Acctg Exam 2

Front 1

Unit-level OH activity

Back 1

act. done 2 each unit
- power/electricity
-machinery
-indirect material like glue, buttons or tacks

Front 2

Batch-level OH activity

Back 2

activity done 4 each batch
- set ups[4 each batch]
-inspections[4 each batch]
-material handling[4 each batch]
-production scheduling[bby the batch]
ex: coca-cola

Front 3

Product Sustaining OH activity

Back 3

activity done for the ENTIRE product type
-Product engineering
-product improvement
-equipment maintenance
ex: a new label 4 a coke can

Front 4

Facility-level OH activity

Back 4

activity for the ENTIRE factory itself
-plant management
-landscaping
-plant maintance
-security
-property taxes
-property insurance

Front 5

ABC Stage 1: classify cost pools into activity levels

Back 5

Cost Distribution

Front 6

ABC stage 2: identify a cost driver 4 each pool of similiar costs[homogenous cost pools] then assign these costs 2 the various products

Back 6

OH application

Front 7

Traditional volume costing

Back 7

tends 2 overcost high volumes products, undercost low volume products; cost pools amouts are assigned based on the # of transactions that a product line uses

Front 8

NOTE

Back 8

in abc costing, many of the OH costs become direct costs; this leads 2 more accuracy

Front 9

Indications that yu should use ABC

Back 9

-high overhead costs
-diverse product lines
-DL cost insignificant
-

Front 10

Activity Based Cpsting

Back 10

-more correct than tradtional, volume based methods.
-it is being used more used now b/c:
-products are more complex
-heavier competition
-labor not as important b/c of machines

Front 11

Volume Based Costing

Back 11

- less accurate
-does not work well in high tech world
-works well 4 single product companies

Front 12

process costing

Back 12

company that makes the same unit over and over[ex. coca-cola]
1.accumulate the costs
2.assign the costs 2 the products

Front 13

Departmental Production Report

Back 13

used[instead of a job cost sheet] to report costs of products under process costing

Front 14

weighted average method

Back 14

avg costs from 2 or more seperate acctg periods. it uses EU, act. materials and labor cost, and estimated OH[based on a rate times actual hrs]

Front 15

equivalent unit

Back 15

the amount of productive effort applied 2 a physical unit of production
ex: 4 units, 25% completed = 1 fully completed unit