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58 Cards in this Set

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Administrative costs
All executive, organizational, and clerical costs associated with the general management of an organization rather than with manufacturing, marketing, or selling
Common Costs
A common cost is incurred to support a number of cost objects but 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 pilots wage is caused bby any one passenger taking the flight.
Conversion Cost
Direct labor cost plus manufacturing overhead cost.
Cost behavior
The way in which a cost reacts to changes in the level of activity
Cost object
Anything for which cost data are desired. Examples of possible cost objects are products,product lines, customers, jobs and organizational subunits such as departments or divisions of a company.
Cost of goods manufactured
The manufacturing costs associated witht the goods that were finished during the period.
Differential cost
A difference in cost between two alternatives. (Also see Incremental cost)
Differential revenue
The difference in revenue between two alternatives.
Direct Cost
A cost that can be easily and conveniently traced to specified cost object.
Direct labor
Factory labor costs that can be easily traced to individual units of product. Also called touch labor.
Direct materials
Materials that become an integral part of the finished product and whose cost can be conveniently traced to it.
Finished Goods
Units of product that have been completed but not yet sold to customers.
Fixed cost
A cost that remains constant, in total, regardless of changes in the level of activity within the relevent range
Incremental cost
An increase in cost between two alternatives
Indirect Cost
A cost that cannot be easily or conveniently traced to a specific cost object
Indirect labor
the labor costs of janitors, supervisors, material handlers, and other factory workers that cannot be conveniently traced directly to a particular product
Indirect materials
Small items items of material such as glue and nails these items may be an integral part of a finished product but their cost cannot be easily or conveniently traced to it.
Manufacturing overhead
All costs associated with manufacturing except direct material and direct labor
Marketing or Selling Cost
All costs necessary to secure customer orders and get the finished product or service into the hands of the customer
Opportunity cost
The potential benefit that is given up when one alternative is selected over another
Period Cost
Costs that are taken directly to the income statement as expenses in the period in which they are incurred or accrued.
Prime Cost
Direct materials plus direct labor
Product Cost
All costs that are involved in the purchase or manufacturing of goods. In the case of manufacturing goods these costs consist of direct materials, direct labor, and manufacturing overhead.
Raw Materials
Any materials that go into the final product.
Relevent Range
The range of activity within which assumptions about a variable and fixed cost behavior are valid
Schedule of cost of goods manufactured
A schedule showing the direct materials direct labor and manufacturing overhead cost incurred for a period and that are assigned to work in process and completed goods
Sunk Costs
Any costs that has already been incurred and that cannot be changed by any decision made now or in the future
Variable cost
A cost that varies in total, in direct proportion to changes in level of activity it is constant per unit
Indirect labor
the labor costs of janitors, supervisors, material handlers, and other factory workers that cannot be conveniently traced directly to a particular product
Indirect materials
Small items items of material such as glue and nails these items may be an integral part of a finished product but their cost cannot be easily or conveniently traced to it.
Manufacturing overhead
All costs associated with manufacturing except direct material and direct labor
Marketing or Selling Cost
All costs necessary to secure customer orders and get the finished product or service into the hands of the customer
Opportunity cost
The potential benefit that is given up when one alternative is selected over another
Period Cost
Costs that are taken directly to the income statement as expenses in the period in which they are incurred or accrued.
Prime Cost
Direct materials plus direct labor
Product Cost
All costs that are involved in the purchase or manufacturing of goods. In the case of manufacturing goods these costs consist of direct materials, direct labor, and manufacturing overhead.
Raw Materials
Any materials that go into the final product.
Relevent Range
The range of activity within which assumptions about a variable and fixed cost behavior are valid
Schedule of cost of goods manufactured
A schedule showing the direct materials direct labor and manufacturing overhead cost incurred for a period and that are assigned to work in process and completed goods
Sunk Costs
Any costs that has already been incurred and that cannot be changed by any decision made now or in the future
Variable cost
A cost that varies in total, in direct proportion to changes in level of activity it is constant per unit
Absorption costing
A costing method that includes all manufacturing costs-direct materials direct labor and both varied and fixed overhead- as part of the cost of a product
Allocation base
A measure of activity such as direct labor hours or machine hours that is used to assign cost to cost objects
Bill of materials
A document that shows the type and quantity of each major item of materials required to make a product
Cost driver
a factor such as machine hours, beds occupied, computer time, or flight hours that causes overhead cost.
Full cost
Synonym for absorbtion costing
Job cost sheet
A form prepared for each job that records the materials labor and overhead cost to be charged to the job
Job order costing system
A costing system used in situations where many different product jobs or services are produced each period
Materials Requisition form
A detailed source document that specifies the type and quantity of materials that are to be drawn from the store room and identifies the job to which the cost of materials are to be charged
Multiple pre determined overhead rates
A costing system in which there are multiple overhead costs pools with a different pre determined rate for each cost pool, rather than a single pre determined overhead rate for the entire company
Normal Cost system
A costing system in which overhead costs are applied to jobs by multiplying a pre deteremined overhead rate by the actual amount of the allocation base incured by the job
Over applied Overhead
A credit balance in the manufacturing overhead account that occurs when the amount of overhead costs applied to the work in process is greater than the amount of overhead costs actually incurred in the period
Overhead application
The process of charging manufacturing overhead cost to job cost sheets and to the work in progress account
Plant wide overhead rate
A single pre determined overhead rate that is used throughout a plant
Pre determined overhead rate
A rate used to charge overhead costs to jobs. The rate is established in advance for each period using estimates of total manufacturing overhead costs and of the total allocation based for the period.
Process costing system
A costing system used in situations where a single homogenius product such as cement or flour is produced for long periods of time
Time Ticket
A detailed source document that is used to record the amount of time an employee spends on various activities
Under applied overhead
A debit balance in the manufacturing overhead account that occurs when the amount of overhead costs actually occured is greater than the amount of overhead costs applied to work in progress during a period