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27 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Define Operations |
Activities that convert resources into a product ready for sale. |
Intro |
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Define Strategy |
Specifies how an entity accomplishes its objectives by matching its capabilities with opportunity. 2 Strategies: Cost Leadership and Value Leadership |
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What are two effective business strategies studied in this course? |
Cost Leadership and Value Leadership |
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what is the five step decision making process in problem management? |
1) Identify problem and risk 2) Obtain information 3) Make predictions about the future 4) Choose an alternative and implement 5) Evaluate performance and learn |
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What is the 7 step process for Job costing? |
1) Identify the job - the cost object 2) Identify direct costs of cost object 3) Select cost allocation bases to allocate indirect costs 4) Pool the indirect costs into a cost pool 5) compute cost allocation rate 6) compute assignment 7) add direct + indirect to compute total costs |
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What are the calculations used to find the direct and indirect costs using the Actual Costing method? |
direct= actual rate x actual quantity indirect= actual rate x actual quantity |
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What are the calculations used to find the direct and indirect costs using the Budgeted Costing method? |
direct= budgeted rate x actual quantity indirect= budgeted rate rate x actual quantity |
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What are the calculations used to find the direct and indirect costs using the Normal Costing method? |
direct= actual rate x actual quantity indirect= budgeted rate x actual quantity |
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What is the budgeted overhead rate? |
Budgeted OH/ Budgeted Allocation Rate |
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What is the actual overhead rate? |
Actual OH/ Actual Allocation Base |
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What are the three methods for correcting over/under applied overhead? |
Adjusted Allocation Rate, Proration, and Write off Approaches. |
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What is the adjusted allocation rate method? |
all allocations are recalculated with the exact, actual allocation rate. |
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What is the Proration Method of cost reallocation? |
the difference is allocated between the COGS, WIP, and finished goods based on their relative sizes. |
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What is the write off method of cost reallocation? |
the difference is simply written off to cost of goods sold. |
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What is cross subsidization? |
the result of spreading indirect costs evenly despite different cost drivers; when some objects are over costed and some are under costed |
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What is ABC costing? |
Activity based costing, different cost drivers for different activities, as well as different cost pools. |
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what are the four levels of the cost hierarchy? |
1) Output Unit Level Costs 2) Batch Level Costs 3) Product Sustaining Cost 4) Facility Sustaining Costs |
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What is the difference between Job Costing and Process Costing? |
Job is for a unique product or service, where process is for similar units that are mass produced |
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What are some key characteristics of Process Costing? |
used where there is a large volume of a single product being produced. each unit is indistinguishable, and flows through a continuous production process. each unit is assigned the same average cost. |
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When are direct materials applied to the cost of the project? |
DM is applied in discrete points within the production process, 100% at once. |
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When are conversion costs added to the production process? |
conversion costs are added evenly throughout the entire length of the process - includes MOH, and DL |
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What are equivalent units? |
takes the quantity of the completed units and the (% completed x # uncompleted) and adds them together to find the equivalent completed units. |
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What are the 5 steps of process costing? |
1) summarize flow of physcial units 2) compute EU 3) Summarize total costs to account for 4) Compute cost per EU 5) Assign total costs to units completed and units in end WIP |
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What are the two methods of process costing |
Weighted Average and FIFO method |
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What is the difference between Weighted Average and FIFO methods of process costing? |
FIFO uses EU from only the work done this period, whereas WA uses work done to date, including work from last period. |
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where are costs incurred in the previous period recorded in the FIFO method of process costing? |
Assigned directly to completed goods. |
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What are the 5 steps of process costing? |
1) Physical Units 2) Equivalent Units 3) Total Costs to account for 4) Cost per EU 5) Assign costs to Units completed and End WIP |
Ch 17 |
