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25 Cards in this Set

  • Front
  • Back
JOB COSTING
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
PROCESS COSTING
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
OPERATING COSTING
hybrid of job and process costing: make products in batches... standardized, within batch
DIRECT MATERIALS COSTS
cost of the primary materials used in production, along with shipping costs and sales taxes
FRINGE BENEFITS
payroll costs in addition to the basic hourly wage
health care, retirement plans - social security and state taxes
IDLE TIME
time that is not used in the production of finished product
OVERTIME PREMIUM
additional amount added to the basic hourly wage owing to overtime workers, 150% of normal wage
ALLOCATION
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
COST DRIVERS
factor that drives the incurrence of costs
COST POOLS
groups of overhead costs that are similar, simplify tasks- assigning costs to products with ABC costing- lump
NORMAL COSTING
method of costing using an ESTIMATE of overhead and predetermined overhead rates instead of ACTUAL amounts - smoothes out seasons
PREDETERMINED OVERHEAD RATES
apply overhead to products - calculated by dividing the estimated overhead for a cost pool by the estimated units of the cost driver.
OVERAPPLIED OVERHEAD and UNDERAPPLIED OVERHEAD
amount of applied overhead in excess of actual overhead, - excess of applied
EQUIVALENT UNITS
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
PRODUCTION REPORT
report provides summary of units moving through processes during period + computation of equivalent units and cost per equivalent unit
DIRECT METHOD
method for allocating service department costs -directly to department
STEP-DOWN or sequential method
recognize- service departments consume resources of other departments- allocates those costs to other departments - then to production departments in sequential pattern
equivalent units in production
= completed beginning inventory
((%%%) - percent complete)
+ add - units started and completed
+ add - units in ending inventory at the end of period%
INFORMATION
when data is organized processed and summarized
UNIT LEVEL COSTS
costs incurred each time a unit is produced
BATCH LEVEL COSTS
costs incurred each time a batch of goods is produced
PRODUCT LEVEL COSTS
costs are inccured as needed to support the production of each type of product (designing a new model)
only when new model is produced
FACILITY LEVEL COSTS
cost that are incurred to sustain the overall manufacturing process, ex: rent on building
costs dont vary with product type or number
ACTIVITY BASED COSTING
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
ACTIVITIES
procedures and processes that cause work to be accomplished