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48 Cards in this Set
- Front
- Back
- 3rd side (hint)
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ACTIVITY BASE |
A measure of whatever causes the incurrence of a variable cost. Pg 33 |
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CONTRIBUTION APPROACH |
An Income statement format that organizes costs by their behavior.Pg 45 |
separated into variable and fixed instead of product and period.
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CONTRIBUTION MARGIN |
The amount remaining from sales revenues after all variable expenses have been deducted.Pg 45 |
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CONVERSION COST |
The way in which a cost reacts to changes in the level of activity. Pg 33 |
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COST OBJECT |
Anything for which cost data are desired. Pg 28 |
Example of cost objects are products, customers, jobs, and parts of the organization such as departments or divisions. |
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COST STRUCTURE |
The relative proportion of fixed, variable and mixed costs in an organization. Pg 33 |
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DIRECT COST |
A cost that can be easily and conveniently traced to a specified cost object. Pg 28 |
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DIRECT LABOR |
Factory labor costs that can be easily traced to individual units of product. Also called touch labor. Pg 29 |
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DIRECT MATERIALES |
Materials that become an integral part of a finished product and whose costs can be conveniently trace to it. Pg 29 |
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FIXED COST |
A cost that remains constant, in total, regardless of changes in the level of activity within the relevant range. Pg 34 |
If a fixed cost is expressed on a per net basis, it varies inversely with the level of activity. |
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HIGH-LOW METHOD |
A method of separating a mixed cost into its fixed and variable elements by analyzing the change in cost between the high and low activity levels. Pg 40 |
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INDIRECT COST |
A cost that cannot be easily and conveniently traced to a specified cost object. Pg 29 |
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INDIRECT LABOR |
The labor costs of janitors, supervisors, material handlers, and other factory workers that CANNOT be conveniently traced to particular products. Pg 29 |
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INDIRECT MATERIALS |
Small items of material such as glue and nails that may be an integral part of a finished product, BUT whose costs CANNOT be easily or conveniently traced to it. Pg 29 |
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INVENTORIABLE COST |
Synonym for product costs. Pg 31 |
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MANUFACTURING OVERHEAD MOH |
All manufacturing costs except direct materials and direct labor. Pg 30 |
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MIXED COSTS |
A cost that contains both variable and fixed cost elements. Pg 37 |
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OPPORTUNITY COSTS |
The potential benefit that is given up when one alternative is selected over another. Pg 46 |
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PERIOD COSTS |
Costs that are taken directly to the income statement as expenses in the period in which they are incurred or accrued. Pg 31 |
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PRODUCT COSTS |
All costs that are involved in acquiring or making a product. Pg 31 |
Product cost=direct materials+direct labor+manufacturing overhead |
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RAW MATERIALS |
Any materials that go int the final product. Pg 29 |
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RELEVANT RANGE |
The range of activity within which assumptions about variable and fixed cost behavior are valid. Pg 36 |
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SUNK COSTS |
A cost that has already been incurred and that cannot be changed by any decision now or in the future. Pg 46 |
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VARIABLE COSTS |
A cost that varies, in total, in direct proportion to changes in the level of activity. A variable cost is constant per unit. Pg 33 |
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ABSORPTION COSTING |
A costing method that includes all manufacturing costs--direct materials, direct labor, and both variable and fixed manufacturing overhead--in the cost of a product. Pg 84 |
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ALLOCATION BASE |
A measure of activity such as direct labor-hours (DLH'S) or machine-hour (MACHH'S) that is used to assign costs to cost objects. Pg 89 |
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COST DRIVER |
A factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes overhead costs. Pg 91 |
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COST OF GOODS MANUFACTURED |
The manufacturing costs associated with the goods that were finished during the period. Pg 93 |
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FINISHED GOODS |
Units of product that have been completed but not yet sold to customers. Pg 93 |
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JOB ORDER COSTING |
A costing system used in situations where many different products, jobs or services are produced each period. Pg 84 |
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OVERAPPLIED OVERHEAD |
A credit balance in the manufacturing overhead account that occurs when the amount of overhead cost applied to work in process exceeds the amount of overhead cost actually incurred during a period. Pg 107 |
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PREDETERMINED OVERHEAD RATE |
A rate used to charge manufacturing overhead cost to jobs that is established in advance for each period. |
It is computed by estimated ttl MOHC for the period ----------divided by---------------estimated ttl amt allocation base for the period = PREDET-MOH RATE |
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SCHEDULE OF COG'S MANUFACTURED |
A schedule that contains 3 elements of product costs--DM, DL, & MOH--and that summarizes the portions of those costs that remain in ending Work In Process inventory and that are transferred out of Work In Process into Finished Goods. Pg 102 |
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UNDERAPPLIED OVERHEAD |
A debit balance in the manufacturing overhead account that occurs when the amount of overhead cost actually incurred exceeds the amount of overhead cost applied to Work In Process during a period. Pg 104 |
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WORK IN PROCESS |
Units of product that are only partially complete and will require further work before they are ready for sale to the customer. Pg 93 |
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Y=A+B(X) |
Y=TOTAL MIXED COST A=TOTAL FIXED COST B=VARIABLE COST PER UNIT X=LEVEL OF ACTIVITY |
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TOTAL VARIABLE COST divided by TOTAL UNITS = VARIABLE COST PER UNIT |
X |
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VARIABLE COST + FIXED COST = TOTAL COST |
X |
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COGD'S MFG SCHEDULE DIRECT MATERIAL DIRECT LABOR APPLIED MOH +_________________________ =TOTAL MANUFACTURING COST |
X |
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Est TTL MOH/Est Activity level Pred. MOH Rate= |
X |
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Pred. MOH Rate*Actual allocation base = Applied MOH |
X |
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under or over applied MOH is closed to COGS |
X |
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Hi-Low Method HIGH COST-LOW COST ---------------------------------------- = B HIGH ACTIVITY-LOW ACTIVITY VARIABLE COST PER/UNIT = B |
X |
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Beg Inv+DM+DL+Applied MOH-COG'SMFD=End of WIP |
X |
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Adjusted Cost of Goods Sold Beg Finished Goods +COGM - COGS ---------------- End of Finished Goods |
X |
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Total variable cost divided by activity level = variable cost per unit |
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Total fixed cost is the same no matter the units |
Fixed cost is constant |
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The Total cost = |
Variable cost + fixed cost |
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