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Front 1

Administrative costs

Back 1

All executive, organizational, and clerical costs associated with the general management of an organization rather than with manufacturing, marketing, or selling

Front 2

Common Costs

Back 2

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.

Front 3

Conversion Cost

Back 3

Direct labor cost plus manufacturing overhead cost.

Front 4

Cost behavior

Back 4

The way in which a cost reacts to changes in the level of activity

Front 5

Cost object

Back 5

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.

Front 6

Cost of goods manufactured

Back 6

The manufacturing costs associated witht the goods that were finished during the period.

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Differential cost

Back 7

A difference in cost between two alternatives. (Also see Incremental cost)

Front 8

Differential revenue

Back 8

The difference in revenue between two alternatives.

Front 9

Direct Cost

Back 9

A cost that can be easily and conveniently traced to specified cost object.

Front 10

Direct labor

Back 10

Factory labor costs that can be easily traced to individual units of product. Also called touch labor.

Front 11

Direct materials

Back 11

Materials that become an integral part of the finished product and whose cost can be conveniently traced to it.

Front 12

Finished Goods

Back 12

Units of product that have been completed but not yet sold to customers.

Front 13

Fixed cost

Back 13

A cost that remains constant, in total, regardless of changes in the level of activity within the relevent range

Front 14

Incremental cost

Back 14

An increase in cost between two alternatives

Front 15

Indirect Cost

Back 15

A cost that cannot be easily or conveniently traced to a specific cost object

Front 16

Indirect labor

Back 16

the labor costs of janitors, supervisors, material handlers, and other factory workers that cannot be conveniently traced directly to a particular product

Front 17

Indirect materials

Back 17

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.

Front 18

Manufacturing overhead

Back 18

All costs associated with manufacturing except direct material and direct labor

Front 19

Marketing or Selling Cost

Back 19

All costs necessary to secure customer orders and get the finished product or service into the hands of the customer

Front 20

Opportunity cost

Back 20

The potential benefit that is given up when one alternative is selected over another

Front 21

Period Cost

Back 21

Costs that are taken directly to the income statement as expenses in the period in which they are incurred or accrued.

Front 22

Prime Cost

Back 22

Direct materials plus direct labor

Front 23

Product Cost

Back 23

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.

Front 24

Raw Materials

Back 24

Any materials that go into the final product.

Front 25

Relevent Range

Back 25

The range of activity within which assumptions about a variable and fixed cost behavior are valid

Front 26

Schedule of cost of goods manufactured

Back 26

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

Front 27

Sunk Costs

Back 27

Any costs that has already been incurred and that cannot be changed by any decision made now or in the future

Front 28

Variable cost

Back 28

A cost that varies in total, in direct proportion to changes in level of activity it is constant per unit

Front 29

Indirect labor

Back 29

the labor costs of janitors, supervisors, material handlers, and other factory workers that cannot be conveniently traced directly to a particular product

Front 30

Indirect materials

Back 30

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.

Front 31

Manufacturing overhead

Back 31

All costs associated with manufacturing except direct material and direct labor

Front 32

Marketing or Selling Cost

Back 32

All costs necessary to secure customer orders and get the finished product or service into the hands of the customer

Front 33

Opportunity cost

Back 33

The potential benefit that is given up when one alternative is selected over another

Front 34

Period Cost

Back 34

Costs that are taken directly to the income statement as expenses in the period in which they are incurred or accrued.

Front 35

Prime Cost

Back 35

Direct materials plus direct labor

Front 36

Product Cost

Back 36

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.

Front 37

Raw Materials

Back 37

Any materials that go into the final product.

Front 38

Relevent Range

Back 38

The range of activity within which assumptions about a variable and fixed cost behavior are valid

Front 39

Schedule of cost of goods manufactured

Back 39

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

Front 40

Sunk Costs

Back 40

Any costs that has already been incurred and that cannot be changed by any decision made now or in the future

Front 41

Variable cost

Back 41

A cost that varies in total, in direct proportion to changes in level of activity it is constant per unit

Front 42

Absorption costing

Back 42

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

Front 43

Allocation base

Back 43

A measure of activity such as direct labor hours or machine hours that is used to assign cost to cost objects

Front 44

Bill of materials

Back 44

A document that shows the type and quantity of each major item of materials required to make a product

Front 45

Cost driver

Back 45

a factor such as machine hours, beds occupied, computer time, or flight hours that causes overhead cost.

Front 46

Full cost

Back 46

Synonym for absorbtion costing

Front 47

Job cost sheet

Back 47

A form prepared for each job that records the materials labor and overhead cost to be charged to the job

Front 48

Job order costing system

Back 48

A costing system used in situations where many different product jobs or services are produced each period

Front 49

Materials Requisition form

Back 49

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

Front 50

Multiple pre determined overhead rates

Back 50

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

Front 51

Normal Cost system

Back 51

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

Front 52

Over applied Overhead

Back 52

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

Front 53

Overhead application

Back 53

The process of charging manufacturing overhead cost to job cost sheets and to the work in progress account

Front 54

Plant wide overhead rate

Back 54

A single pre determined overhead rate that is used throughout a plant

Front 55

Pre determined overhead rate

Back 55

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.

Front 56

Process costing system

Back 56

A costing system used in situations where a single homogenius product such as cement or flour is produced for long periods of time

Front 57

Time Ticket

Back 57

A detailed source document that is used to record the amount of time an employee spends on various activities

Front 58

Under applied overhead

Back 58

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