Acc 211

Front 1

managerial accounting

Back 1

information is provided to meet the specific needs of a company's management

Front 2

Direct costs

Back 2

specially attributed to the cost object. indirect costs are not.

Front 3

Direct materials cost

Back 3

the cost of any material that is an integral part of the final product. must be significant portion of the total cost of the product

Front 4

Factory overhead cost

Back 4

costs that are incurred in the manufacturing process are combined and classified

Front 5

Product costs

Back 5

consists of the three elements of manufacturing cost: direct materials, direct labor, and factory overhead

Front 6

Period costs

Back 6

generally classified into two categories:
- selling: incurred in marketing the product and delivering the sold products
- administrative: incurred in the administration of the business and are not directly related to the manufacturing or selling functions

Front 7

1. Material Inventory

Back 7

consists of the costs of the direct and indirect materials that have not yet entered the manufacturing process

Front 8

2. Work in process Inventory

Back 8

consists of the direct materials costs, the direct labor costs, and the factory overhead costs that have entered the manufacturing process

Front 9

3. Finished Goods Inventory

Back 9

consists of completed products that have not been sold yet.

Front 10

Line

Back 10

involved in making the product

Front 11

Staff

Back 11

supports the line, CEO, human resources, payroll

Front 12

Cost accounting systems

Back 12

accumulate manufacturing costs for the goods that are produced.

Front 13

Job order cost system

Back 13

provides a separate record for the cost of each quantity of product that passes through the factory

Front 14

Process cost system

Back 14

costs are accumulated for each of the departments or processes within the factory.

Front 15

Selling expenses

Back 15

incurred in marketing the product and delivering the sold product to customers. (Income statement)

Front 16

Administrative expenses

Back 16

incurred in the administration of the business and are not related to the manufacturing or selling functions. (Income statement)

Front 17

Single plantwide factory overhead rate

Back 17

all of the factory overhead is allocated to all the products

Front 18

SPFOH =

Back 18

total budgeted factory overhead cost/
Total budgeted plantwide allocation base (estimated)

Front 19

Common allocation bases include

Back 19

direct labor hours, direct labor dollars, and machine hours.

Front 20

Factory overhead consists of

Back 20

factory and equipment, factory power, factory supplies, and indirect labor.

Front 21

Total budgeted direct labor hours can be determined by

Back 21

multiplying the budgeted manufacturing volume by the direct labor hours per unit.

Front 22

Multiple production department factory overhead rate method

Back 22

uses different rates for each production department to allocate factory overhead to products

Front 23

Production department factory overhead rate

Back 23

determined by dividing the budgeted production department factory overhead by the budgeted allocation base for each department.

Front 24

Activity-based costing (ABC) method

Back 24

uses cost of activities to determine product costs. Factory overhead costs are initially accounted for in activity cost pools

Front 25

Activity cost pools

Back 25

factory overhead are initially accounted for in these pools and are related to any given activity, such as machine usage, inspections, moving, production setups, and engineering activities

Front 26

Engineering change order (ECO)

Back 26

initiates an administrative process to change the design of a product.

Front 27

Activity rates

Back 27

determined by dividing the budgeted activity cost pool by the total estimated activity base

Front 28

activity base

Back 28

rather than allocation base, since the base is related to an activity cost pool.

Front 29

Product costs

Back 29

computed by multiplying the activity rate by the related activity-base quantity for each product.

Front 30

The activity-based costing method provides

Back 30

the most accurate product costs because activities are consumed in different proportions than the direct labor used in the two products.

Front 31

Factory overhead cost per unit:

Back 31

(number of dlh x spfoh rate) / number of units = cost per unit

Front 32

Activity rate:

Back 32

activity cost pool budgeted / estimated activity base = activity rate per unit

Front 33

Activity-based factory overhead cost per unit:

Back 33

activity-base usage x activity rate = activity cost

Front 34

Planning

Back 34

used by management to develop the organizations objectives

Front 35

Directing

Back 35

the process by which managers run day-to-day operations

Front 36

Controlling

Back 36

monitoring the operating results of plans and comparing results

Front 37

Continuous process improvement

Back 37

philosophy of continually improving employees, business processes, and products