Accounting 1B Chapter 7

Front 1

activity-based costing (ABC) method

Back 1

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 2

budget performance report

Back 2

A report comparing actual results with budget figures. (1006)

Front 3

budgeted variable factory overhead

Back 3

The standard variable overhead for the actual units produced.

Front 4

controllable variance

Back 4

The difference between the actual amount of variable factory overhead cost incurred and the amount of variable factory overhead budgeted for the standard product.

Front 5

cost variance

Back 5

The difference between actual cost and the flexible budget at actual volumes.

Front 6

currently attainable standards

Back 6

Standards that represent levels of operation that can be attained with reasonable effort.

Front 7

direct labor rate variance

Back 7

The cost associated with the difference between the standard rate and the actual rate paid for direct labor used in producing a commodity.

Front 8

direct labor time variance

Back 8

The cost associated with the difference between the standard hours and the actual hours of direct labor spent producing a commodity.

Front 9

direct materials price variance

Back 9

The cost associated with the difference between the standard price and the actual price of direct materials used in producing a commodity

Front 10

direct materials quantity variance

Back 10

The cost associated with the difference between the standard quantity and the actual quantity of direct materials used in producing a commodity.

Front 11

factory overhead cost variance report

Back 11

Reports budgeted and actual costs for variable and fixed factory overhead along with the related controllable and volume variances.

Front 12

favorable cost variance

Back 12

A variance that occurs when the actual cost is less than standard cost.

Front 13

ideal standards

Back 13

Standards that can be achieved only under perfect operating conditions, such as no idle time, no machine breakdowns, and no materials spoilage; also called theoretical standards.

Front 14

internal rate of return (IRR) method

Back 14

A method of analysis of proposed capital investments that uses present value concepts to compute the rate of return from the net cash flows expected from the investment.

Front 15

nonfinancial performance measure

Back 15

A performance measure expressed in units rather than dollars.

Front 16

process

Back 16

A sequence of activities linked together for performing a particular task.

Front 17

standard cost

Back 17

A detailed estimate of what a product should cost.

Front 18

standard cost systems

Back 18

Accounting systems that use standards for each element of manufacturing cost entering into the finished product.

Front 19

standards

Back 19

Performance goals, often relating to how much a product should cost.

Front 20

total manufacturing cost variance

Back 20

The difference between total standard costs and total actual costs for units produced.

Front 21

unfavorable cost variance

Back 21

A variance that occurs when the actual cost exceeds the standard cost.

Front 22

volume variance

Back 22

The difference between the budgeted fixed overhead at 100% of normal capacity and the standard fixed overhead for the actual production achieved during the period.