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كورس CMA PART 1 - الوحدة 9

cma course part 1 :  lectures and some questions about each unit
كورس UNIT 9 : CMA PART 1
MR:amr taison
MR:mohamed cma
MR:desoky kh.
(9.1) Joint Product and By-Product Costing
1) Joint vs. Separable Costs
2) Joint Cost Allocation
3) Physical-Measure-Based Approach
4) Market-Based Approaches
5) Accounting for By-Products
6) Sell-or-Process-Further Decisions
MR:amr taison
MR:mohamed cma
MR:desoky kh.
(9.2) Overhead Allocation and Normal Costing
1) Components of Manufacturing Overhead
2) Variable and Fixed Components
3) Selecting an Allocation Base
4) Calculating the Application Rate
5) Departmental vs. Plant-Wide Rates
6) Time Frame for Calculating Application Rates
7) Recording Actual Overhead Costs
8) Allocating Overhead to Work-in-Process
9) Over- and Underapplied Overhead
MR:amr taison
MR:mohamed cma
MR:desoky kh.
(9.3) Allocating Service Department Costs
1) Reasons for Allocation
2) Direct Method
3) Step (Step-Down) Method
4) Reciprocal Method
5) Single-Rate vs. Dual-Rate Allocation
G.2020G.2022mr.amro taison
7.39.1lec. 14
7.4,59.2lec. 15
7.6,79.3lec. 15
Some Questions about unit 9
1- What are the separable costs?
Separable costs are the costs that incurred beyond the split-off point, (once they can be identified with a particular joint product and allocated to a specific unit of output).
2- What are By-products?
By-products are the products of a small value that are produced simultaneously from a common manufacturing process of producing a greater value and quantity products (joint products)
3- What is the physical-unit method based on?
This method allocates the cost of joint production to each product based on their relative proportions of the measure selected.
4- What is the estimated NRV method based on?
This method is based on the relative market values of the products.
5- What is the sales-value at split-off method based on?
This method is based on the relative sales values of the separate products at split-off.
6- What is the constant-gross-margin percentage NRV method based on?
This method is based on allocating joint costs so that the gross-margin percentage is the same for each product.
7- What is Sell-or-Process-Further Decision based on?
The decision is based on whether the incremental revenue that will be collected, exceeds related cost or not.
8- What are the components of manufacturing overhead?
Manufacturing overhead includes all of manufacturing costs exept direct materials and direct labor, such as
* Indirect materials
* Indirect labor
* Factory operating costs (real estate taxes, insurance, depreciation ...etc).
9- What are the elements of the variable components?
* Indirect material cost (such as welding wire)
* The cost of indirect wages (such as the wages of supervisors)
* As well as factory operating expenses (such as electricity, water, etc.)
* Depreciation expenses in any way that relates depreciation to the quantity of production
10- What are the elements of the fixed components?
The fixed component that must be paid regardless of the quantity of production
* Tax and insurance expenses
* Depreciation, but in any way that does not link the depreciation to the quantity of production
* The cost of spoiled units, but (normal spoilage only), which charged to the cost of goods sold
11- What is time frame for calculating application rates?
When an application rate is determined for each short period, this may lead to incorrect results and an inaccurate distribution of costs. Therefore, no more than one application rate should be determined during the year, because the months in which the production decreases, the cost charged to the unit will increase. But when using only one application rate , applied annually at least once, this leads to clarification of the difference in costs and production level
12- How are actual overhead costs recorded?
During the budget period, actual overhead costs are recorded in the control accounts as they are incurred.
13- How are the overheads allocated to work in process?
At the end of the period, the overhead is applied to work in process based on the actual driver level (for example: actual machine hours x application rate)
14- What are the reasons for allocating service department costs?
The costs related to the service departments; result from an indirect relationship from the support of these service departments to the production departments or to other service departments, these costs cannot be traced to the product, so they must be distributed to the production departments
15- What are the methods of service department allocation?
* Direct method,
* Step-down method
* Reciprocal method.
16- What is the direct method?
It is the simplest method; the cost of the services department is allocated directly to the operating (producing) departments
17- What is the Step-Down Method?
Under the step-down method, some of services costs rendered by service departments are allocated to each other.
18- What is reciprocal method?
This method is the most complex of the other methods, and also the most theoretically sound
Under this method, services rendered by all departments of service to each other are recognized.
19- Why the firms use dual-rate allocation?
Because the dual rate allocation provides more useful information.
mohamed ashry


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