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19 Cards in this Set
- Front
- Back
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Manufactuing Companies
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companies that purchase raw materials from other companies and transform those raw materials into a finished product
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Merchandising companies
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companies that sell products that someone else has manufactured
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Service companies
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comanies that do not sell a tangible product as their primary business
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Raw Materials Inventory
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inventory of materials needed in the production process but not yet moved to the production area
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Finished goods inventory
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inventory of finished product waiting for sale and shipment to customers
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Work in process inventory
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inventory of unfinished product (in other words, what is left in the factory at the end of the period)
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Just-in-time (JIT) production systems
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the philosophy of having raw materials arrive just in time to be used in productions and for finished goods inventory to be completed just in time to be shipped customers
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Manufacturing Costs
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costs incurred in the factory or plant to produce a product; typically consists of three elements: direct materials, direct labor, and manufacturing overhead
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Direct Materials
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Materials that can easily and conveniently to traced to the final product
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Direct Labor
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labor that can easily and conveniently be traced to practicular products
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Manufacturing overhead
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indirect material and labor and any other expenses related to the production of products but not directly traceable to specific product
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Indirect Materials
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Materials used in the production of products but not directly traceable to the specific products
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Indirect Labor
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labor used in the production of products but not directly traceable to the specific product
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Nonmanufacturing costs
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costs that include selling and administrative costs
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Product costs
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costs that attach to the period incurred; attached to the period as oppposed to the product
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Life-cycle costing
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a costing system that includes all the costs incurred throughout a product's life, not just in the manufacturing and selling of the product
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Value Chain
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the set of activities that increase the value of an organization's products services: research and development, design, production, marketing, distribution, and customer service activities
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Actual costing
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a product costing system in which actual overhead costs are entered directly into work in process
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Normal Costing
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a product costing system in which estimated or predetermined overhead rates are used to apply overhead to work in process
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