafeteria. Jones has the following unit information for the month of August.

Units Beginning work-in-process inventory. Material handling. With respect to Material B. The company a. Budgeted overhead spending for the departments is as follows. Pelder has computed the manufacturing cost of the x-ray and ultra-sound products by adding together direct materials. The factory has three overhead departments that support the single production line that makes both products.

The two products are based upon different technologies. Barry White. The muffins have a higher profitability as a percentage of sales and. The firm has long assessed the profitability of a product line by comparing revenues to the cost of goods sold.

The budgeted overhead costs are shown below. Which one of these two methods will likely result in the use of a greater number of cost allocation bases and more accurate costing results?

Data with regard to these products are given below. Product A Product B Units produced and sold Machine hours required per unit Receiving orders per product line Production orders per product line Production runs Inspections The firm is studying a change to either allocating overhead by using departmental rates or using activity-based costing ABC. Young can use a plantwide rate. All production costs approach those costs that were budgeted.

The sales mix does not vary from the mix that was budgeted. All ending inventory balances are zero. Young will produce many types of products in its single plant. All manufacturing overhead is a fixed cost. In which one of the following independent situations would reported net income for the first year be the same regardless of which overhead allocation method had been selected?

Using the departmental overhead application rates, and allocating overhead on the basis of direct labor hours, overhead applied to Job in the Tooling Department would be a.

If factory overhead is to be applied per direct labor hour, how much overhead will be applied to a job incurring 20 hours of direct labor? Which of the following statements would apply to the situation at Henry? The use of direct labor hours seems to be appropriate.

Henry will lack the ability to properly determine labor variances. Henry has likely reduced its ability to quickly cut costs in order to respond to economic downturns. Based on the divisional data presented below, which one of the allocation bases for common company expenses would likely have the least negative behavioral impact on the Financial Consulting Division manager? Product A Product B Units produced and sold Machine hours required per unit Receiving orders per product line Production orders per product line Production runs Inspections.

Total budgeted machine hours are , Receiving costs Engineering costs Machine setup costs Inspection costs Total budgeted overhead. The cost driver for engineering costs is the number of production orders per product line. Using activity-based costing, the engineering cost per unit for Product B would be a. The dual-rate cost-allocation method is most useful when a. To accomplish this, legal department costs should be a. Which one of the following departmental allocations is present in the reciprocal method of departmental allocation?

The costs of the a. The support departments service each other as well as the two production departments. Direct and reciprocal methods only. In allocating service department costs to the operating departments. Direct method only. The service departments include Maintenance. Information Systems Department are allocated to the Machining Department and the costs of the Machining Department are allocated to the Assembly Department. It has three production departments. Information Systems Department are allocated to the Personnel Department.

Direct and step-down methods only. Machining Department. Material Handling. John Baker. Personnel Department are allocated solely to the Information Systems Department. If the company adopts this new policy. Company studies have shown that the Personnel Department provides support to a greater number of departments than the Information Systems Department. Step-down and reciprocal methods only. Information Systems Department would be allocated to the Personnel Department.

The support departments provide services to the operating departments as well as to the other support departments. The method of allocating the costs of the support departments that best recognizes the mutual services rendered by support departments to other support departments is the a.

Personnel Department would be allocated to the Information Systems Department. Some of the costs of the a. If Wilcox uses the step-down method of departmental allocation. Personnel Department would be allocated to the Assembly Department.

Assembly Department. The overhead costs of the Systems Department are allocated to other departments on the basis of computer usage hours. Other information pertaining to Logo is as follows. The overhead costs of the Facilities Department are allocated based on square feet occupied in thousands. Machining Department would be allocated to the Information Systems Department. If Wilcox uses the direct method of departmental allocation.

Information Systems Department would be allocated to the Assembly Department. Assembly Department would be allocated to the Machining Department. Company studies have shown that the Personnel Department provides support to a greater number of departments than does the Information Systems Department.

Presario will likely a. Reworking defective goods to bring them up to quality standards. Conventional financial statements would be prepared along with a set that is totally consistent with value-chain analysis.

Product cost. Research and development. Spend money to eliminate the bottleneck. Change the throughput of operations. Apply activity-based management to solve the problem. Setting up a machine related to a new production run. How would customer service costs be treated in the two statements? Painting newly-manufactured automobiles. The activities that would be classified as value-added activities are a. Focus their efforts on constraint identification.

Moving completed production to the finished goods warehouse. Production design. I and III only. Non-product cost. Conducting the final assembly of wooden furniture. Internal control mechanisms are often disassembled. Which of the following benchmarking techniques would be appropriate in this situation?

2015 Part 1 Question Book CMA Exam

A comparison of the practices of Retail Partners to those of Discount City. An in-depth review of a retail trade association publication on successful electronic data interchange applications. I and II only. It results in heavier maintenance for legacy systems.. I and IV only. The focus is. II and IV only. A comparison of the practices of Retail Partners to those of Capital Airways.

CMA Part 1

It often results in a decreased use of centralized data bases. Equipment maintenance cost. Product testing cost. Rework cost. Warranty claims cost. Methods of data processing. The cost to inspect units produced. Which one of the following recognizes these two factors? The warranty repair costs. Reasonable assurance. Section E: Internal Controls The cost to rework defective units. Management responsibility. Product testing. Distribution of paychecks directly to each employee by a representative of the Human Resource department.

ED1b LOS: A mail clerk opening the mail compares the check received with the source document accompanying the payment.

Computer programmer. The General Ledger clerk compares the summary journal entry.

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Systems analyst. Department manager. At the end of the week the Cashier prepares a deposit slip for all of the cash receipts received during the week. Distribution of paychecks directly to each employee by the payroll manager. Delivery of the paychecks to each department supervisor. Data control group. Congress was to a. Policies of strong internal control and punishments for unethical behavior.

Follow-up on actions noted in audit findings is not required of internal auditors. Employee training. Hiring ethical employees. The understandability of audit reports is the responsibility of internal auditors. Policies of strong internal control. Internal auditors are expected to comply with standards of professional conduct. Internal auditors are responsible to service the organization.

Cost Variance Analysis.

Operational audit. Joint cost allocations. Information systems audit. Flexible Budgets. Compliance Audit. Financial audit.

Activity-based management. Compliance audit. Independent audit. Management Audit. The accounts receivable clerk prepares and enters data into the computer system and reviews the output for errors. The data control group reviews and tests procedures and handles the reprocessing of errors detected by the computer. The systems analyst designs new systems and supervises testing of the system.

The computer operator executes programs according to operating instructions and maintains custody of programs and data files. Operating system. Batch system. Gantt chart. When a given batch of files has been reviewed and corrected. Verification clerks then check the computerized record with the original shipping orders. Decision support system.

The most effective way to visualize and understand this set of activities would be through the use of a a. A data entry operator scans the shipping order information onto a hand-held data storage device. The information flow begins when the shipping department sends a copy of a shipping order to the data entry staff.

Online system. Correct answer d. The annual report to shareholders is prepared in accordance with generally accepted accounting principles and is designed to provide information that is pertinent to investors and other external users. Managers responsible for operating activities use internal reports designed to provide information about various aspects of internal functions that measure the effectiveness and efficiency of operations.

Correct answer b. Decreases in current liabilities such as accounts payable and income taxes payable are deducted from net income when determining cash flow indicating that cash was used to decrease the balances in these accounts. Correct answer a. This is shown on the Cash Flow Statement as flows from operating activities. All of the other characteristics listed can be determined from the Statement of Financial Position.

The payment of dividends is a financing activity and should be presented as a cash outflow in that section of the Cash Flow Statement. Available-for-sale securities are considered an investment, and therefore the sale would be presented as an investing activity on the statement of cash flows.

This transaction would be presented as a non-cash financing and investing activity as the full amount of the acquisition cost was mortgaged. Changes in current assets and current liabilities are presented as operating activities on the Cash Flow Statement. The other transactions listed are investing or financing activities. The quality of the earnings reported for the enterprise cannot be determined from the Income Statement and is therefore a limitation of that statement.

All of the other characteristics listed refer to limitations of the Statement of Financial Position. The two methods used to calculate the cash flow from operating activities are the direct method and the indirect method.

The indirect method is used more frequently that the direct method. The direct method of calculating cash flow from operating activities presents major classes of operating cash receipts less major classes of operating cash disbursements. Correct answer c. The sale of a fixed asset for less that book value will decrease net profit as the loss on the sale will be recognized on the Income Statement. All other measures listed would be affected by the change to the recording of the lease.

Both the payment of dividends and the redownload of Atwater stock are financing activities.

The dividend payment is a financing activity and the equipment download is an investment activity. Net income Depreciation expense Increase in payables Increase in receivables Increase in tax liability Cash flow. Net income Decrease in receivables Increase in inventory Depreciation expense Decrease in payables Gain on equipment sale Cash flow.

Net income Increase in receivables Decrease in inventory Increase in payables Depreciation expense Gain on securities sale Cash flow. Cerawell has some control over the other alternatives presented. One of the few advantages of top-down budgeting is that it is less timeconsuming than participatory budgeting as there is little need for discussion and compromise. Practical standards are developed under actual working conditions and are.

Budgeted costs are generally presented as total costs as one of the objectives of budgeting is to forecast the overall financial condition. Those closest to operations should participate in budget development as they are most knowledgeable and can supply reliable information on which to base the budget.

The involvement of all those affected in the development of standard costs is the team development approach. A change in estimate for bad debts should be treated as affecting on the period of the change. Budget preparation forces management planning.

Correct answer d.. Cerawell has no control over the actions of its competitors. Changes in estimates are viewed as normal recurring corrections and retrospective treatment is prohibited.

A budget that is not supported by top management has very little chance of success as subordinates will attach little importance to the budget and will focus on what management does consider important. The alternative answers presented generally include those who are not operationally involved. Standard costing traces direct costs to a cost object.

Participation in budget preparation at all levels promotes acceptance of budgets and allows those who have to implement plans to participate in the planning process. Ideal standards are those achieved under ideal working conditions and are. Simple regression analysis estimates the relationship between the dependent variable and one independent variable while multiple regression analysis estimates the relationship between the dependent variable and two or more independent variables.

Standards that reflect current experience are realistic and will provide the best information for decision making.

The price agreed upon by the downloading manager and the appropriate level of company management is the most reasonable selection as it takes into consideration actual experience and future plans for requiring the component.

Learning curve analysis is a function that shows how labor hours per unit decline as units of production increase due to workers learning and becoming better at their jobs. Using linear regression. With a significant change in labor productivity. Average hrs. Unit 2 8. Batch 4 Batch 8 Average hrs. Unit 1 Unit 2 Unit 4 Unit 8 In the cumulative average-time learning model. Batch 1 Batch 2 Batch 4 Hours for next 12 units Ranking is B: Recommend Vendor S which has the least cost initial download plus the cost of failure as shown below.

Increased units sold Increased profit For both actions. Incorporating non-financial as well as financial measures is beneficial to an organization. The revenue or sales budget provides the foundation for a master budget and is therefore prepared first.

These statements combined with the budgeted income statement produce the Statement of Cash Flows. The other alternatives given are disadvantages or misuses of traditional budgets. The production budget and the downloads budget must be completed before the cost of goods sold budget can be completed. Flexible budgets are based on actual output rather than comparing output to a static budget.

The production budget is dependent on the amount of projected sales and the direct material budget is based on the forecasted production quantity. Alternative 1 has the highest expected value as shown below.

A financial budget consists of the capital expenditure budget. An administrative budget may also be dependent on the planned sales and manufacturing activity and is generally completed after all production revenues and costs have been budgeted. Flexible budgets make it easier to identify realistic positive and negative variances. Flexible budgets are based on the output actually achieved and therefore provide a realistic comparison of budgeted and actual revenue and costs.

Recommend downloading The zero-based budgeting approach looks at operations as if they were just beginning and requires justification for all revenues and expenditures. Production for 2nd quarter Production for 3rd quarter Streeter should produce Sales — Beg. Ming should plan to produce 7. Flexible budgets are based on the output actually achieved or expected rather than a static amount.

August September The units to be downloadd in February total 6. Laminated putter head cost: Rombus should produce 3. Beginning finished goods inventory would have been produced in a prior period and. Swan needs to download The number of shoes to be downloadd is The company should download 8.

Freight charges paid for the delivery of raw materials re generally associated with the cost of making a product and not included as part of overhead. The employee taxes withheld and due to be remitted in July is the only item listed that actually affects cash flows in the month of July.

Cash collections Variable costs Step costs Fixed costs Opening balance Accounts receivable Accounts receivable Accounts payable Accounts payable Other expense Cash balance November sales collections December sales collections January sales collections March cash sales March sales collections February sales collections January sales collections Opening balance January collections January expenses Closing balance Less minimum balance Borrowing need Comparison of actual activities to static budget levels is difficult and often misleading.

For flexible budgets. Flexible budgets are preferable for both planning purposes and performance reporting as the flexible budget can be based on the actual amount of output and then compared to the actual revenue and costs.

If a company experiences an increase in sales volume. Fixed costs are expected to remain the same over the relevant range and. The use of a standard cost system has several benefits but they are generally based on quantitative factors and not qualitative characteristics.

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A static budget is based on the level of output planned at the start of the budget period and does not change no matter what the level of actual output. A static budget is based on projected output while a flexible budget is based on actual output. The time savings of management by exception arises in potentially investigating fewer variances. Material usage and labor efficiency usage are likely to be related.

With a single supplier. Efficiency variances are sometimes referred to as usage variances and measure quantity used. The standard material price should be increased. The conclusion regarding the operating income is correct but the variance information could be more specific. Actual hours: Wage rate: The use of management by exception reporting requires the same amount of advanced planning as any other type of variance reporting.

Price variance Lower-skilled labor could also affect the material quantity variance negatively. The actual direct labor hours used by Lee Manufacturing is Efficiency variance: A favorable direct labor price variance could indicate that lower-skilled labor is being used that what was planned. Price per unit downloadd: Standard price per unit: download price variance This could lead to unfavorable labor use and material usage variances that more than offset the favorable price variance.

The use of lower-skilled labor is not likely to lead to a favorable direct labor efficiency variance but is more likely to cause this variance to be unfavorable. The efficiency variance shows how the number of direct labor hours used varies from the standard number of direct labor hours.

If variable overhead is applied on the basis of direct labor hours and the number of direct labor hours used is favorable. Employees in the Shipping Department have nothing to do with the amount of material used in the production process. The rate variance will show how the price paid for direct labor varies from the standard price.

All of the other answers could affect the quantity of material used. The overtime required should not be charged to the Production Department as the manager would then be inclined to reject the order as not beneficial to the department goals. The spending variance is the difference between actual and budgeted rates times the actual base input. downloading because of the delay in ordering the materials.

By indicating the standard usage is 3. A sales team is generally only accountable for sales dollars. Unfavorable material usage variances are generally caused by inferior materials or lower-skilled workers. Unfavorable usage variances shown that more material than the standard quantity was used.

If corporate and support costs are being allocated to divisions and departments. If the Sales Department operates as a profit center and accepts a rush order. All the departments bear some responsibility for the usage variance: Marketing because the rush order was accepted.

The materials quantity variance does reflect the fact that 1. This allows usage to be properly planned and encourages service providers to be efficient. A fixed overhead volume variance is dependent on quantity.

An unfavorable volume variance means that production was less than planned. The use of budgeted rates and standard hours ensures that all departments know what rates will be charged and how many hours will be charged. Earnings per share depend not only on net income but also on the number of shares outstanding.

The selling and distribution costs will be avoided. Cooper is expected to fill and deliver orders accurately at the least cost to the company. Dual pricing promotes goal congruence. Since the Fabrication Division has excess capacity. A market-based transfer price will motivate the manager of the selling division to be efficient in order to earn the greatest profit or contribution margin.

Negotiation is most likely to ensure that both managers are satisfied with the resultant price. Measuring his performance on the percentage of on-time and accurate orders plus the cost to fill and deliver orders would result in Cooper pursuing the proper goals.

The organization as a whole is unaffected by the internal transfers. Managers generally have no control over the number of shares issued and should not be measured on earnings per share. This pricing structure does not apply to external customers. A transfer price is the price one business unit charges for a product or service supplied to another business unit of the same organization. Selling the product internally allows the division to avoid paying sales commissions and incurring the cost of collections thus justifying a transfer price that is lower than the market price.

The company should use all the categories of performance measurement to ensure that it remains competitive and profitable. The management of the two divisions should negotiate the transfer price. Measuring performance on the total dollars processed would lead to paying attention to those claims with the greatest dollar value and ignoring smaller claims.

Other costs such as promotion and advertising might also be avoided. The number of calls received regarding a new product should be the concern of the product developers. Competitor business strategies are not included. The four perspectives of the balanced scorecard include options b. In order to increase residual income. Without capital restrictions. To focus on both long-term and short-term objectives.

Using residual income as a performance measure means that a business unit should continue to expand as long as projects earn a return in excess of the required rate of return.

Projects B. The division with the highest return on sales actually failed to meet its target return on investment. Morgan is responsible for assisting customers accurately and quickly.

The manager of the Household Appliances Division. A budgeted rate should be established so that all departments know in advance how much they will be charged for actual usage. As long as the project return is above the cost of capital. If the production departments are satisfied. The Repair and Maintenance Department is expected to keep the production equipment in good working order to facilitate keyboard production.

Using this rate also encourages cost control in the Computer Department. Since the system was constructed on the basis of the anticipated number of hours of usage. The variable costs per flight would include fuel, food service, and landing fees. Other costs mentioned such as salaries, depreciation, marketing, and communications would not vary with individual flights. Sales commissions on cars would be part of the cost of the car dealership, not the manufacturer.

Options a and d are direct material costs while option c would be charged to manufacturing overhead. Cost A appears to be semi-variable or mixed as it varies between quantities but does not vary consistently so a portion must be fixed and a portion variable. Cost B is fixed in the relevant range 14, units and Cost C varies consistently for all quantities and therefore must be variable.

The variable cost per unit would remain the same as the volume decreases. All other costs listed would change with a change in volume. Cost B is semi-variable as it varies between quantities but not consistently so a portion must be fixed. Cost C is fixed as it is the same for all quantities. The cost of electricity could be semi-variable with a fixed monthly charge plus a per unit charge for usage.

All other costs listed are either fixed a and d or variable c. The allocation of indirect costs to cost objects would increase total costs identified with products rather than reduce total costs identified. The relevant range is the band of activity or volume over which certain cost relationships such as fixed costs remain valid. If a cost is strictly variable within the relevant range, the unit cost will be consistently the same and will not increase or decrease with a change in volume.

One of the basic assumptions of cost behavior is that a cost can be approximated by a linear cost function within the relevant range. A linear cost function is one in which the graph of total costs versus the level of activity is a straight line. Variable cost: Fixed cost:. Direct material Direct labor Variable overhead Fixed overhead Total product costs.

Variable selling Fixed selling Administrative Fire loss Total period costs. The only difference between actual costing and normal costing is that actual costing uses actual indirect-cost rates while normal costing uses budgeted indirect cost rates.

Therefore, normal costing does not improve the accuracy of job or product costing. Total seconds used Cost per second Cost per T-shirt. The difference between variable and absorption costing is the treatment of fixed manufacturing overhead. All fixed manufacturing overhead is expensed during the period using variable resulting in lower operating income. The difference is the fixed manufacturing overhead that is included in inventory when using absorption costing.

Absorption costing would include factory insurance and direct labor as product costs, expensing only shipping costs as period costs. Variable costing would include only direct labor as product cost and expense the other two costs. Robinson produced 1. It can be argued that this is more appropriate as the fixed costs of equipment. If Troughton manufactures an additional 1. Under absorption costing. Using variable costing. Variable costing. The allocation of common costs to joint products is for financial reporting purposes.

Because fixed manufacturing overhead is included in inventory. As stated in the problem. Joint cost allocation: Cost to process further Total cost Separable production cost method is not a method for allocating joint costs. Joint products generally have a higher sales value than by-products.

Net realizable value: By-products have a lower sales value than do joint or main products. Change in income: Xylo — Zinten sales differential — Additional cost [ 2. Abnormal spoilage is spoilage that should not arise under efficient production conditions and is written off as a loss in the period in which it is detected.

Job overhead Equivalent units: Units transferred out Ending inventory 3. Since material is added at the beginning of the manufacturing process. Unit cost: The equivalent units used to assign conversion costs is The The equivalent units used to assign material costs is Southwood would transfer Normal spoilage is allocated to the units produced during the period while abnormal spoilage is treated as a period cost.

Normal spoilage should be part of the normal cost of manufacturing goods and should be charged to good units produced. Abnormal spoilage. Activity-based costing is an approach to costing that focuses on cost drivers. Units started in August X: It uses these drivers to assign costs to products and services.

Robotics painting would be machine-based and would logically be allocated to products on the basis of machine hours. Total Equivalent Units Beginning WIP Inventory: December units — Ending WIP: Total The other three options would more appropriately be allocated on the basis of direct labor or charged to overhead.

Since it is difficult to assign quantities and costs of items such as screws and glue to specific products. Using activity-based costing. Receiving costs per order: Per unit of Product A: Only in the situation where all overhead costs were expensed. Activity-based costing generally uses a greater number of allocation bases or cost drivers and therefore results in more accurate costing. Homogenous cost pools are those in which all of the costs have the same or similar cause-and-effect or benefits received relationship with the cost allocation base.

Cost of muffin delivery: Cost of cheesecake delivery: Cost per engineering change: Engineering cost per order: The dual-rate cost-allocation method classifies costs in each cost pool into two subcost pools.

Depending on the step-down sequence used. Total budgeted direct labor hours: Overhead cost for 20 hours: If the cost of legal services is allocated on the basis of usage. The factory overhead rate is likely increased as expenses such as depreciation have increased.

Statements II and III are incorrect as machine hours would be more appropriate and Haney will still be able to calculate labor variances. To encourage usage. Allocating service department costs to production departments is most likely to cause production managers to be more careful about the use of services and not request excessive service. The increase in automation makes it more difficult to respond to economic changes as the company cannot simply layoff or hire workers.

Statements I and IV would apply. Tooling overhear per hour: Job overhead: Using the direct method of cost allocation.

The general step-down sequence begins with the support department that renders the greatest amount of service. The reciprocal allocation method allocates costs by explicitly including the mutual services provided among support departments and allows for the full incorporation of interdepartmental relationships. Using the direct method of allocation. Using the step-down method. The reciprocal method of departmental allocation explicitly includes the mutual services provided among all support departments.

Relationships between support departments are not included in the allocation. A company must first locate the source of the production constraint before it can effectively work to increase production capacity. According to the theory of constraints. All of these activities would likely take place prior to production to improve quality and prevent costly errors. Retail Partners would benefit from all of these benchmarking techniques as all would identify best practices.

The use of just-in-time production generally involves developing relationships with a minimum number of suppliers that reliably deliver high quality products. In conventional financial statements. A major disadvantage of business process reengineering is that as processes are changed to be more efficient. And the rest of the members check the CMA answers turn-by-turn. Only then we publish the CMA answers. It opens on all devices conveniently.

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