AFM481 Study Guide - Final Guide: Pro Rata, Gross Margin, Finished Good

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM481
• Professor: Robert Dusharme

Document Summary

Cost of goods sold (applied oh is less than actual oh) Cost of goods sold (applied oh is greater than actual oh) Spoilage represents the amount of resources that go into the process, but. Managers face key problems related to spoilage: identifying whether it exists, determining whether it can be eliminated, deciding whether eliminating it is worthwhile, determining the cost of spoilage. Constrait resources: cm per hour and then decide process costing with spoilage: abnormal and normal with full cost product. Je from abnormal spoilage opportunity cost: take out from buy and fixed costs saved take out from buy. Cogm= beg wip + product cost end wip. Cogs= bef fg + cogm end fg or beg inv + purchases end inv additional cost of producing more: (vc * additional) + (currect prod * fmoh) T=slope(a)/s^a since t<2, little confident that b>0. Moh applied: year end and diff b/w those.