Question

if a university has decided to replace all professors with teaching robots. How migh this switch impact on the university's choice of cost driver as the basis for overhead application? Explain.

Be precise and on the point.

Describe the flow of costs through a product costing system. what spechific accounts are involoved and how they are used.

Answer 1

Salaries                         time spent (9), FTE (4), income (1), tuition (1), head count (1), personnel costs (1),                      budget/planning (1), direct cost (1), number of credits (1), structural unit (1)

Loans and interest square meters (3), occupancy (1), capital spent (1), direct cost (1), personnel costs (1), FTE (1), time spent (1), income (1), structural unit (1)

IT/computer services FTE (5), academic personnel and students (1), time spent (2), head count (1), tuition (1), income (1), student load (1), personnel costs (1), direct allocated salaries (1), activity (1), costs (1), structural unit (1)

Staff facilities FTE (4), square meters (4), time spent (2), direct allocated salaries (1), income (1), tuition (1), academic personnel and students (1), personnel costs (1), costs (1), structural unit (1)

Premises/estate square meters (9), occupancy (1), income (1), tuition (1), personnel costs (1), direct allocated salaries (1), time spent (1), academic personnel and students (1), structural unit (1)

Depreciation square meters (7), occupancy (1), direct allocated salaries (1), investments (1), number of assets (1), personnel costs (1), FTE (1), time spent (1), academic personnel and students (1), direct costs (1), structural unit (1) Finance service FTE (5), time spent (2), costs (2), activity (2), academic personnel and students (1), direct allocated salaries (1), equally across group (1), income (1), tuition (1), number of invoices processed (1), personnel costs (1)

Personnel service FTE (6), time spent (2), costs (2), academic personnel and students (1), head count (1), direct allocated salaries (1), equally across group (1), income (1), tuition (1), number of invoices processed (1), activity (1), personnel costs (1)

Marketing activity FTE (6), time spent (2), costs (2), income (1), activity (1), tuition (1), new students (1), academic personnel and students (1), personnel costs (1)

Academic services FTE (4), time spent (2), number of students (2), activity (1), equally across group (1), graduate students (1), undergraduate students (1), tuition (1), number of credits (1), number of examination (1), number of invoices processed (1), academic personnel and students (1), researchers (1), costs (1), personnel costs (1)

Administration of teaching FTE (6), number of student (3), time spent (2), academic personnel and students (2), direct to teaching allocated salaries (1), graduate students (1), undergraduate students (1), tuition (1), number of credits (1), number of examination (1), costs (1), personnel costs (1)

Administration of research time spent (5), FTE (3), number of research grant application (2), research income (1), tuition (1), research project value (1), costs (1), number of grant (1), academic personnel and students (1), personnel costs (1), direct to research allocated salaries (1), turnover in third-party funds (1), result of research (1)

Legal activities FTE (4), time spent (2), costs (2), income (2), tuition (1), academic personnel and students (1), personnel costs (1), activity (2)

International relation activities FTE (3), time spent (3), graduate students (1), undergraduate students (1), international students number (1), number of students (1), tuition (1), number of examination (1), academic personnel and students (1), costs (1), personnel costs (1), activity (1)

Auditing activity FTE (4), direct allocated salaries (1), equally across group (1), graduate students (1), undergraduate students (1), income (1), tuition (1), academic personnel and students (1), costs (1), personnel costs (1), time spent (1)

Library services number of students (4), FTE (3), time spent (2), graduate students (1), undergraduate students (1), tuition (1), number of loans (1), academic personnel and students (1), costs (1), activity (1), researchers (1), personnel costs (1), direct allocated salaries (1)

Changed Cost Drivers with robots employments:

With robots employments the expenses incurred with relation to the no. of staffs would be the no. of robots employed and the cost for each robots would be their teaching cost and not other expenses related to the foods and other personnel costs.

As products physically move through the production process, the product costs associated with these products move through several important accounts as shown

Direct Materials

Question: In a process costing setting, direct materials are often used by several production departments. How do we record direct materials costs for each production department?

Answer: When direct materials are requisitioned from the raw materials storeroom, a journal entry is made to reduce the raw materials inventory account and increase the appropriate work-in-process inventory account. For example, assume the Assembly department of Desk Products, Inc., requisitions direct materials to be used in production.

Direct Labor

Question: Each production department typically has a direct labor work force. How do we record direct labor costs for each production department?

Answer: Direct labor costs are recorded directly in the production department’s work-in-process inventory account. Assume direct labor costs are incurred by the Assembly department.

Manufacturing Overhead

Question: Manufacturing overhead costs are typically assigned to products using a predetermined overhead rate using a normal costing system as discussed in Chapter 2 “How Is Job Costing Used to Track Production Costs?” (job costing) and Chapter 3 “How Does an Organization Use Activity-Based Costing to Allocate Overhead Costs?” (activity-based costing). How do we record manufacturing overhead costs for each department?

Answer: Assume manufacturing overhead costs (often simply called overhead costs) are being applied to products going through the Assembly department.

Transferred-In Costs

Question: At this point, we have discussed how to record product costs (direct materials, direct labor, and manufacturing overhead) related to each production department. As you review Figure 4.1 “A Comparison of Cost Flows for Job Costing and Process Costing”, notice that products often flow from one production department to the next. Transferred-in costs are the costs associated with products moving from one department to another. How do we record transferred-in costs for each department?

Answer: Assume the Assembly department at Desk Products, Inc., completes a batch of desks and moves the desks to the Finishing department. The costs associated with these desks must be transferred from the work-in-process inventory account for the Assembly department to the work-in-process inventory account for the Finishing department

Finished Goods

Question: Goods are completed and ready to sell once they have gone through the final production department. The final production department at Desk Products, Inc., is the Finishing department. How do we record production costs for products moved from the final production department to the finished goods warehouse?

Answer: When goods go through the final production department and are completed, the related costs are moved to the finished goods inventory account.

Cost of Goods Sold

Question: How do we record production costs for goods that have been sold?

Answer: Once the completed goods are sold, the related costs are moved out of the finished goods inventory account and into the cost of goods sold account.