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14 Cards in this Set

  • Front
  • Back
Cost Accounting
Is the process of assigning manufacturing costs to manufactured products
A cost object can be...
a unit of manufactured product
What are the two basic systems used to assins costs to products?
job order costing, and process costing
What happens in job order costing?
Costs are accumulated for each individual unit produced or each separate order of products
What happens to costs in process costing?
Costs are accumulated for each production process
Who would use job order costing?
caterers, mechanics, hekicopter manufacturer, and a construction crew
Process costing would be used by businesses such as
glass container manufacturers, food processing, and oil and gasoline refining
Job Cost Sheet
organizes, and summarizes the cost information for each job
How must manufacturing overhead be allocated?
to the units produced based on some reasonable base of distribution
Why isn't it reasonable to allocate the overhead on the basis of units produced in a job order system?
Because the job or units are unique and probably deserve different cost amounts
Actual Cost System
when actual product cost is calculated using actual amounts for direct material, direct labor, and manufacturing overhead
What are the key elements of Process Costing?
1. Number of equivalent units produced
2. Cost per equivalent units produced
3. Cost of ending-work-in-process inventory
4. Cost of completed units
How do you find the cost per equivalent unit?
Total Production Cost / Equivalent units
How do you find the equivalent unit?
Take the Number of Units Completed * their percentage

Take the number of raw units in work in process * their percentage completed

add those two numbers up