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32 Cards in this Set
- Front
- Back
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Cost of Goods Manufactured
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summarizes the manufacturing activity of the period. Summary of DM, and WIP accounts.
-Beginning WIP+DM+DML+MOH-EWIP=CGM |
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Direct Materials(CGM)
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Inventory 1/1
Add:Purchases Materials avbl for use Less:12/31 Direct Materials Used |
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Cost of Goods Sold
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Finished Goods 1/1
Add: CGM Cost of Goods Avbl for sale Less:Finished Goods |
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Job Order Costing
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a system for allocating costs to groups of unique products made to customer specifications.
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Process Costing
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a system for allocating cost to homogenous units of a mass produced product.
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Activity Based Costing
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a cost system that focuses on activities, determines that costs, and uses appropriate cost drivers.
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Cost Driver
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denomiator for overhead in abc costing. usually volume related.
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Cost Pools
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the numerator in determining overhead.
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non value added costs
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the cost of activities that can be eliminated without the customer perceiving a decline in product quality.
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Value added cost
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cost of activites that cannot be eliminated without the customer perceiving a decline in product quality.
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Backflush Costing
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goods are costed after they have been completed. Eliminates journal entries.
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Product Costs
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Direct materials, Direct Labor, Manufacturing Overhead.
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Period Costs
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cannot be associated with manufactured goods. Ex: Advertising Expense.
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Prime Costs
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Direct Materials and Direct Labor
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Indirect Materials
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not easily traceable to the product. Ex:Glue
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Conversion Costs
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Direct Labor, and Manufacturing Overhead.
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Joint Costing
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a system of assigning joint costs to joint products.
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Mixed Costs
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have a fixed component, and a variable component.
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Relevant Range
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is the operating range of activity in which cost behavior patterns are valid.
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Service Department Cost Allocation Methods.
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1)Direct Method
2)Step Method 3)Reciprocal Method |
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Direct Method
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assigns costs based on proportions. Dept's X-80%, Dept Y-20%. Total Cost woudl be allocated based on percentages.
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Step Method
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service departments serve other service departments.
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Defective Units
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inferior goods reworked and sold as normal product.
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Abnormal Spoilage
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Is a period cost.
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Spoilage in Job Costing
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costs of abnormal spoilage should not be charged to jobs but written off as a loss of the period.
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By Products-
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can be sold and disclosed. Value can be recognized at any point.
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Cost Function
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a mathematical expression of how a cost changes with changes in the level of activity.
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4 approaches to cost estimation
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1)Industrial Engineering
2)Conference Method 3)Account Analysis Method 4)Quantative Methods |
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Industrial Engineering Method
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estimates of cost functions are derived from analyzing the physical relationships between inputs.
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Conference Method
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estimates are made by individuals from various departments.
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Account Analysis Method
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derived by analyzing ledger accounts and designating them as fixed, variable costs.
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Quantative Methods
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derived from mathematical models
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