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8 Cards in this Set
- Front
- Back
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Managerial vs Financial Accounting |
Managerial: providing information to managers for use within organization
Financial: reporting finical information to external parties |
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3 Manufacturing Cost Categories and define |
Direct Materials: Materials that become an integral part of the finished product and whose costs can be traced to the finished product
Direct Labor: Labor costs that can be easily traced to individual units of production
Manufacturing Overhead: Includes all manufacturing costs except direct material and direct labor |
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Product Cost vs Period Cost |
Product Cost: All costs involved in acquiring or making a product
Period Cost: All costs that are not product costs (All selling and administrative expenses)
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Define Cost Behavior
Cost Behavior in: -Variable Cost -Fixed Cost |
Cost Behavior: the way different types of production costs change when there is a change in level of production.
Variable Cost: change in direct proportion to the level of production. This means that total variable cost increase when more units are produced and decreases when less units are produced. Although variable in total, these costs are constant per unit
Fixed Cost: do not change with the level of activity within the relevant range. These costs will incur even if no units are produced. Fixed cost per unit decreases with increase in production |
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Indirect Cost |
A cost that cannot be easily traced to a specific cost object. Ex- Nails & Screws |
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Direct Cost |
A cost that can be easily traced to a specific cost object. Ex- Laborers Wages |
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Selling Costs |
All costs that are incurred to secure customer orders and get the finished to the customer |
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Administrative Cost |
All costs associated with the general management of an organization rather than with manufacturing or selling |
