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25 Cards in this Set
- Front
- Back
JOB COSTING
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costing system used by manufacturing customized products or customized services-accumulates, tracks, and assigns costs for each job
EX: therapy clinic, design studio, auto repairs |
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PROCESS COSTING
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costing system that accumulates and tracks costs for each process performed and then assigns those costs equally to each unit produced.
Ex: local backery, dairy, oil refinery |
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OPERATING COSTING
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hybrid of job and process costing: make products in batches... standardized, within batch
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DIRECT MATERIALS COSTS
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cost of the primary materials used in production, along with shipping costs and sales taxes
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FRINGE BENEFITS
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payroll costs in addition to the basic hourly wage
health care, retirement plans - social security and state taxes |
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IDLE TIME
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time that is not used in the production of finished product
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OVERTIME PREMIUM
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additional amount added to the basic hourly wage owing to overtime workers, 150% of normal wage
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ALLOCATION
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finding a logical method of assigning overhead costs to products or services a company produces-
when you produce on product for one price- SIMPLE but tables and chairs, based on direct numbers of hours per item |
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COST DRIVERS
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factor that drives the incurrence of costs
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COST POOLS
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groups of overhead costs that are similar, simplify tasks- assigning costs to products with ABC costing- lump
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NORMAL COSTING
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method of costing using an ESTIMATE of overhead and predetermined overhead rates instead of ACTUAL amounts - smoothes out seasons
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PREDETERMINED OVERHEAD RATES
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apply overhead to products - calculated by dividing the estimated overhead for a cost pool by the estimated units of the cost driver.
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OVERAPPLIED OVERHEAD and UNDERAPPLIED OVERHEAD
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amount of applied overhead in excess of actual overhead, - excess of applied
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EQUIVALENT UNITS
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number of finished units that can be made from the materials, labor, and overhead included in partially completed units
ex: if two products are 50% complete: then you have completed the equivalent of one |
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PRODUCTION REPORT
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report provides summary of units moving through processes during period + computation of equivalent units and cost per equivalent unit
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DIRECT METHOD
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method for allocating service department costs -directly to department
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STEP-DOWN or sequential method
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recognize- service departments consume resources of other departments- allocates those costs to other departments - then to production departments in sequential pattern
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equivalent units in production
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= completed beginning inventory
((%%%) - percent complete) + add - units started and completed + add - units in ending inventory at the end of period% |
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INFORMATION
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when data is organized processed and summarized
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UNIT LEVEL COSTS
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costs incurred each time a unit is produced
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BATCH LEVEL COSTS
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costs incurred each time a batch of goods is produced
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PRODUCT LEVEL COSTS
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costs are inccured as needed to support the production of each type of product (designing a new model)
only when new model is produced |
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FACILITY LEVEL COSTS
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cost that are incurred to sustain the overall manufacturing process, ex: rent on building
costs dont vary with product type or number |
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ACTIVITY BASED COSTING
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system for allocating overhead costs that assume that activities not volume of production, causes overhead costs to be occured.
:: overhead costs baed of activities that drive costs |
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ACTIVITIES
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procedures and processes that cause work to be accomplished
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