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28 Cards in this Set
- Front
- Back
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Administrative Costs
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All executive, organizational, and clerical costs associated with the general management of an organization rather than with manufacturing or selling. (p. 38)
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Budget
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A detailed plan for the future, usually expressed in formal quantitative terms. (p. 32)
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Common cost
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A cost that is incurred to support a number of cost objects but that cannot be traced to them individually. For example, the wage cost of the pilot of a 747 airliner is a common cost of all of the passengers on the aircraft. Without the pilot, there would be no flight and no passengers. But no part of the pilot's wage is caused by any one passenger taking the flight. (p. 52)
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Control
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The process of instituting procedures and then obtaining feedback to ensure that all parts of the organization are functioning effectively and moving toward overall company goals.
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Controller
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The member of the top management team who is responsible for providing relevant and timely data to managers and for preparing financial statements for external users. The controller reports to the CFO. (p. 32)
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Controlling
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Actions taken to help ensure that the plan is being followed and is appropriately modified as circumstances change. (p. 31)
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Conversion cost
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Direct labor cost plus manufacturing overhead cost. (p. 39)
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Cost behavior
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The way in which a cost reacts to changes in the level of activity. (p. 46)
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Cost object
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Anything for which cost data are desired. Examples of cost objects are products, customers, jobs, and parts of the organization such as departments or divisions. (p. 51)
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Cost of goods manufactured
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The manufacturing costs associated with the goods that were finished during the period. (p. 44)
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Differential cost
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A difference in cost between two alternatives. Also see incremental cost. (p. 52)
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Differential revenue
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The difference in revenue between two alternatives. (p. 52)
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Direct cost
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A cost that can be easily and conveniently traced to a specified cost object. (p. 51)
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Directing and motivating
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Mobilizing people to carry out plans and run routine operati0ns. (p. 31)
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Direct labor
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Factory labor costs that can be easily traced to individual units of product. Also called touch labor. (p. 37)
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Direct materials
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Materials that become an integral part of a finished product and whose costs can be conveniently traced to it. (p. 36)
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Feedback
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Accounting and other reports that help managers monitor performance and focus on problems and/or opportunities that might otherwise go unnoticed. (p. 32)
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Financial accounting
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The phase of accounting concerned with providing information to stockholders, creditors, and others outside the organization. (p. 33)
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Finished Goods
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Units of product that have been completed but not yet sold to customers. (p. 41)
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Fixed cost
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A cost that remains constant, in total, regardless of changes in the level of activity within the relevant range. If a fixed cost is expressed on a per unit basis, it varies inversely with the level of activity. (p. 49)
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Incremental cost
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An increase in cost between two alternatives. Also see Differential cost.
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Indirect Cost
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A cost that cannot be easily and conveniently traced to a specified cost object. (p. 51)
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Indirect labor
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The labor costs of janitors, supervisors, materials handlers, and other factory workers that cannot be conveniently traced to particular products. (p. 37)
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Indirect materials
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Small items of material such as glue and nails that may be an integral part of a finished product, but whose costs cannot be easily or conveniently traced to it. (p. 37)
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Inventoriable costs
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Synonym for product costs. (p. 39)
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Managerial Accounting
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The phase of accounting concerned with providing information to managers for use within the organization. (p. 33)
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Manufacturing overhead
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All manufacturing costs except direct materials and direct labor. (p. 37)
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Opportunity cost
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The potential benefit that is given up when one alternative is selected over another. (p. 53)
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