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55 Cards in this Set
- Front
- Back
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When a company is manufacturing a product it incurs what? |
Period and product cost |
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Two types of period Cost |
Selling (marketing) cost and administrative cost |
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Examples of direct materials |
*Leather for making shoes *Paper for making books, *Tires for making cars |
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Three examples for indirect materials |
*thread for clothes *Number of Nails *Glue |
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Examples of general overhead cost |
*utilities *Property taxes *Insurance cost *Equipment depreciation |
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Prime cost equal what? |
Direct materials + Direct labor |
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Conversion cost equal what? |
Direct labor + overhead |
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Examples of marketing or selling cost |
*sales salaries *Sales office utilities *Sales travel cost *Advertising |
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Examples of administrative cost |
*equipment depreciation *Administrative Office Building lease *Corporate Vice President salary *Admin utilities |
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Period cost are also what kind of cost? |
Indirect cost |
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What is contained in all product cost? |
*Direct material *Direct labor *Manufacturing overhead |
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What is contained in direct cost |
*Direct material *Direct labor |
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What is contained in Prime cost? |
*Direct material *Direct labor |
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What is contained in conversion cost? |
*direct labor *Overhead |
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What is contained in Period Cost? |
*selling cost *Administrative cost |
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What is contained in all of companies cost? |
*direct material *Direct labor *Manufacturing overhead *Selling cost *Administrative cost |
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What is contained in manufacturing cost |
*direct material *Direct labor *Manufacturing overhead |
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What is contained in manufacturing overhead |
*indirect material *Indirect labor Other overhead |
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Cost object |
Anything you want to know the cost of ( anything for which cost data are we desired) |
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Cost object contains what? |
*direct cost *Indirect cost |
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Direct cost |
Cost that can easily and conveniently be traced to a specific cost object |
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Indirect cost |
Cost that cannot easily and conveniently be traced to a specific cost object |
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Product cost (manufacturing cost) |
Cost that are directly associated with making a product |
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Direct manufacturing cost |
Material cost that can be easily and conveniently traced to the final product |
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Direct labor |
Labor cost that can easily and conveniently be traced to the final product |
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Two types of direct manufacturing cost |
*direct materials *Direct labor |
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Two types of manufacturing cost |
*direct manufacturing cost *Indirect manufacturing cost |
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One type of manufacturing cost |
Manufacturing overhead |
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Manufacturing overhead |
any manufacturing cost not classified as direct materials or direct labor |
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Two special types of manufacturing overhead |
*indirect materials *Indirect labor |
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Variable cost |
Increase in proportion due to increasing activity level |
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Variable cost per unit |
Doesn't change when the activity level changes |
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Fixed cost |
The total fixed cost do not change when the activity level changes |
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The fixed cost per unit |
Increases when the activity level decreases |
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Two types of relevant cost |
*increment cost *Opportunity cost |
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One type of irrelevant |
Sunk cost |
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Sunk cost |
Cost that you have already incurred that cannot be changed by decisions made now or in the future |
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A costs relevant or irrelevant depending on what? |
avoidable or unavoidable |
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Two types of relevant cost |
*differential or incremental cost *Opportunity cost |
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Fixed cost can be what? |
*discretionary *Committed |
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Discretionary cost |
Change in the short run |
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Committed |
Cannot change in short run |
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Example of discretionary fixed cost |
*advertising *Traveling |
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Example of committed fixed cost |
*lease for building *Retirement packages |
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Relevant range |
The range of production where variable and fixed costs are valid. In other words it's your normal level of operations. |
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Y stands for what in the fixed cost equation |
Total mixed cost |
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A stand for what in the total fixed cost equation |
Total fixed cost |
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B stands for what in the total fixed cost equation |
Variable cost per unit |
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X stands for what in the total fixed cost equation |
Number of units |
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What is the equation for the total fixed cost? |
Y= a +b(x) |
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What is the equation for finding variable cost per unit |
Total Mix Cost (H-L) Number of Units (H-L) |
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Cost per units remain the same regardless of activities change |
Variable cost per unit |
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Cost per unit changes with change in activity |
Fixed cost per unit |
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If cost per units is list... |
Multiply cost per units with the amount of units |
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Selling cost |
Cost it takes to sell products and deliver to customers |
