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25 Cards in this Set
- Front
- Back
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Costs included in direct labor cost |
Person who works in factory Integral part of finished product Significant portion of total cost Not supervisor, salesperson etc |
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Find # of units produced |
Sales + Desired Inv. - Beginning Inv. |
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Sarbanes-Oxley Act of 2002 |
Restore public confidence and trust in the financial reporting of companies |
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Product Costs |
Direct Labor indirect labor direct materials indirect materials factory overhead costs |
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cost behavior |
the way cost changes as production changes |
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Calculate direct labor hours needed for production |
sales volume + desired inv - beginning inv = X X (direct labor hours per unit) |
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Depreciation Def. |
Systemic allocation of fixed assets to expense |
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sunk cost |
cost that already happened not affected by future decisions |
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assets |
resources of a business |
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"prime costs" |
direct labor direct materials
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Margin of safety |
difference between current sales and the sales that break even |
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variable costs |
remain constant on a per unit level as production changes |
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production budget |
provides the information necessary to prepare the direct labor budget |
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Which budget is prepared first? |
Sales budget |
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What are internal control policies and procedures for? |
Safe guard assets accurate info compliance with laws |
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capital expenditures budget |
summarizes future plans for acquiring fixed assets
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What kind of business activity is collecting cash from? |
Operating sales
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Annual depreciation, straight line |
(cost-salvage) / #of years of life |
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Per unit costs |
Total costs / total units produced |
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disadvantages of static budgets |
does not take into account any change in production levels |
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differential revenue |
the amount of increase or decrease in revenue that is expected when you compare one alternative to another |
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What happens to a variable cost per unit as production changes? |
Nothing |
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How are mixed costs treated for analysis purposes? |
Mixed costs are separated into fixed and variable parts |
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Factory overhead cost |
Indirect labor indirect materials salaries (factory) utilities depreciating factory equiptment |
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gross profit |
net sales - cost of goods sold |
