Product Costs

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Product costs

Back 1

The direct and indirect costs of producing goods or services.

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Process Costing*

Back 2

Allocates both direct and overhead costs to continuous-flow processing line; it is the approach generally used for mass-produced products.

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Job Costing

Back 3

The process of assigning costs to custom products or services.

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Cost Pool

Back 4

A group of individual costs that are accumulated for a particular purpose.

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Actual costing

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Overhead is allocated using the actual volume of the allocation base times the actual allocation rate.

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Normal Costing

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When the estimated allocation rate and actual quantity of the allocation base are used to allocate overheard

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Over applied Over Head

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when actuals costs are less than the total amount of overhead allocated to inventory account.

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Under applied overhead

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when actual costs are more than the amount of overhead allocated.

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Normal Capacity

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Range of production volumes that is expected to occur under ordinary circumstances.

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Normal Spoilage

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consists of defective units that arise as part of regular operations. The cost of spoiled units is charged to the job.

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Abnormal Spoilage

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out of control manufacturing processes, unusual machine breakdowns, unexpected electrical outages that result in a number of spoiled units.

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Rework

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Spoiled units repaired and sold as if produced correctly

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Scrap

Back 13

Bits of direct material left over from normal manufacturing processes.