Accounting 1B Chapter 2

Front 1

activity base (driver)

Back 1

A measure of activity that is related to changes in cost. Used in analyzing and classifying cost behavior. Activity bases are also used in the denominator in calculating the predetermined factory overhead rate to assign overhead costs to cost objects.

Front 2

activity-based costing (ABC) method

Back 2

A cost allocation method that identifies activities causing the incurrence of costs and allocates these costs to products (or other cost objects), based on activity drivers (bases).

Front 3

cost accounting system

Back 3

A branch of managerial accounting concerned with accumulating manufacturing costs for financial reporting and decision-making purposes.

Front 4

cost allocation

Back 4

The process of assigning indirect cost to a cost object, such as a job.

Front 5

finished goods ledger

Back 5

The subsidiary ledger that contains the individual accounts for each kind of commodity or product produced.

Front 6

job cost sheet

Back 6

An account in the work in process subsidiary ledger in which the costs charged to a particular job order are recorded.

Front 7

job order cost system

Back 7

A type of cost accounting system that provides for a separate record of the cost of each particular quantity of product that passes through the factory.

Front 8

materials ledger

Back 8

The subsidiary ledger containing the individual accounts for each type of material.

Front 9

materials requisition

Back 9

The form or electronic transmission used by a manufacturing department to authorize materials issuances from the storeroom.

Front 10

overapplied factory overhead

Back 10

The amount of factory overhead applied in excess of the actual factory overhead costs incurred for production during a period.

Front 11

period costs

Back 11

Those costs that are used up in generating revenue during the current period and that are not involved in manufacturing a product, such as selling, general, and administrative expenses.

Front 12

process cost system

Back 12

A type of cost system that accumulates costs for each of the various departments within a manufacturing facility.

Front 13

receiving report

Back 13

The form or electronic transmission used by the receiving personnel to indicate that materials have been received and inspected.

Front 14

time tickets

Back 14

The form on which the amount of time spent by each employee and the labor cost incurred for each individual job, or for factory overhead, are recorded.

Front 15

underapplied factory overhead

Back 15

The amount of actual factory overhead in excess of the factory overhead applied to production during a period.