Chapter 6: Product And Service Costing

Front 1

Cost management system

Back 1

System to provide information about the cost of process, products, and services used and produced by an organization.

Front 2

Cost Systems should have

Back 2

1) Cost Systems should have a decision focus.

2) Different cost information is used for different purposes.

3) Cost information for managerial purposes must meet the cost-benefit test.

Front 3

Predetermined overhead rate

Back 3

Estimate overhead/Estimated allocation base

Front 4

Two stage cost allocation

Back 4

Process of first allocating costs to intermediate cost pools and then to individual cost objects using different allocation bases.

Front 5

job

Back 5

unit of product that is easily distinguished from other units

Front 6

continuous flow processing

Back 6

system that mass-produces a single, homogenous output in a conituning process

Front 7

job costing

Back 7

accounting system that traces costs to individual units or to specific jobs, contracts, or batches of goods.

ie. construction, consulting, hospitals

Front 8

process costing

Back 8

accounting system used when identical units are produced through a series of uniform production steps

ie. Pertroleum, Paint

Front 9

operation costing

Back 9

Hybrid costing system often used in manufacturing goods that have some common characteristics plus some individual characteristics

ie. Clothing, Automobile, Furniture

Front 10

operation

Back 10

standarized method or technique that is repetively performed.

Front 11

overhead as a percentage of labor costs

Back 11

overhead related to direct labor/ direct labor costs

Front 12

Watch Allocation Base!!, Make sure to convert to labor hours etcetra

Back 12

If units are produced are given, multiply by labor hours used for to produce units to get total labor hours!