that a company has four units of the same product in its inventory. The units were purchased at increasing costs and in the following sequence: $40, $41, $43, and $44. If the company physically removes and sells the...
that a company has four units of the same product in its inventory. The units were purchased at increasing costs and in the following sequence: $40, $41, $43, and $44. If the company physically removes and sells the...
account for a certain transaction. Example of a Credit Memo Assume that SellerCorp had issued a sales invoice for $800 for 100 units of product that it shipped to BuyerCo at a price of $8 each. BuyerCo informs...
Double-declining-balance method Sum-of-the-years’-digits method Units-of-production method or units-of-activity method Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your...
that a manufacturer has only one product and 80,000 units were manufactured and sold during a recent year. The selling price was $10 per unit. The variable expenses were $4 per unit (consisting of manufacturing costs of...
. A company purchased the following quantities of Product 39JX for its inventory: 20 units at $20 = $400 40 units at $21 = $840 40 units at $23 = $920 The weighted-average cost of Product 39JX is $__________ per unit....
Our Explanation of Inventory and Cost of Goods Sold will take your understanding to a new level. You will see how the income statement and balance sheet amounts are affected by the various inventory systems and cost flow...
In the calculation of the break-even point, the selling price of a product is assumed to be a constant amount per unit. If the selling price is $20 per unit, the break-even calculation assumes that the selling price...
Accounting estimates include the estimated salvage value and the estimated useful life of depreciable assets, estimated percentage of bad debts expense, estimated percentage of units to be repaired or replaced during a...
The proportion of products sold. For example, if a car company sells 100,000 low-profit cars and 400,000 medium-profit cars and 500,000 high-profit trucks, it has a sales mix of 10% + 40% + 50%. If the total number of...
The repeated elimination of products without a corresponding decrease in overhead costs. As a result the amount of overhead allocated to each unit of product increases. If selling prices are increased to cover the higher...
cost (since it is not part of the direct materials or direct labor) and the total cost of the electricity used in the factory will increase when the equipment is used to create more products. There will also be less...
Our Explanation of Standard Costing uses an easy-to-relate to example for illustrating a manufacturer's standard costs and variances. Also provided is a chart which indicates each variance, what it tells you, and where...
Our Explanation of Accounting Principles provides you with clear and concise descriptions of the basic underlying guidelines of accounting. You will see how the accounting principles affect the balance sheet and income...
What is absorption costing? Definition of Absorption Costing Absorption costing (also known as full absorption costing) indicates that all of the manufacturing costs have been assigned to (absorbed by) the units of goods...
How do you reduce a company's break-even point? Definition of Break-even Point The break-even point is the level of sales where a company’s income statement will report exactly zero net income. The level of sales...
of machine hours. A product’s manufacturing cost, consisting of direct materials, direct labor and manufacturing overhead, is used to report the cost of goods sold and also the cost of units in inventory. Therefore,...
from customers for special inspections, handling and storage, the number of components in the units produced, and the number of production machine hours. Manufacturers that want to know the true costs of their products...
What are manufacturing costs? Definition of Manufacturing Costs Manufacturing costs are the costs of materials plus the costs to convert the materials into products. All manufacturing costs must be assigned to the units...
What increases a break-even point? Definition of Break-even Point The break-even point is the volume of sales in units or in dollars that is equal to a company’s total expenses (including the cost of goods sold). In...
of the mixed costs will be on average $__________ for each unit manufactured. 33. If 10,000 units were manufactured, the estimated total of the mixed costs would be $__________. 34. The range of the coefficient, when...
Our Explanation of Inventory and Cost of Goods Sold will take your understanding to a new level. You will see how the income statement and balance sheet amounts are affected by the various inventory systems and cost flow...
Our Explanation of Accounts Receivable and Bad Debts Expense helps you understand the accounting for the losses associated with selling goods and providing services on credit. You will understand the impact on the...
SPIRNCEPIL Unscramble PRINCIPLES RCIPLPSINE Unscramble 2. The __________ unit assumption means transactions of U.S. companies are reported in dollars. MONETARY EORTMANY Unscramble MONETARY MRYANETO Unscramble 3. The...
, 2025 will be $__________. 13. If the equipment is fully depreciated in the year 2033, but is used in the year 2034, the depreciation expense for the year 2034 will be $__________. 14. Depreciation can be computed on...
Our Explanation of Activity Based Costing illustrates how manufacturing overhead costs for a product will differ when costs are allocated using only the number of machine hours, as opposed to being allocated using the...
. The benefit foregone by choosing another course of action is known as the __________ cost. 8. A separable cost occurs __________ the split-off point. Select... after before 9. The allocation of joint costs at the...
, the overhead costs assigned to a product that required one production run of 16,000 units and required 1,000 machine hours will be $__________ per unit of product. 33. Under traditional costing where the $800,000 is...
labor quantity variance. Select... bill budgets efficiency output price rate standard unfavorable usage variable 18. The name of the direct labor price variance. Select... bill budgets efficiency output price rate...
be the same: the asset’s cost. Cost An asset’s cost is the cash equivalent amount paid for the asset plus the necessary costs to get the asset in place and ready for use. The asset’s cost is the maximum total...
EFFICIENCY NEECICFFIY Unscramble 6. When the standard cost is less than the actual cost, the variance is _______________. UNFAVORABLE FROBLVAAUEN Unscramble UNFAVORABLE VUOELFNBRAA Unscramble 7. The standard unit cost...
of the inputs used for the actual products manufactured. Example of Variance Analysis Assume that a company manufactured 10,000 units of product (output). The company’s standards indicate that it should have used...
or number of units sold. The company responsible for paying the sales commissions will report a selling expense. It will also report a liability for any unpaid commissions. The company or person that did the selling...
produces 3,700 units, the depreciation expense will be $3,700. Both of these depreciation calculations are logical, consistently applied, and objective. Join PRO to Track Progress Mark the Question as Read Must-Watch...
What is job order costing? Definition of Job Order Costing Job order costing or job costing is a system for assigning and accumulating manufacturing costs of an individual unit of output. The job order costing system is...
for Allocating Manufacturing Overhead to Products US GAAP and US income tax regulations require manufacturers to assign variable and fixed manufacturing costs to the products they manufacture so that the units in...
others, if a greater proportion of the lower contribution margin items are sold, the company will need to sell more units, thereby increasing the company’s break-even point. Join PRO to Track Progress Mark the...
, employees, lenders, and others. Monitoring the inventory levels (total amount and individual items) may result in: Reducing the number of units purchased or produced to match lower customer demand Reducing the number...
What is a fixed budget? Definition of Fixed Budget A fixed budget is a budget that does not change or flex for increases or decreases in volume. (“Volume” could be sales, units produced, or some other activity.) A...
of $0 on an income statement prepared using the accrual method of accounting. The break-even point expressed in dollars of revenues is calculated by dividing the company’s total fixed expenses for the accounting...
method. Typically the traditional method meant allocating the manufacturing overhead costs on the basis of the number of units of output, the direct labor hours, or the production machine hours. Allocating the many...
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