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20 Cards in this Set
- Front
- Back
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Product Costs |
Consist of manufacturing cost of direct materials, direct labor, and factory overhead. |
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Period Costs |
Selling and Administrative costs |
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Direct Material |
Costs that are an integral part of the product are significant portion of the total costs. |
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Direct labor |
Represents the people who do the core work of the business. |
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Indirect Labor |
If a person's labor cannot be easily linked to the customer's order or the person does not directly make the product. |
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Conversion Costs |
Combination of Direct Labor costs plus manufacturing overhead costs. You can think of conversion costs as the manufacturing or production costs necessary to convert raw materials into products. |
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Overhead |
Refers to all ongoing business expenses not including or related to direct labor, direct materials or third-party expenses that are billed directly to customers.
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Predetermined Overhead Rate |
estimated manufacturing overhead cost
------------------------------------------------------------ Estimated Total Units |
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Cost Behavior |
associated with learning how costs change when there is a change in an organization's level of activity.
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Contribution margin |
Revenues Minus Variable Expenses |
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Break Even
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is the point at which total cost and total revenue are equal
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Differential Revenue
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The difference in total revenues between alternative actions or plans.
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Opportunity Cost |
the loss of potential gain from other alternatives when one alternative is chosen
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Financial Statements |
Income Statement Retained Earnings Statement Balance Sheet Statement of Cash Flow |
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Book Value |
fixed asset minus accumulated depreciation |
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Variable Costs |
Costs that vary in proportion tochanges in the activity level.
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Fixed Costs |
Costs that remain the same in totalover the relevant range of activity, but changes per unit with the level ofactivity.
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Mixed Costs
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Share characteristicsof both a variable and a fixed cost: fixed over a range, then increasing basedon activity
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High-Low Method |
Variable Cost per unit= Different in Total Cost/Difference in Production |
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Cost-Volume-Profit Analysis |
The systematic examination of therelationships among selling prices, sales and production volume, costs,expenses, and profits
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