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16 Cards in this Set
- Front
- Back
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Who is the "controller"?
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Chief Management Accountant
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What are the 3 components of product cost?
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1. Direct Materials
2. Direct Labor 3. Factory Overhead |
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What 2 components of product costs combine to make "conversion costs"?
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1. Direct Labor
2. Factory Overhead |
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What is the difference between product costs and period costs?
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Product costs are manufacturing costs and will go into the inventory accounts
Period Costs are selling and administrative costs that will be expensed in the period in which they are incurred |
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What does Deere and company call "Factory Overhead"?
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Factory burden
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What is the difference between financial accounting and managerial accounting?
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Financial accounting prepares financial statements that go outside the company and according to GAAP.
Managerial accounting prepares reports that are destined for internal company management and not prepared according to GAAP |
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What is the difference between "line" and "staff" positions?
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Line positions are directly involved with the basic objectives of the organization.
Staff positions assist line personnel in performing their jobs. |
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The "Cost of Goods Sold" section will include what instead of "Purchases" (as used by retail companies)?
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"Cost of Goods Manufactured"
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What is the "Cost of Goods Manufactured"?
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The total cost of the product completed this period
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What types of companies would use a Job Order costing system
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Companies that can accumulate costs by separate, distinguishable jobs
e.g., Construction companies |
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What is the flow of costs through a Job Order cost accounting system?
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1. Materials
2. Work in Process 3. Finished Goods 4. Cost of Goods Sold |
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How are predetermined factory overhead rates used?
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An estimation of total factory overhead for the upcoming year is made and then allocated using a base rate such as direct labor hours or direct machine hours
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Why are predetermined factory overhead rates used?
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The manufacturing company must know the rate to determine what to bill the customer as the job is completed
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What is the purpose of the receiving report in a Job Order cost system?
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Provides the basis for the entry recording the receipt of materials.
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What is the purpose of "material requisitions" in a Job Order cost system.
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Authorizes the release of materials into the production process.
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What is an activity base in regard to determining FOH rates?
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The amount by which the total estimated FOH will be divided.
e.g., direct labor hours or direct machine hours |
