Acct 212 Managerial Accounting, Chapter 2 By Crosson, Needles

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Activity-based costing (ABC)

Back 1

A method of assigning overhead costs that categorizes all indirect costs by activity, taces the indirect costs to those activitse, and assigns activity costs to prodcuts using a cost drivre relatted to the cause of the cost.

Front 2

Actual costing

Back 2

A method of cost measurement that uses the actual costs of direct materials, direct labor, and overhead to calculate a product or service unit cost.

Front 3

Conversion costs

Back 3

The costs of converting direct materials into a finished product; the sum of direct labor costs and overhead costs.

Front 4

Cost allocation

Back 4

The process of assigning a collection of indirect costs to a specific cost object using an allocation base known as the cost driver.

Front 5

Cost driver

Back 5

An activity base that causes a cost pool to increase in amount as the cost driver increases in volume.

Front 6

Cost object

Back 6

The destination of an assigned, or allocated, cost.

Front 7

Cost of goods manufactured

Back 7

The cost of all units completed and moved to finished good storage during an accounting period.

Front 8

Cost pool

Back 8

The collection of overhead costs assigned to a cost object.

Front 9

Direct costs

Back 9

Costs that can be conveniently and economically traced to a cost object.

Front 10

Direct labor costs

Back 10

The costs of the labor needed to make a product or perform a service that can be conveniently and economically traced to specific units of the product or service.

Front 11

Finished Goods Inventory account

Back 11

An inventory account that shows the cost assigned to all completed products that have not been sold.

Front 12

Fixed cost

Back 12

A cost that remains constant within a defined range of activity or time period.

Front 13

Indirect costs

Back 13

Costs that cannot be conviently or economically traced to a cost object.

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Indirect labor costs

Back 14

The costs of labor for production related activities that cannot be conveniently or economically traced to a unit of the product or service.

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Indirect materials costs

Back 15

The costs of materials that cannot be conveniently and economically traced to a unit of the product or service.

Front 16

Manufacturing cost flow

Back 16

The flow of manufacturing costs (direct materials, direct labor, and overhead) through the Materials Inventory, Work in Process Inventory, and Finished Goods Inventory accounts into the Cost of Goods Sold account.

Front 17

Materials Inventory account

Back 17

An inventory account that shows the balance of the cost of unused materials.

Front 18

Nonvalue-adding cost

Back 18

The cost of an activity that adds cost to a product or service but does not increase its market value.

Front 19

Normal costing

Back 19

A method of cost measurement that combines the actual direct costs of materials and labor with estimated overhead costs to determine product or service unit cost.

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Overapplied overhead costs

Back 20

The amount by which overhead costs applied using the predetermined overhead rate exceed the actual overhead costs for the accounting period.

Front 21

Overhead costs

Back 21

Production-related costs that can be practically or conveniently traced to an end product or service. Also called factory overhead, factory burden, manufacturing overhead, service overhead, or indirect manufacturing costs.

Front 22

Period costs

Back 22

The costs of resources used during an accounting period that are not assigned to products or services. Also called noninventoriable costs or selling administrative, and general expenses.

Front 23

Predetermined overhead rate

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The rate calculated before an accounting period begins by dividing cost pool of total estimated overhead costs by total estimated cost driver for that pool.

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Prime costs

Back 24

The primary costs of production; the sum of direct materials costs and direct labor costs

Front 25

Product costs

Back 25

The costs assigned to inventory, which include the costs of direct materials, direct labor and overhead. Also called inventoriable costs.

Front 26

Product unit cost

Back 26

The cost of manufacturing a single unit of a product, computed either by dividing the total cost of direct materials, direct labor, and overhead by the total number of units produced, or determining the cost per unit for each element the product cost and summing those per-unit costs.

Front 27

Standard costing

Back 27

A method of cost measurement that uses the estimated costs of direct materials, direct labor, and overhead to calculate a product unit cost.

Front 28

Statement of cost of goods manufactured

Back 28

A formal statement summarizing the flow of all manufacturing costs incurred during an accounting period.

Front 29

Total manufacturing costs

Back 29

The total costs of direct materials, direct labor, and overhead incurred and transferred to Work in Process Inventory during an accounting period. Also called current manufacturing costs.

Front 30

Underapplied overhead costs

Back 30

The amount by which actual overhead costs exceed the overhead costs applied using the predetermined overhead rate for the accounting period.

Front 31

Value-adding cost

Back 31

The cost of an activity that increases the market value of a product or service.

Front 32

Variable cost

Back 32

A cost that changes in direct proportion to a change in productive output (or some other measure of volume)

Front 33

Work in Process Inventory account

Back 33

An inventory account used to record the manufacturing costs incurred and assigned to partially completed units of product.