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