Questions from Management Accounting

Q: ‘We treat spoiled units as fully completed regardless of when the

‘We treat spoiled units as fully completed regardless of when the spoiled units are detected. This method makes unit costing much simpler.’ What is wrong with this approach?

Q: In a continuous processing situation (such as an oil refinery),

In a continuous processing situation (such as an oil refinery), the beginning and ending WIP inventories are frequently the same. How does this simplify determination of equivalent units completed?

Q: Although process costing appears to use precise measurements, it requires several

Although process costing appears to use precise measurements, it requires several estimates. Discuss where judgement is needed in collecting information for process costing.

Q: Suppose the percent completion of ending WIP is overestimated at the end

Suppose the percent completion of ending WIP is overestimated at the end of year 1. How does this measurement error affect the process costing results in year 1 and year 2?

Q: A department within a processing operation has some finished units physically on

A department within a processing operation has some finished units physically on hand. Should they be counted as completed units or as ending inventory in the department? Explain.

Q: Paul’s Valley Protection Service has three support departments (S1, S2

Paul’s Valley Protection Service has three support departments (S1, S2 and S3) and three operating departments (P1, P2, and P3). The direct costs of each department are $30Â&nb...

Q: Software Plus Ltd produces flight and driving simulations and games for personal

Software Plus Ltd produces flight and driving simulations and games for personal computers. The company's president has a complaint about the accounting for support department costs. He points to the...

Q: List three types of internal reports and explain how each is used

List three types of internal reports and explain how each is used. List three types of external reports and explain how each is used.

Q: Direct, step-down, and reciprocal methods; assign costs

Direct, step-down, and reciprocal methods; assign costs to departments. Cost information for Lake County Library is as follows. In addition to directly traceable costs, the library incurred $24,000...

Q: Kovacik manufactures two types of piggy banks in two different departments:

Kovacik manufactures two types of piggy banks in two different departments: a kangaroo-shaped piggy bank and a platypus-shaped piggy bank. The plant is highly automated and contains only two other dep...