Main TopicsWhat are the two major steps in the job order cost flow?
Table of Contents
- What are the two major steps in the job order cost flow?
- What are the cost flows through a job cost system?
- What is the correct order for the flow of costs for a process product costing system?
- Which type of cost is labor?
- What is the correct order of accounts in which product costs flow?
- Which is the first step in the capital budgeting process?
- How are interest paid and cash flows treated in a statement of cash flows?
- How does the direct and indirect method of cash flow work?
- What makes up operating activities in a statement of cash flows?
What are the two major steps in the job order cost flow?
The two major steps in the flow of costs are (c) accumulating and assigning. Costs are accumulated through the process from direct materials to direct labor.
What are the cost flows through a job cost system?
Overview of Cost Flows. The basic flow of costs in a job-order system begins by recording the costs of material, labor, and manufacturing overhead. a. Direct material and direct labor costs are debited to the Work In Process account.
What is the correct order for the flow of costs for a process product costing system?
The process of the flow of costs begins with valuing the raw materials used in manufacturing. The flow of costs then moves to the work-in-process inventory. The cost of the machinery and labor involved in production are added as well as any overhead costs.
Which type of cost is labor?
Labor costs are also classified as fixed costs or variable costs. For example, the cost of labor to run the machinery is a variable cost, which varies with the firm's level of production. A firm can easily increase or decrease variable labor cost by increasing or decreasing production.
What is the correct order of accounts in which product costs flow?
To record product costs as an asset, accountants use one of three inventory accounts: raw materials inventory, work-in-process inventory, or finished goods inventory.
Which is the first step in the capital budgeting process?
As already stated, the first step in the capital budgeting process is a survey of the need for capital in the enterprise. Usually, at the beginning of each period, top management invites proposals for investment projects from the different operating units of the organisation.
How are interest paid and cash flows treated in a statement of cash flows?
Many companies present both the interest received and interest paid as operating cash flows. Others treat interest received as investing cash flow and interest paid as a financing cash flow. The method used is the choice of the finance director. Under U.S. GAAP, interest paid and received are always treated as operating cash flows.
How does the direct and indirect method of cash flow work?
In the direct method, all individual instances of cash that are received or paid out are tallied up and the total is the resulting cash flow. In the indirect method, the accounting line items such as net income, depreciation, etc. are used to arrive at cash flow.
What makes up operating activities in a statement of cash flows?
Operating activities include generating revenue, paying expenses, and funding working capital. typically includes the cash flows associated with sales, purchases, and other expenses. The company’s chief financial officer (CFO) chooses between the direct and indirect presentation of operating cash flow:
