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32 Cards in this Set

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Cost of Goods Manufactured
summarizes the manufacturing activity of the period. Summary of DM, and WIP accounts.
-Beginning WIP+DM+DML+MOH-EWIP=CGM
Direct Materials(CGM)
Inventory 1/1
Add:Purchases
Materials avbl for use
Less:12/31
Direct Materials Used
Cost of Goods Sold
Finished Goods 1/1
Add: CGM
Cost of Goods Avbl for sale
Less:Finished Goods
Job Order Costing
a system for allocating costs to groups of unique products made to customer specifications.
Process Costing
a system for allocating cost to homogenous units of a mass produced product.
Activity Based Costing
a cost system that focuses on activities, determines that costs, and uses appropriate cost drivers.
Cost Driver
denomiator for overhead in abc costing. usually volume related.
Cost Pools
the numerator in determining overhead.
non value added costs
the cost of activities that can be eliminated without the customer perceiving a decline in product quality.
Value added cost
cost of activites that cannot be eliminated without the customer perceiving a decline in product quality.
Backflush Costing
goods are costed after they have been completed. Eliminates journal entries.
Product Costs
Direct materials, Direct Labor, Manufacturing Overhead.
Period Costs
cannot be associated with manufactured goods. Ex: Advertising Expense.
Prime Costs
Direct Materials and Direct Labor
Indirect Materials
not easily traceable to the product. Ex:Glue
Conversion Costs
Direct Labor, and Manufacturing Overhead.
Joint Costing
a system of assigning joint costs to joint products.
Mixed Costs
have a fixed component, and a variable component.
Relevant Range
is the operating range of activity in which cost behavior patterns are valid.
Service Department Cost Allocation Methods.
1)Direct Method
2)Step Method
3)Reciprocal Method
Direct Method
assigns costs based on proportions. Dept's X-80%, Dept Y-20%. Total Cost woudl be allocated based on percentages.
Step Method
service departments serve other service departments.
Defective Units
inferior goods reworked and sold as normal product.
Abnormal Spoilage
Is a period cost.
Spoilage in Job Costing
costs of abnormal spoilage should not be charged to jobs but written off as a loss of the period.
By Products-
can be sold and disclosed. Value can be recognized at any point.
Cost Function
a mathematical expression of how a cost changes with changes in the level of activity.
4 approaches to cost estimation
1)Industrial Engineering
2)Conference Method
3)Account Analysis Method
4)Quantative Methods
Industrial Engineering Method
estimates of cost functions are derived from analyzing the physical relationships between inputs.
Conference Method
estimates are made by individuals from various departments.
Account Analysis Method
derived by analyzing ledger accounts and designating them as fixed, variable costs.
Quantative Methods
derived from mathematical models