Cost Accounting Chapter 1

Front 1

Manufacturing Sector

Back 1

Purchase materials and components and convert them into various finished goods.

Front 2

Merchandising Sector

Back 2

Purchase and then sell tangible products without changing their basic form.

Front 3

Service Sector

Back 3

Provide services or intangible products.

Front 4

Accounting Information Systems

Back 4

The processing of information from economic events into useful information for managers and external users.

Front 5

Cost Accounting

Back 5

Measures and reports financial and non-financial information relating to the cost of acquiring or using resources.

Front 6

Cost Accounting helps to:

Back 6

provide information to assist in decision making analysis and answer:
1: How will this information help managers to a better job?
2. Do cost exceed profits?

Front 7

Unit Cost

Back 7

Cost of making one unit.

Front 8

Loss leader

Back 8

is to sell one item at a loss in order to attract customers who will purchase more profitable products.

Front 9

Planning

Back 9

is to select clearly defined objectives and communicate the goals and how to obtain them to the entire company.

Front 10

Budget

Back 10

A plan of action of what needs to be done in order to achieve planning goals

Front 11

Control

Back 11

The process of monitoring the company's operations and determining and identify if the goals in the plan (budget) is being achieved.

Front 12

Feedback

Back 12

The comparison of planned and actual costs/profits of budgeted goals.

Front 13

Cost Center

Back 13

A unit of activity costs maybe assigned.

Front 14

Performance Report

Back 14

Include only costs and production data center's manager can control.

Front 15

Variance

Back 15

The difference between budgeted and actual results. Less than budget is FAVORABLE (F) More than budget is UNFAVORABLE (U).

Front 16

Management Accounting

Back 16

Measures and reports financial and non-financial information that helps managers make decisions to fulfill goals of the company.

Front 17

Financial Accounting

Back 17

Focus on reporting to external parties

Front 18

Cost Accounting

Back 18

Provides information for management accounting and financial accounting.

Front 19

Cost of Goods Sold or COGS (Merchandising)

Back 19

Beginning Merchandise Inventory + purchases - ending merchandise= Cost of Goods Sold

Front 20

Cost of Goods Sold or COGS (Manufacturing)

Back 20

Beginning finished Inventory + purchases - ending Finished Goods Inventory = Cost of Goods Sold

Front 21

Finished Goods Account

Back 21

The total cost incurred in manufacturing goods completed but still on hand.

Front 22

Work in Process

Back 22

Goods not completed yet.

Front 23

Materials

Back 23

Items needed to manufacture goods.

Front 24

FIFO

Back 24

First In First Out is a costing method used to sell first finished goods or merchandise that are the oldest.

Front 25

LIFO

Back 25

Last In First Out A costing method used to sell the goods that just arrived.

Front 26

Prime Costs

Back 26

Are all direct manufacturing costs.

Front 27

Conversion Costs

Back 27

Are all manufacturing costs other than direct material costs.