Acc 202 - Exam 2

Front 1

Bid price

Back 1

The price that an organization bids on a job that is open for offers. The bid price is often the estimated total job costs plus a margin.

Front 2

Conversion costs

Back 2

Costs of labor and support activities to convert the materials or product at each process stage.

Front 3

Cost driver rate

Back 3

activity expense DIVIDED by the total quantity of the activity cost driver.

Front 4

Cost pool

Back 4

each subset of total support costs that can be associated with a distinct cost driver

Front 5

Direct cost

Back 5

a cost of a resource or activity that is acquired for or used by a single cost object. An example is the cost of leather to make a leather coat.

Front 6

Equivalent units of production

Back 6

number of partially completed units
X
percentage of competition

Front 7

Finished goods inventory

Back 7

The cost of the resources for each completed job that is not yet sold

Front 8

Full absorption costing

Back 8

A costing method in which all production costs become product costs

Front 9

Indirect cost

Back 9

The cost of a resource that organizations acquire to be used by more than one cost object.

Front 10

Job bid sheet

Back 10

A medium for estimating jobs costs.

Front 11

Jobs costs sheet

Back 11

Medium for recording actual job costs.

Front 12

Job costs

Back 12

The total direct material, direct labor, and supporting costs for a job.

Front 13

Job order costing system

Back 13

A process that estimates the costs of manufacturing products for different jobs required for specific customer orders.

Front 14

Margin

Back 14

The difference between the revenue and the cost of a job.

Front 15

Markup rate

Back 15

The percent by which job costs are marked up.

Front 16

Materials requisition note

Back 16

A list of materials required to begin production.

Front 17

Multistage process costing system

Back 17

A system for determining job costs in which conversion costs are applied to products as they pass through successive process stages.

Front 18

Process costing system

Back 18

A costing system that computes the cost of each manufacturing process used to make a product.

Front 19

Rate of return

Back 19

Ratio of net income to investment.

Front 20

Raw materials inventory

Back 20

The purchase cost of materials that have not been used.

Front 21

Sequential allocation method

Back 21

Allocates service department costs to production departments and other service departments in a sequential order.

Front 22

Service department

Back 22

Departments that perform activities that support production but are not responsible for any of the conversion processes.

Front 23

Stage 1 allocation

Back 23

These involve the estimation of the normal manufacturing support costs incurred in each department.

Front 24

Stage 2 allocation

Back 24

These require the identification of appropriate cost drivers for each production department, and assign production department costs to jobs and products as they are worked on in the departments.

Front 25

Variable costing

Back 25

The costs of flexible resources.

Front 26

Weighted-average method

Back 26

A method used for computing equivalent units of production in process costing.

Front 27

Work-in-process inventory

Back 27

The costs of the resources for each job not yet completed.

Front 28

Activity-based cost systems

Back 28

System based on activities linking organizational spending on resources to the products and services produced and delivered to customers.

Front 29

Activity-based management

Back 29

The set of actions that management can take, based on the information from an activity-based cost system, to increase profitability. The actions includes making operational improvements to high-cost processes, changing product prices and product mix, and restructuring customer relationships.

Front 30

Activity-based pricing

Back 30

Establishes a base price for a proposed customer order based on the estimated cost producing and delivering the order.

Front 31

Activity cost driver

Back 31

Measures that identify the linkage between activities and cost objects; they serve as quantitative measures of the output of of activities.

Front 32

Activity cost driver rate

Back 32

The amount determined by dividing the activity expense by the total quantity of the activity cost driver. This rate is used to assign activity costs to individual products.

Front 33

Activity dictionary

Back 33

The list of the major activities performed by an organization's resources.

Front 34

Cost of unused capacity

Back 34

The cost of unused capacity-related resources.

Front 35

Practical capacity

Back 35

The maximum amount of work that can be performed by resources supplied for production or service.

Front 36

Time-driven ABC

Back 36

A new ABC variant that is simple and more powerful since it requires estimating only two parameters: the cost of supplying resource capacity and the quantity of capacity consumed by each transition, product, and customer. It enables a much simpler ABC model to capture even highly complex operations through the use of time equations.

Front 37

Time equations

Back 37

An algebraic representation that predicts the quantity of processing time based on specific order and activity characteristics.

Front 38

Whale curve

Back 38

A plot of cumulative profitability versus the number of customers, where customers are ranked from the most profitable to the least profitable.