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كورس CMA PART 1 - الوحدة 8

cma course part 1 :  lectures and some questions about each unit
كورس UNIT 8 : CMA PART 1
MR:amr taison
MR:mohamed cma
MR:desoky kh.
(8.1) Job-Order Costing

1) Use of Job-Order Costing
2) Steps in Job-Order Costing
3) Job-Order Cost Flow Diagram
4) Spoilage, Rework, and Scrap
MR:amr taison
MR:mohamed cma
MR:desoky kh.
(8.2) Process Costing

1) Use of Process Costing
2) Accumulation of Costs
3) Process Costing Cost Flow Diagram
4) Equivalent Units of Production – Basics
5) Equivalent Units of Production – Materials
6) Equivalent Units of Production – Conversion Costs
7) Spoilage in Process Costing
MR:amr taison
MR:mohamed cma
MR:desoky kh.
(8.3) Activity-Based Costing

1) Use of Activity-Based Costing
2) Traditional (Volume-Based) Costing System
3) Traditional-Based Systems vs. Activity-Based Systems
4) Steps in Activity-Based Costing
5) Indirect Cost Assignment Diagram
6) Process Value Analysis
7) Cost Drivers
8) Advantages and Disadvantages of Activity-Based Costing
9) Organizational Benefits
MR:amr taison
MR:mohamed cma
MR:desoky kh.
(8.4) Life-Cycle Costing

1) Life-Cycle Approach
2) Potential Benefits
3) Life-Cycle vs. Other Costing Methods
4) Internal and External Reporting Effects
5) Evaluating Management
G.2020G.2022mr.amro taison
6.18.1lec. 12
6.28.2lec. 12
6.38.3lec. 13
6.48.4lec. 13
Some Questions about unit 8
1- What is the use of job-order costing?
Job-order costing is concerned with accumulating costs by specific job
2- What are the steps of job-order applying?
1) Receipt of a sales order from a customer
2) The sales order is approved and the production order is issued
3) Costs are recorded by its classification, (direct materials - direct labor - and manufacturing overhead)
4) Transfer all costs to finished goods after the job order is completed
5) the appropriate portion of the cost is transferred to cost of goods sold after selling the products
3- How is the application rate calculated?
Application rate = Estimated total manufacturing overhead ÷ Estimated total quantity of allocation base
4- How is the (Amount overhead applied) calculated?
Amount overhead applied = Total quantity of allocation base × Application rate
5- What is rework?
The units that unacceptable but it can be repaired and sold as acceptable units.
6- What is scrap?
Scrap is those materials that remain at no cost, and have low sales value. The company may recognize it as income (cash debit, credit income) at the time of sale.
7- What is the use of Process costing?
Process cost accounting is used for allocating costs for inventoriable goods or services. It can be applied to relatively homogeneous products that are mass-produced and continuously
8- What are the equivalent units of production?
EUP are the number of complete units that could have been completly produced using the inputs consumed during the period.
9- How units in beginning WIP can be calculated?
Units transferred out
+ Ending WIP
– Units started
= Beginning WIP
10- How the units started and completed can be calculated?
Units started out– Beginning WIP = Units started and completed
Units started – Ending WIP = Units started and completed
11- How the Units in ending WIP can be calculated can be calculated?
Beginning WIP
+ Units started
– Units transferred out
= Ending WIP
12- What is the definition of activity-based-costing?
Activity-based costing (ABC) is a method used for assigning overhead and indirect costs to products and services.
By using the cost driver rate (cost pool total ÷ cost driver), the company can calculate the amount of overhead and the amount of indirect costs related to a particular activity.
13- What is traditional (Volume-Based) costing system?
Under the traditional costing system, the average cost was inaccurately distributed over the products because the products don’t use an equal amounts of these costs, so there were products taking costs less than the actual and other products taking costs more than the actual, but the traditional costing systems were integrating these costs together (total cost), and distributed to them,(total products) so these methods were inaccurate to determine the exact amount of unit cost
14- What are the steps in activity-based costing?
1) Activity Analysis
2) Assign Resource Drivers to Resource Costs
3) Allocate Resource Costs to Activity Cost Pools
4) Allocate Activity Cost Pools to Final Cost Objects
15- What is Process Value Analysis?
The application of the activity-based costing (ABC) system requires an analysis of the company's production processes, which is a sufficient understanding of all the processes that occur from the beginning of the production process to completion.
16- What are the advantages and disadvantages of activity-based costing?
* Advantage: product costing is improved , by making a better decision
* Disadvantage: the higher cost of implementation and the more time and effort needed
17- What is life cycle approach?
Life cycle approach estimates a product’s revenues and expenses over the entire sales life cycle of product.
18- What are the five phases of product life cycle?
1) research and development phase
2) introduction phase
3) growth phase
4) maturity phase
5) decline phase
19- What is target costing?
Target costing is calculating of product price by adding the desired unit profit margin to the total cost of unit. It is considered an adjunct concept of target pricing.
20- What is the difference between value-added activity and non- value-added activity?
Value-added activity contributes an additional value or satisfaction to the customer, or need of the entity, but non-value-added activity does not
mohamed ashry


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