Question A- Observation (5 marks) Describe, briefly, a Human Resources Process you have worked on or are familiar with. What is the most relevant information you provided to your manager or the owner to make decisions or you believe should be considered? What is a possible crucial component of cost? What type of cost could this be? Question B - Short answer: Fill in the right column with one example of the specified Cost Term such as labour to produce a product". Only the first example will be considered for marks. Bullets are preferred. (10 total marks, 1 mark for each item) Cost Term 1. Factory overhead Indicate a good example of the Cast Term. 2. Indirect cost 3. Cost object 4. Prime cost 5. Conversion cost 6. Variable cost 7. Allocated cost Question B-Short answer: Fill in the right column with one example of the specified Cost Term such as labour to produce a product". Only the first example will be considered for marks. Bullets are preferred. (10 total marks, 1 mark for each item) Indicate a good example of the Cost Term. Cost Term 1. Factory overhead 2. Indirect cost 3. Cost object 4. Prime cost I 5. Conversion cost 6. Variable cost 7. Allocated cost 8. Fixed cost 9. Period cost 10. Corporate cost Question C - Association questions: Match up the first column item to the concept in the final column by inserting the number of the correct matching concept in the blank column. (15 total marks, 1 mark for each answer) Item to consider: # Association: Match Concepts/Comments below to the best related Item (Random order below) Match Association to Item by inserting the correct # below beside the Item Place the matching Association number beside the Item 1. Financial Accounting 1 Selects alternatives to achieve objectives Is mostly future oriented 2. Regulatory Accounting Rules 2 3. Strategy 3 4. Professional Ethics 4 5. Cost-Benefit Approach 5 6. Objectives 6 Is the ethical obligation of accountants responsible for financial information provided to decision makers Are necessary to covert direct material to finished goods Are required for external reporting (e.g., GAAP or IFRS) Specifies how an entity accomplishes its objectives by matching capabilities with opportunities Means that operating management can use internal measures that are not GAAP Is a product, machine, service, or process for which cost information is accumulated Is mostly historical / past oriented 7. Planning 7 8. Corporate Governance 8 9. Controlling 9 10. Management Accounting 10 Means the accountant must focus on the Triple Bottom-line: profit, people, planet Are direct manufacturing costs 11. Corporate Social Responsibility 11 12. Subjective Analysis 12 Are important for business success 13. Cost Object 14. Conversion Costs 13 Allows management to get feedback for possible corrective actions 14 Helps ensure legal compliance and fiduciary responsibilities are met 15 Means benefits from resources should exceed the cost of those resources 15. Prime Costs Question D - Sample costing flow for a product (10 marks) ? 2 2 Box Ap Materials: 2 Opening Balancem + Newbuys 2 - Transfers but Ending Balance 2 2 Box BL Sales 2 -Lostof Goods Bold 2 Gross Margina -Corporate Everhead 2 Earnings before Taxes 2 (operating profit) - Taxes? Net Income Box D Finished Goods: 2 Opening Balance 7 + Transfers in 2 -Transfers but Ending Balance Box CL WorkinProcess: Opening Balance +Materialin 2 +Labour +Mfgiverhead? - Transfersbut? Ending Balance ? Answer: 1. What type of costing system is illustrated above on this page? 2. What is the correct ordering of the flow of boxes above (example: B to D to C to A) 3. True and False questions - Indicate True or False True False Question A. Inventory in finished goods includes direct material, direct labour, factory overhead and corporate overhead. B. Units transferred out of Box C will have material, labour and factory overhead in the transfer cost. C. Equivalent units of production are the portion of whole units that are complete with respect to either materials or conversion (direct labour and factory overhead) costs. D. Process costing is used for unique production jobs. E. Process costing and job costing assign the same costs to ending work in process inventory. F. FIFO costing includes beginning inventory costs in the equivalent per unit cost calculation. G. If material for 2000 products was added to Work in Process but conversion costs are 75% complete at month end, the equivalent units for allocating conversion costs incurred in the month are A = 2,000 or B = 1,500 units. Which is correct? H. The Finished Goods in Box D received $50,000 of costs (Transferred in). Opening inventory was $20,000 and ending inventory was $10,000. Transferred out must be A = $50,000 or B = $60,000. Which is correct? A B A B Question E - Sample costing flows and pricing for three customers (10 marks) 2 Box DO Customer 3 + Material ? + Labour? + Mfg. Dverhead ? +Corp Overhead? + Markip 2 =Fixed Price 2 Box Customer 10 + Material + Labour +Mfg. Overhead? +Corp Overhead +Markapa =Floating Price 2 Box CActual Customer 20 +Materialto-date? + Labour Tomate +Mfg.IDverhead 2 +Eorp Overhead? Costs to date 2 Box CFor ecast Customer 20 + Materiala + Labour +Mfg. Overhead 2 +Lorp Everhead +Markap? = Fixed Price 2 Answer: 1. What type of costing system is illustrated above on this page? 2. What is a potential issue with Customer 2 if labour costs are based on a budget and actual results means the allocation should have been higher. 3. True and False questions - Indicate True or False True False Question A. Factory (Mfg) overhead includes all manufacturing costs except direct materials and direct labour and is allocated based on overall direct labour hours worked. B. Labour in the Customer Boxes above this page) are based on specific labour rates and hours worked on the particular job. C. Materials are tracked through a requisition system. D. Factory overhead applied represents the actual overhead costs incurred for the particular job. In Box A, this is the actual Mfg overhead incurred. E. Material, Labour Costs, and Mfg Overhead in the Boxes above on this page would be recorded in Cost of Goods Sold when a sale is realized. F. A job costing system is not applicable for a service company. G. The mark-up (i.e., profit) in the Box Dis 20% of costs. If the manufacturing costs are $75,000 and corporate overhead is $25,000, the profit to the company is A = $20,000 or B = $15,000. Which is correct? H. Labour hours are tracked through a time ticket system. If the labour component of costs in G just above unexpectedly increased and manufacturing costs are now $80,000, the company would A= increase its profits or B = decrease its profits. Which is correct? A B A B Question F - Keep brief and bullets are preferred (10 marks) Part 1 - In a job order cost system, briefly state two important Labour / HR policies that would help the company produce customized products as desired by customers and would help the company control costs in setting prices for these products. This is particularly important for fixed price contracts. (4 marks, 2 marks per policy stated) 1. 2. Part 2 - In a process costing system, 1. Why are "equivalent units" used to calculate costs to be assigned to units transferred out and ending work in process inventory and 2. Why are factory overhead costs "allocated to products? (4 marks, 2 marks per point) 1. 2. Part 3 -In process costing, products are mass-produced. What is an important HR policy that would control time and money in this system? (2 marks)