COST ACCOUNTING
COST MANAGEMENT SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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You are establishing the cost for a make assembly. When we run Cost Rollup, it is not rolling up and the Assembly shows “0” cost. However, item costs are available for child (buy) components. In the review work order cost, we are able to see child components costs, but not the rollup cost of the assembly. Identify two reasons this happened.
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The item has no on-hand inventory.
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The assembly item is marked as Perpetual Average costed.
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Outstanding purchase orders have not been received.
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The Work Definition is incomplete.
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Burdens have not been established for the item
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Explanation:
Detailed explanation-1: -The cost rollup is the process of adding the direct material, direct labor and overhead costs to obtain the total manufacturing cost per unit. The cost rollup is usually done automatically by cost management systems, but can also be performed manually using a spreadsheet application.
Detailed explanation-2: -The rollup process builds the cost of assemblies, starting with the lowest level, and works up the structure to top level assemblies. This method gives you the most current bill of material structure and component costs.
There is 1 question to complete.