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19 Cards in this Set
- Front
- Back
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Direct materials, direct labor, and overhead
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Manufacturing cost
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Selling cost and administrative expenses
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Nonmanufacturing cost
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Capitalized as part of finished goods inventory
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Product cost
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Expensed as incurred
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Period cost
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Future cost that will vary depending on action taken. All other cost are assumed to be constant and thus have no effect on decision
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Relevant cost
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Cost either already paid or irrevocably committed to incur
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Sunk cost
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Joint products acquire separate identities
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Split-off point
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Allocates joint production cost to each product based on its relative proportion of measure selected
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Physical-quantity method
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Assigns a proportionate amt of total cost to each product on quantitative basis
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Market-based approach
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Based on relative sales values of separate products at split-off
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Sales-value at split-off method
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Costs incurred prior to the split-off point to produce two or more goods manufactured simultaneously by a single process or series of processes
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Joint cost
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Consist of direct materials and direct labor
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Prime cost
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Selling price minus selling and disposal costs
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Net realizable value
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Includes fixed factory overhead in finished goods inventory
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Absorption costing
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Consists of direct labor and overhead
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Conversion cost
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Costing includes variable manufacturing costs only: direct materials, direct labor, and variable manufacturing overhead
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Variable (direct) costing
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Breakeven in Units
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Fixed Cost/ Unit contribution Margin
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Breakeven in Dollars
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Fixed Cost/Contribution Margin ratio
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Measures the amount by which sales may decline before losses occur
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Margin of safety
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