Julie - Managerial Acctg Ch 3

Front 1

activity base (cost driver)

Back 1

A measure of an organization's activity thatis usedas a basis for specifying cost behavior. The activity base alsois used to compute a predetermined overhead rate. The current trend is to refer to the activity base as a volume-based cost driver.

Front 2

actual costing

Back 2

a product-costing systemin which actualdirect material, direct-labor, and actual manufacturing-overhead costs are added to Work-In-Process inventory

Front 3

actual manufacturing overhead

Back 3

the actualcosts incurred during an accounting period for manufacturing overhead. Includes actual indirect material, indirectlabor, and other manufacturing costs

Front 4

applied manufacturing overhead

Back 4

the amount of manufacturing overhead costs added to Work-In-Process Inventory during an accounting period

Front 5

bill of materials

Back 5

a list of allthe materials neededto manufacture a product or productcomponent.

Front 6

cost distribution (sometimes called cost allocation)

Back 6

The FIRST STEP in assigning manufacturing-overhead costs. Overheadcostsarealligned toall departmental overheadcenters.

Front 7

cost of goods manufactured (COGM)

Back 7

The total cost of direct material, direct labor, and manufacturing overhead transferred from Work-In-Process Inventory to Finished-Goods Inventory durning an accounting period.

Front 8

departmental overhead centers

Back 8

Any department towhich overhead costs are assigned via overhead cost distribution

Front 9

departmental overhead rate

Back 9

An overhead rate calculated for a single production department

Front 10

job-cost record

Back 10

A document that records thecosts of direct material, direct labor, and manufacturing overhead for a particular production job or batch. The job-cost record is a subsidiary ledger account for the Work-In-Process Inventory account in the general ledger

Front 11

job-order costing

Back 11

A product-costing system in which costs are assigned to batches or job orders of production. Used by firms thatproduce relatively small numbers of dissimilar products.

Front 12

material requisition form

Back 12

A document used by the production department supervisor to request the release of raw materials for production

Front 13

normal costing

Back 13

A product-costing system in which actual direct-materials, actula labor, and applied manufacturing overhead costs are added to Work-In-Process Inventory

Front 14

overapplied overhead

Back 14

The amount by which the period's applied manufacturing overheadexceeds actual manufacturing overhead.

Front 15

overhead application (or absorption)

Back 15

The THIRD STEP in assigning manufacturing-overhead costs. All costs associated with each production department are assigned to the product units on which a department has worked.

Front 16

plantwide overheadrate

Back 16

An overhead rate calculated by averageing manufacturing-overhead costs for the entire production facility

Front 17

predetermined overhead rate

Back 17

The rate used to apply manufacturing overhead to Work-In-Process Inventory, calculatd as; estimated manufacturing overhead rate/estimated amount of cost driver (or activity base)

Front 18

process-costing system

Back 18

A product-costing system in which production costs are averaged over a large number of product units. Used by firms that produce large numbers of nearly identical products.

Front 19

product-costing system

Back 19

The process of accumulating the costs of a production process and assigning them to the products that constitute the organization's output.

Front 20

proration

Back 20

The process of allocating underapplied or overapplied overhead toWork-In-Process Inventory, Finished Goods, and Cost of Goods Sold

Front 21

schedule of cost of goods manufactured

Back 21

a detailed schedule showing the manufacturing costs incurred during an accounting period and the change in work-in-process inventory

Front 22

schedule of cost of goods sold

Back 22

a detailed schedule showing the cost of goods sold and the change in finished-goods inventory during an accounting period

Front 23

service department cost allocation

Back 23

the SECOND STEP in assigning manufacturing-overhead costs. All costs associated with a service department are assigned to the departments that use the services it produces.

Front 24

service (or support) departments

Back 24

subunits in an organization thatare not involved directly in producing the organization's output of goods or services

Front 25

source document

Back 25

a document that is used as the basis for an accounting entry. Examples include material requisition forms and direct-labor time tickets.

Front 26

supply chain

Back 26

The flow of all goods, services, and information into and out of an organization

Front 27

throughput time

Back 27

the average amount of time required to convert raw materials into finished goods ready to be shipped to customers

Front 28

time record

Back 28

a document that records the amount of time an employeespends on each production job

Front 29

two-stage cost allocation

Back 29

a two-step procedure forassigning overhead costs to products or services produced. in the first stage, all production costs are assigned to the production departments. In the second stage, the costs that have been assigned to each production department are applied to the products or services produced in those departments

Front 30

underapplied overhead

Back 30

the amount by which the period's actula manufacturing overhead exceeds applied manufactuing overhead

Front 31

volume-based cost driver (or activity base)

Back 31

A cost driver that is closely associated with production volume, such as direct labor hours or machine hours